================================================================================
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A
                                Amendment No. 1

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934
          For the fiscal year ended June 27, 2003 or
[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE SECURITIES
     EXCHANGE  ACT  OF  1934
          For the transition period from ____ to _____

                         Commission file number 0-24210

                          AMERICAN HOMESTAR CORPORATION
             (Exact name of registrant as specified in its charter)

                    TEXAS                             76-0070846
      (State or other jurisdiction of               (IRS Employer
       incorporation or organization)           Identification Number)

        2450 SOUTH SHORE BOULEVARD, SUITE 300, LEAGUE CITY, TEXAS 77573
          (Address of principal executive offices, including zip code)

                                 (281) 334-9700
              (Registrant's telephone number, including area code)

        Securities Registered Pursuant to Section 12(b) of the Act: None

                Securities Registered Pursuant to Section 12(g):

                Series C Common Stock, par value $.01 per share
                Series M Common Stock, par value $.01 per share
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.   Yes  [X]   No  [ ]

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K  [ ].

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Exchange  Act  Rule  12b-2).
Yes  [ ]   No  [X]

The estimated aggregate market value of voting and non-voting common equity held
by  non-affiliates  of  the registrant is not readily determinable as there have
been  no sales and no quoted bid and asked prices as of the last business day of
the  registrant's most recently completed second fiscal quarter.

Indicate  by  check  mark  whether  the  registrant  has filed all documents and
reports  required  to  be  filed  by  Section  12, 13 or 15(d) of the Securities
Exchange  Act  of 1934 subsequent to the distribution of securities under a plan
confirmed  by  a  court.  Yes  [X]  No  [ ]

As of September 23, 2003 the registrant had 100 shares of Series M Common Stock,
par  value  $.01  per  share, and 6,780,364 shares of Series C Common Stock, par
value  $.01  per share, issued and outstanding, and 3,219,636 shares of Series C
Common  Stock  deemed issued, outstanding and held in constructive trust for the
benefit  of  shareholders  to  be  determined  in  name and amount as the claims
process  arising  from  the  registrant's  Third  Amended  and  Restated Plan of
Reorganization  is  completed.

================================================================================

                                EXPLANATORY NOTE

This Amendment No. 1 to the Registrant's Annual Report on Form 10-K for the year
ending  June  27,  2003  is  being  filed  solely  to correct the certifications
required  by  pursuant to Rule 13a-14(a) set forth on Exhibits 31.1 and 31.2. No
revisions  have  been made to the Registrant's financial statements or any other
disclosure contained in such Annual Report.



<PAGE>
                                TABLE OF CONTENTS


                                     PART I

                                                                            PAGE
                                                                            ----
Item 1.    Business . . . . . . . . . . . . . . . . . . . . . . . . . . .     2

Item 2.    Properties . . . . . . . . . . . . . . . . . . . . . . . . . .    14

Item 3.    Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .    14

Item 4.    Submission of Matters to a Vote of Security Holders. . . . . .    14


                                     PART II

Item 5.    Market for Registrant's Common Equity and Related
           Shareholder Matters. . . . . . . . . . . . . . . . . . . . . .    15

Item 6.    Selected Financial Data. . . . . . . . . . . . . . . . . . . .    16

Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations. . . . . . . . . . . . . . . . . . .    17

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk . .    33

Item 8.    Financial Statements and Supplementary Data. . . . . . . . . .    33

Item 9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure . . . . . . . . . . . . . . . . . . . . .    34

Item 9A    Controls and Procedures. . . . . . . . . . . . . . . . . . . .    34

                                    PART III

Item 10.    Directors and Executive Officers of the Registrant. . . . . .    35

Item 11.    Executive Compensation. . . . . . . . . . . . . . . . . . . .    37

Item 12.    Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters. . . . . . . . . .    42

Item 13.    Certain Relationships and Related Transactions. . . . . . . .    43


                                     PART IV

Item 14.    Exhibits, Financial Statement Schedules, and Reports on
            Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . .    44


<PAGE>
                                     PART I

     Unless  otherwise  indicated,  "we," "us," "our," "American Homestar," "the
Company," "Management" and similar terms refer to American Homestar Corporation,
its  subsidiaries  and  affiliates.  Throughout  this  report,  we  use the term
"fiscal,"  as  it  applies to a year, to represent the fiscal year ending on the
Friday  closest  to  June  30  of  that  year.

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This  Annual  Report  on  Form  10-K,  including  items discussed in "Risks
Relating to Our Business" in Item 1 and "Management's Discussion and Analysis of
Financial  Condition  and  Results of Operations" in Item 7, contains statements
that  relate to future plans, events, financial results or performance and which
are  defined  as  forward-looking  statements  as  defined  under  the  Private
Securities  Litigation  Reform  Act  of  1995. These statements are based on the
beliefs  of  the Company's management, as well as assumptions made by management
and  currently  available  information, that, if they never materialize or prove
incorrect,  could cause our results to differ materially from those expressed or
implied  by  such  forward-looking  statements.  In some cases, you can identify
forward-looking  statements  by  terminology  such  as  "may," "will," "should,"
"expects,"  intends,"  "plans,"  "anticipates,"  "believes,"  "estimates,"
"predicts,"  "potential"  or "continue," or the negative of these terms or other
comparable  terminology. All statements other than statements of historical fact
are  statements  that  could be deemed forward-looking statements, including any
projections  of earnings, revenue, synergies, accretion, margins, costs or other
financial  items;  any  statements  of  the  plans, strategies and objectives of
management  for  future  operations,  including the execution of integration and
restructuring  plans;  any statement concerning proposed new products, services,
developments  or  industry  rankings;  any  statements regarding future economic
conditions  or  performance;  any  statements  of  belief; and any statements of
assumptions  underlying  any  of the foregoing. These forward-looking statements
are only predictions, and may be inaccurate. Actual events or results may differ
materially.  In  evaluating  these  statements, you should specifically consider
various  risk  factors  included in this paragraph, as well as elsewhere in this
report and in other SEC filings. These risk factors include, without limitation,
ongoing  weakness  in  the  manufactured housing market, continued acceptance of
American Homestar's products, the availability of wholesale and retail financing
in  the  future  and  changes  in  retail  inventory  levels in the manufactured
housing.  Although  management  believes  that the expectations reflected in the
forward-looking  statements  are reasonable, we cannot guarantee future results,
levels  of  activity, performance or achievements, and actual results, events or
performance  may differ materially. You should not place undue reliance on these
forward-looking  statements,  which  speak  only  as of the date of this report.
American  Homestar  undertakes  no obligation to publicly release the results of
any  revisions  to these forward-looking statements that may arise from changing
circumstances  or  unanticipated  events.

ITEM 1.  BUSINESS

GENERAL

     American  Homestar  Corporation  is  a  regional  vertically  integrated
manufactured  housing  company,  with  operations  in  manufacturing, retailing,
transportation,  financing  and insurance. We were incorporated in Texas in July
1983. Currently, we operate two new home manufacturing facilities and sell homes
through  dedicated  distribution channels, which include 31 retail sales centers
and three sales offices in manufactured housing communities. In approximately 34
additional  manufactured housing communities we display homes that are ready for
sale  and  occupancy  ("spec homes") and model homes, although we do not have an
on-site  office.  We  also distribute homes through approximately 37 independent
retailers  and developers located in five states. A third manufacturing facility
is  currently  used  to  refurbish  lender  repossessions.

     Starting  in July 1994, we adopted a strategy of expanding into several new
regional markets (outside of our core Southwest base of operations) by acquiring
manufacturing  capacity  and growing our Company-operated store network (through
acquisition  and  new formation) to support our expanded regional presence. Many
of  our  competitors  were growing and expanding their own company store base in
the  same  regional  markets.  By  early  1999,  overall demand for manufactured
housing  had peaked after several years of consistent and significant growth. At
the  same  time, total manufacturing and retail capacity had grown to the extent
that  it  surpassed  then  current  levels


                                        2
<PAGE>
of  end-user  demand.  The  result  was lower per-plant and per-store volume and
diminishing  profitability  for  the  industry  and the Company. Excess finished
goods  inventory  and  excess  manufacturing  capacity  gave  rise  to  steadily
increasing  volume  and  margin  pressures.  With  mounting losses in our retail
operations  and  diminishing  profitability  in our manufacturing operations, we
adopted  a  plan  to  retract  our  operations,  with  the goal of discontinuing
operations in all non-core markets and focusing management and resources on what
we  defined  as  our  core  Southwest  market  (Texas  and  surrounding states).

REORGANIZATION

     On  January  11, 2001, American Homestar Corporation and twenty-one (21) of
its  subsidiaries  filed  separate  voluntary petitions for reorganization under
Chapter  11 of the United States Bankruptcy Code in the United States Bankruptcy
Court  of the Southern District of Texas (the "Bankruptcy Court"). On August 14,
2001,  the  Bankruptcy  Court  confirmed  the  Third  Amended  Joint  Plan  of
Reorganization  of the Company and its subsidiaries (the "Plan"). All conditions
to  the  effectiveness  of  the  Plan  were met and the Plan became effective on
October  3,  2001  (the  "Effective  Date").

     Under  the  terms  of  the  Plan,  all equity interests in the Company were
cancelled  as  of  the  Effective Date, and all holders of outstanding shares of
Company  stock,  which  had  previously traded under the symbols HSTR and HSTRQ,
lost  all  rights  to equity interests in and to the reorganized Company.  Under
the  Plan,  we  have the authority to issue 15 million shares of Series C common
stock  and  are  required to issue 10 million shares of Series C common stock to
our general unsecured creditors.  Pursuant to the exemption set forth in Section
1145  of  the  Bankruptcy  Code,  we  issued  shares of Series C common stock to
persons  holding  allowed  unsecured claims in the Company's bankruptcy case and
shares  of Series M common stock to management under an incentive program. As of
June  27,  2003,  we  had  issued 10 million shares of Series C common stock, of
which  4,869,250 shares were issued to specific shareholders with allowed claims
under  the  Plan,  and  5,130,750 shares were held in constructive trust for the
benefit  of  shareholders  to  be  determined  in  name and amount as the claims
process  is  completed.  We  expect  the claims process to be completed by April
2004.  We also have the authority to issue 7.5 million shares of Series M common
stock  to  management,  100 shares of which had been issued as of June 27, 2003,
and  4,999,900  shares  underlie  options  authorized  under  the Company's 2001
Management  Incentive Program. As of June 27, 2003, options for 4,899,900 shares
had  been  approved  and  granted at an exercise price of $1.35 per share. These
options  vest seven years from the date of grant and may vest earlier (up to 20%
per  year)  if  certain annual performance criteria, established by the Board of
Directors,  are  met.

     In  connection  with  its  reorganization, the Company adopted "Fresh-Start
Reporting"  under  American  Institute of Certified Public Accountants ("AICPA")
Statement  of  Position 90-7, "Financial Reporting by Entities in Reorganization
under  the  Bankruptcy Code," beginning September 29, 2001, which coincided with
the  end  of  the Company's first quarter of our 2002 fiscal year. We elected to
use  September  29,  2001,  our  quarter  end, as our Fresh-Start Reporting date
versus  the Effective Date of the Plan, October 3, 2001, as interim activity was
not  material  to  the  Consolidated Fresh-Start Balance Sheet. Accordingly, all
assets  and  liabilities  of  the  Company  were  restated  to  reflect  their
reorganization  value,  which  approximates  the  fair  value  of the assets and
liabilities  at  the  Effective  Date,  and  our capital structure was recast in
conformity  with  the  Plan. The adjustment to eliminate the accumulated deficit
totaled  $158  million,  of  which  $139 million was forgiveness of debt and $19
million  was  from  Fresh-Start  adjustments  and  is reported in the results of
operations  for  the  three  months  ended  September  29,  2001.

     The  results  of  operations  and  cash  flows  for  the three months ended
September  29,  2001  include  operations prior to our emergence from Chapter 11
proceedings,  which  do  not  take  into  account  the  effects  of  Fresh-Start
Reporting,  and  the  results  of  operations and cash flows for the nine months
ended  June 28, 2002 include operations subsequent to our emergence from Chapter
11  proceedings  and  reflect  the  on-going  effects  of  Fresh-Start Reporting
(American Homestar being referred to herein as "Predecessor Company" for periods
prior  to  September 29, 2001, and as "Successor Company" for periods subsequent
to  September  29,  2001). As a result, the results of operations and cash flows
for  the  twelve  months  ended  June 27, 2003 for the Successor Company are not
comparable  to  the  results  of operations and cash flows for the twelve months
ended  June 28, 2002, as the earlier period includes three months of Predecessor
Company  operations  and  cash  flows,  which  do  not  reflect  the  effects of
Fresh-Start  Reporting, and nine months of Successor Company operations and cash
flows,  which  do  reflect  the  effects  of  Fresh-Start  Reporting.


                                        3
<PAGE>
     During  our reorganization, we did not prepare or file annual and quarterly
reports  with  the  Securities and Exchange Commission but instead filed Monthly
Operating Reports with the Bankruptcy Court, as required by the Bankruptcy Code.
We  also  filed  our  Monthly  Operating Reports and our confirmed Plan with the
Securities  and  Exchange  Commission. The reorganized Company has substantially
fewer  assets,  liabilities  and  operations  than  prior to our reorganization.
Additionally,  the  reorganized  Company has entirely new ownership, as the Plan
cancelled  all  classes  of equity securities issued by the Company prior to its
reorganization.

STRATEGY

     We  adopted  a vertical integration strategy in 1991 and used that business
model  as  we  grew  in  the  1990's.  In connection with our reorganization, we
significantly  downsized our operations and focused on our core Southwest market
where we are based and where we have historically had our most favorable overall
results. We currently operate 31 retail sales centers and three sales offices in
manufactured  housing  communities  along  with a marketing presence (displaying
model  homes and spec homes without an on-site sales office) in approximately 34
manufactured  housing  communities.  We also operate three manufacturing plants,
two  of  which produce new homes and the third refurbishes lender repossessions.
Additionally, we operate an insurance agency, which sells homeowner's insurance,
credit  life insurance and extended warranty coverage to our customers.  We also
have  a  51%  ownership  interest in a transport company that specializes in the
transportation  of  manufactured  and modular homes and offices. In addition, we
have a 50% interest in a finance company, which specializes in providing chattel
and  land/home  financing  to  our  customers. In May 2002, we formed a mortgage
brokerage venture, of which we own a 50% interest, to allow us to better control
the  placement  of our traditional mortgage business and to realize a portion of
the  net  profits  relating  to  that  business. Subsequent to June 27, 2003, we
ceased  operations  in  this  mortgage  brokerage  venture  and  have focused on
relationships  with  a  broader base of mortgage lenders. Most recently, we have
aligned  with  several subdivision developers to meet an emerging market segment
in  our core market region and to gain greater market share. Management believes
that  our  regional vertical integration strategy, which derives multiple profit
sources  from  each  retail  sale  and  provides  better  control  over critical
functions,  will  allow the Company to be more successful, over time, than would
otherwise  be  the  case.

INDUSTRY

     A  manufactured  home  is  a  detached  single-family  residence  that  is
constructed  in a controlled factory environment and transported to a home site.
Total  retail  sales  of  new  manufactured  homes  in  the  United  States were
approximately  $8.6  billion  in 2002.  From 1991 through 1998, the manufactured
housing industry experienced a significant increase in the number of homes sold.
Factory  shipments  increased  from  approximately  171,000  homes  in 1991 to a
cyclical  high  of  approximately 373,000 homes in 1998. In 1999, 2000, 2001 and
2002  factory  shipments declined to approximately 349,000, 251,000, 193,000 and
168,000  respectively.  In  2002, manufactured homes accounted for approximately
15%  of  all new single-family homes completed in the United States, compared to
approximately  23%  in  1998  and  17%  in  1991.  Because  of the lower cost of
construction  for  manufactured homes compared to site-built homes, manufactured
housing  has  historically served as one of the most affordable alternatives for
the  homebuyer.  The average retail price of a new manufactured home in 2002 was
$32.16  per  square  foot,  as  compared  to  $75.26  per  square foot for a new
site-built  home,  excluding  land  costs.  In  recent years, demand has shifted
toward larger, multi-section homes, which accounted for approximately 78% of the
manufactured  homes  produced  in  2002.

     Manufactured  homes  have  traditionally been an alternative for homebuyers
unable  or  unwilling  to  make larger down payments and higher monthly payments
associated  with  site-built  homes.  Changes  in the sub-prime lending markets,
beginning in late 1998, led to interest rate increases for home-only ("chattel")
financing  at  a  time  when traditional site-built mortgage interest rates were
generally  declining.  This  condition  (rising  chattel  financing  rates  and
declining  site-built  mortgage  rates)  has  negatively  affected  the relative
affordability  of  chattel-financed  manufactured  housing in the Company's core
market area where the costs of land and site-built construction are low compared
to  other  parts of the country.  There has also been a decline in the number of
industry  lenders who provide chattel financing for manufactured homes resulting
in higher credit standards being applied to prospective buyers and, therefore, a
decline  in the number of prospective customers who qualify for new manufactured
home  chattel  financing.


                                        4
<PAGE>
     In  addition  to  the  changes in the chattel-lending environment described
above,  recent  Texas  legislation  (the  77th  Legislature's HB 1869, effective
January 1, 2002) required any land/home package to be closed and financed in the
same  manner  as  a traditional mortgage financing for site-constructed housing.
Chattel  financing could be used only in cases where the home is sited on leased
land.  Chattel  financing  is  simpler for customers to understand and faster to
process  than  traditional  mortgage  financing. Effective June 18, 2003, SB 521
amended the provisions of HB 1869 to allow, at the owner's election, for chattel
financing  of a manufactured home that is sited on land owned by the home owner.
We believe SB 521 should moderate the negative impact on manufactured home sales
in  Texas  by  allowing  homeowners  to  use chattel financing if they wish. The
recent  availability  of  traditional  mortgage  financing  (at  generally lower
interest  rates)  to  qualified  customers is also an important factor in future
sales  levels  of  manufactured  homes.

DISTRIBUTION  CHANNELS

     We  currently sell our products through various distribution channels. Most
of our homes are sold through company-operated retail sales centers, and through
on-site  subdivision  sales  teams.  We also sell homes to independent retailers
and,  most  recently,  to community developers. Retail franchise operations were
discontinued as a part of the Company's reorganization. The following table sets
forth,  for  the  periods  indicated,  certain  data  for (i) shipments of homes
manufactured  by  the  Company  to  Company-operated  retail  sales  centers and
subdivisions  and  (ii)  shipments  of  homes  manufactured  by  the  Company to
independent retail sales centers and developers, and (iii) the current number of
Company-operated  retail  sales  centers:

<TABLE>
<CAPTION>
                                                 YEAR    THREE MONTHS   NINE MONTHS    YEAR
                                                ENDED        ENDED         ENDED      ENDED
                                               JUNE 29,  SEPTEMBER 29,   JUNE 28,    JUNE 27,
                                                 2001        2001          2002        2003
                                               --------  -------------  -----------  --------
                                                    PREDECESSOR CO.         SUCCESSOR CO.
                                               -----------------------  ---------------------
<S>                                            <C>       <C>            <C>          <C>
Manufacturing shipments to Company-operated
  retail sales centers and subdivisions . . .     1,824            292        1,014       918
Manufacturing shipments to independent retail
  sales centers and community developers. . .     1,832             51          162       330
                                               --------  -------------  -----------  --------
  Total homes shipped . . . . . . . . . . . .     3,656            343        1,176     1,248
                                               ========  =============  ===========  ========

Company-operated retail sales centers and
  community sales offices at end of period. .        41             41           41        34
</TABLE>


     We  have sales offices in three manufactured housing communities and have a
marketing  presence  (displaying  model  homes and spec homes without an on-site
sales  office)  in  approximately  34  manufactured  housing  communities.  Each
Company-operated  retail  sales  center  carries  a  broad  selection  of  fully
furnished  and  professionally  decorated  model homes displayed in a landscaped
setting. Our professional sales staff receives continuous training on all of our
products and services and is therefore able to provide customers with a positive
buying experience. We also provide merchandising support and use regional print,
radio  and  occasional  television advertising to promote customer awareness and
enhance  the  Company's  quality  image.

     In  fiscal 2003, 79% of our new home retail sales were multi-section homes,
and our average new home retail sales price was $55,230 compared to the industry
average  of $51,300.  We currently operate 31 retail centers, of which 28 are in
Texas,  one  is in Louisiana and two are in Oklahoma. In addition, we have sales
offices  in three manufactured housing communities and have a marketing presence
(displaying  model  homes  and  spec  homes  without an on-site sales office) in
approximately  34  manufactured  housing  communities.


                                        5
<PAGE>
     The  following  table  sets  forth,  for  the  periods  indicated,  certain
information relating to homes sold by Company-operated retail sales centers:

<TABLE>
<CAPTION>
                                                  YEAR       THREE MONTHS     NINE MONTHS      YEAR
                                                 ENDED          ENDED            ENDED        ENDED
                                                JUNE 29,    ,SEPTEMBER 29,      JUNE 28      JUNE 27,
                                                  2001           2001            2002          2003
                                               ----------  ----------------  -------------  ----------
                                                      PREDECESSOR CO.             SUCCESSOR CO.
                                               ----------------------------  -------------------------
<S>                                            <C>         <C>               <C>            <C>
Average new home sales price. . . . . . . . .  $  54,832   $        51,403   $     53,584   $  55,230
Homes sold:
    New homes . . . . . . . . . . . . . . . .      2,499               373          1,001       1,010
    Previously-owned homes. . . . . . . . . .        964               149            555         564
Percentage of new homes sold:
    Single-section. . . . . . . . . . . . . .         29%               34%            28%         21%
    Multi-section . . . . . . . . . . . . . .         71%               66%            72%         79%
Percentage of new homes sold manufactured by:
    Company . . . . . . . . . . . . . . . . .         98%              100%            99%         99%
    Independent manufacturers . . . . . . . .          2%                0%             1%          1%
</TABLE>

     Independent  Retailers. Independent retailers typically operate one or more
retail sales centers similar to those we may operate. They carry several display
models as well as some homes in inventory. We currently sell to approximately 37
independent retailers and developers located in Colorado, Louisiana, New Mexico,
Oklahoma and Texas. We believe our relations with existing independent retailers
are  good.  We have no written agreements with our independent retailers, except
for  volume  purchase  discounts  agreements, and either party may terminate the
relationship  at  any  time.  We  generally  do  not provide inventory financing
arrangements  for  independent  retailer  purchases,  nor  do  we consign homes.
Consistent  with  customary  business  practice  in  the  manufactured  housing
industry,  we  have  entered  into  repurchase agreements with various financial
institutions  and other credit sources under which we have agreed, under certain
circumstances,  to  repurchase manufactured homes sold to independent dealers in
the  event  of  a default by such independent dealer on their obligation to such
credit  sources.  Under  the  terms  of  such repurchase agreements, we agree to
repurchase  manufactured  homes  at  declining  prices  over  the periods of the
agreements  (which  generally  range  from  18  to 24 months).  While repurchase
activity  is  very  sporadic  and cyclical, the Company provides for anticipated
repurchase  losses.  At  June  27,  2003,  the Company was at risk to repurchase
approximately  $1.2 million of manufactured homes and has provided for estimated
net  repurchase  losses  of  approximately  $0.2  million.

     Developers.  We  have  recently  expanded  our  distribution  base  through
relationships  with  several builder-developers that are developing manufactured
housing  rental  and  owner  communities  in  our market areas. In most of these
instances,  we have written agreements with the developer that define the number
of  homes  we  will  supply,  the specifications and prices of the homes and the
nature  of our relationship. In some cases we provide up to five model homes and
assist,  to  varying  degrees,  in  the  marketing  and  sale  of  the homes and
homesites.  We  believe  this  will  be a growing segment of our business in the
future  and  believe  that  our  early, successful track record may provide us a
competitive  advantage  over  others  in  our  industry.

     In  March,  2003,  the  Company invested $50 for a 49.5% interest in Humble
Springs LTD, a land development joint venture. The other partners in the venture
are  a  land development company and certain of its affiliates, none of whom are
affiliated  with  the  Company.  This  venture  will  develop a new manufactured
housing  subdivision  for  homes to be rented and sold. We will be the exclusive
supplier  of  homes to the project and will share in the development profits. We
currently  plan  to  enter  into  several  other similar ventures with this same
developer  in  the  future.


                                        6
<PAGE>
MANUFACTURING

     We  manufacture  a  broad  selection  of  HUD-code  homes  ranging  from
traditional,  lower-priced  homes  to  distinctive, higher-priced homes. We have
also  started  to  produce  modular  (Industrialized  Housing  and  Building  or
IHB-code)  homes  in  our  core market area.  HUD-code homes conform to national
construction  standards  promulgated and regulated by HUD. Modular homes conform
to  a  different  construction standard (IHB-code) and are generally less zoning
restricted  than  HUD-code homes.  We believe that the addition of modular homes
broadens  our potential markets and will allow us to sell more homes, over time,
than  by  limiting  our production and marketing strictly to HUD-code homes. Our
new  homes  retail  from  $18,700  to  $120,800,  excluding  land  costs.

     The  following  table  sets  forth  the  total HUD code homes and the total
modular  (IHB-code)  homes  manufactured  by  our  two Texas new-home facilities
currently  operating:

<TABLE>
<CAPTION>
                           THREE MONTHS   NINE MONTHS    YEAR
                               ENDED         ENDED      ENDED
                           SEPTEMBER 29,   JUNE 28,    JUNE 27,
                               2001          2002        2003
                           -------------  -----------  --------
<S>                        <C>            <C>          <C>

     HUD Code . . . . . .            340        1,163     1,164
     IHB (Modular) - Code              3           13        84
                           -------------  -----------  --------
       Total. . . . . . .            343        1,176     1,248
                           =============  ===========  ========
</TABLE>

     By  providing  such  a broad selection of homes, we believe we can meet the
financial  and  aesthetic  requirements  of  the  full  range  of retail buyers.
Additionally,  we  believe  we  offer  high  quality homes that incorporate more
innovative  architectural designs and features than are typically offered by our
competitors.  Over the past several years, as the demand for multi-section homes
has  increased,  we have significantly increased our production of multi-section
homes  to  86% of total homes manufactured in fiscal 2003, up from 50% in fiscal
1994.

     The Company's manufacturing facilities generally operate on a one shift per
day,  five-day  per  week  basis.  At  June 27, 2003, our two operating new-home
production  facilities  had  the capacity to produce approximately 20 floors per
day,  and  the  production  rate was approximately nine floors per day (capacity
figures  are  estimates  of management). A floor is a single-section home or one
section  of a multi-section home. The following table sets forth the total homes
and floors manufactured by the Company for the periods indicated:

<TABLE>
<CAPTION>
                             YEAR    THREE MONTHS   NINE MONTHS    YEAR
                            ENDED        ENDED         ENDED      ENDED
                           JUNE 29,  SEPTEMBER 29,   JUNE 28,    JUNE 27,
                             2001        2001          2002        2003
                           --------  -------------  -----------  --------
                                PREDECESSOR CO.         SUCCESSOR CO.
                           -----------------------  ---------------------
<S>                        <C>       <C>            <C>          <C>
Homes manufactured:
    Single-section. . . .       535            111          306       173
    Multi-section . . . .     3,121            232          870     1,075
                           --------  -------------  -----------  --------
Total homes manufactured.     3,656            343        1,176     1,248
                           ========  =============  ===========  ========

Total floors manufactured     6,777            575        2,046     2,319
                           ========  =============  ===========  ========
</TABLE>

     The  principal  materials  used  in  the  construction of our homes include
lumber  and  lumber  products,  gypsum  wallboard,  steel, aluminum, fiberglass,
carpet,  vinyl,  fasteners,  appliances,  electrical  items,  windows and doors.
Generally,  the  materials  used  in  the  manufacture  of our homes are readily
available  at  competitive prices from a wide variety of suppliers. Accordingly,
we  do not believe the loss of any single supplier would have a material adverse
effect on our business. Our direct or variable costs of operations, however, can
be  significantly  affected  by  the market-wide availability and pricing of raw
materials.


                                        7
<PAGE>
     We  generally  build  a  home  only  after  an  order has been received and
acceptable  payment  arrangements  have  been  made. In accordance with industry
practice,  dealers  can  cancel  orders  prior to the commencement of production
without  penalty,  and accordingly, the Company does not consider its backlog of
orders  from  independent dealers to be firm orders.  Because of the seasonality
of  the  market  for manufactured homes, the level of backlog at any time is not
necessarily  indicative  of the expected level of future orders. Our backlog, as
well  as level of new orders from independent dealers, generally declines during
the  winter  months  (mid-November  through  February).

FINANCING

     In  June  2000, we invested $2.4 million to provide one-half of the initial
capitalization  of  Homestar  21,  LLC ("Homestar 21"), which is a joint venture
that  is  owned  50%  by the Company and 50% by 21st Mortgage Corporation ("21st
Mortgage"),  a company not affiliated with us. Homestar 21 is a finance company,
specializing  in providing chattel and non-conforming land/home financing to our
customers. We account for our investment in Homestar 21 using the equity method.

     In  May  2002,  we  invested  $31,500  to  provide  one-half of the initial
capitalization  of American Homestar Mortgage, L.P. ("Homestar Mortgage"), which
is  a  joint  venture  that  is owned 50% by us and 50% by Home Loan Corporation
("Home Loan"), a company not affiliated with us. Homestar Mortgage is a mortgage
broker/loan  originator  for  ultimate  loan  placement with Home Loan and other
mortgage  banks. Homestar Mortgage bears no lending risk on loans it originates.
We  account  for our investment in Homestar Mortgage using the equity method. In
August  2003  (after  year-end)  we  agreed,  along  with  Home  Loan,  to cease
operations  in  Homestar  Mortgage and to develop a broader network of preferred
lending  relationships  with  several  independent traditional mortgage lenders.

     To  ensure  that  we remain fully competitive and have access to all retail
financing products available, we maintain relationships with several independent
mortgage  and chattel retail lenders. These relationships are intended to spread
the  business  more evenly among various lenders and to ensure that financing is
available  from  several  sources. We believe that these relationships afford us
access  to  a broader range of competitive financing programs that, in turn, may
result  in  increased  retail  sales.

INSURANCE

     Through  our  wholly  owned  subsidiary,  Western  Insurance  Agency,  Inc.
("Western"),  we  offer  our  retail  customers a variety of insurance products,
including  property  and  casualty insurance, credit life insurance and extended
service  contracts.  We act as the agent and earn commissions and profit-sharing
bonuses,  in  favorable loss years, from insurance written for the purchasers of
manufactured  homes  we  sell.

     Through our wholly owned subsidiary, Lifestar Reinsurance Ltd. ("Lifestar")
we  underwrote  the  risk  on  credit life policies we sold. We elected to cease
operations  in  Lifestar  in  May  2002  because the life insurance underwriting
activity  was  producing  steadily  declining  returns. Instead we will share in
favorable  loss  experience,  if  any,  as  to the life insurance as well as the
property  and casualty insurance through new agreements between the insurers and
Western.

TRANSPORTATION

     Roadmasters  Transport  Company,  Inc.  ("Roadmasters"),  a  51%  owned
subsidiary,  provides  manufactured  housing  transportation services, including
transportation  of  manufactured  homes  from  our  manufacturing  facilities.
Roadmasters operates through independent owner-operators, allowing us to cover a
large  geographic  area  with  no  investment in equipment.  We believe that our
controlling  ownership  interest  in Roadmasters provides us better control over
the  delivery  of  homes  to  our  retail  sales centers and subdivisions and to
independent  retailers and developers, especially during peak sales and delivery
periods,  as  well  as  to  profit  from  each  home  shipment.

COMPETITION

     The  manufactured  housing industry is highly competitive. Competition with
other housing manufacturers on both the manufacturing and retail levels is based
primarily  on  price,  product  features,  reputation  for  service  and


                                        8
<PAGE>
quality,  retail  inventory,  merchandising,  and  the terms and availability of
wholesale and retail customer financing. Growth in manufacturing capacity during
the  1990s increased competition at both the manufacturing and retail levels and
resulted  in both regional and national competitors increasing their presence in
the markets in which we compete. Overproduction of manufactured housing in these
regions could lead to greater competition and result in decreased margins, which
could have a material adverse effect on our results of operations.

     In  addition,  manufactured  homes compete with new and existing site-built
homes,  apartments,  townhouses and condominiums. The supply of such housing has
increased  in  recent  years with the increased availability of construction and
low  cost  mortgage  financing,  which  continues  to  reduce  the  demand  for
manufactured  homes.  Manufactured homes also compete with resales of homes that
have  been  repossessed by financial institutions as a result of credit defaults
by  dealers  or  customers.  Repossession  rates  for  manufactured  homes  have
increased  in recent years and there can be no assurance that repossession rates
will  not continue to increase, thereby adversely affecting our sales volume and
profit  margins.  The  manufactured  housing industry, as well as the site-built
housing  development  industry,  has  experienced consolidation in recent years,
which  could  result  in  the  emergence of competitors, including developers of
site-built  homes that have greater financial resources than we have. We are not
able to estimate the total number of retail and manufacturing competitors in our
marketing  area.

GOVERNMENT  REGULATION

     The  Company's manufactured homes are subject to a number of federal, state
and  local laws and codes. Construction of manufactured homes is governed by the
National  Manufactured  Home  Construction  and Safety Standards Act of 1974, as
amended  (the  "MHCSS  Act"),  and  the  regulations issued by the Department of
Housing  and  Urban Development ("HUD") thereunder, that establish comprehensive
national  construction  standards.  These  regulations  cover  all  aspects  of
manufactured  home  construction,  including  structural integrity, fire safety,
wind loads, thermal protection and ventilation. Our manufacturing facilities and
the  plans  and specifications of our manufactured homes have been approved by a
HUD-designated  inspection  agency.  Our  homes  are  regularly  inspected by an
independent  HUD-approved  inspector for compliance during construction. Failure
to  comply  with applicable HUD regulations could expose us to a wide variety of
sanctions,  including  mandated  closings  of  our  manufacturing facilities. We
believe  our  manufactured  homes  meet or surpass all present HUD requirements.

     We  are  also subject to the Texas Industrialized Housing and Buildings Act
("IHB"), which regulates the construction of modular buildings, both residential
and  commercial,  and  modular  components in the State of Texas. We believe our
modular  homes  meet  or  surpass  all  IHB  requirements.

     Manufactured,  modular  and  site-built  homes are all typically built with
particleboard,  paneling  and  other  products that contain various formaldehyde
resins.  HUD  regulates  the  allowable concentration of formaldehyde in certain
products  used  in  manufactured  homes  and  requires  warnings  to  purchasers
concerning  formaldehyde-associated  risks.  Certain  components of manufactured
homes  are  subject  to  regulation  by  the Consumer Products Safety Commission
("CPSC"),  which  is empowered to ban the use of component materials believed to
be  hazardous  to  health  and  to require the manufacturer to repair defects in
components of its homes. The CPSC, the Environmental Protection Agency and other
governmental  agencies  currently  are re-evaluating the allowable standards for
formaldehyde emissions. We use materials in our manufactured homes that meet the
current  HUD  standards for formaldehyde emissions and believe that we otherwise
comply  with  HUD  and  other  applicable government regulations in this regard.

     The manufacturing operations of the Company are subject to the requirements
of  the  Occupational  Safety and Health Act ("OSHA") and comparable state laws.
Regulations  promulgated under OSHA by the Department of Labor require employers
of  persons  in  manufacturing industries, including independent contractors, to
implement work practices, medical surveillance systems, and personnel protection
programs  in  order  to protect employees from workplace hazards and exposure to
hazardous  chemicals. Regulations such as OSHA's Process Safety Management (PSM)
standard  require  facility  owners  and  their contractors to ensure that their
employees  are  adequately trained regarding safe work practices and informed of
known  potential  hazards.  We  have  established  comprehensive  programs  for
complying  with  health and safety regulations. While we believe that we operate
our  manufacturing  facilities  safely  and prudently, there can be no assurance
that  accidents will not occur or that we will not incur liability in connection
with  the  operation  of  our  business.


                                        9
<PAGE>
     Our operations are also subject to the provisions of the Texas Manufactured
Housing  Act,  the  Consumer Credit Act and the Truth-in-Lending Act, as well as
local  zoning  and  housing regulations. A number of states require manufactured
home  producers  and  retailers  to  post  bonds  to  ensure the satisfaction of
consumer  warranty  claims. A number of states have adopted procedures governing
the installation of manufactured homes. Utility connections are subject to state
and  local  regulation  and  must be complied with by the dealer or other person
installing  the  home.  The operations of Roadmasters and Western are subject to
regulation  by  various  federal,  state  and  local  authorities.

     A  variety  of  laws  affect  the  financing  of  manufactured homes by the
Company.  The  Truth-in-Lending  Act  and  Regulation  Z  promulgated thereunder
require  written disclosure of information relating to such financing, including
the  amount  of the annual percentage rate and financing charge. The Fair Credit
Act  also  requires certain disclosures to potential customers concerning credit
information used as a basis to deny credit. The Federal Equal Credit Opportunity
Act  and Regulation B promulgated thereunder prohibit discrimination against any
credit  applicant  based  on  certain  specified  grounds.  The  Federal  Trade
Commission  has  adopted or proposed various trade regulation rules dealing with
unfair credit and collection practices and the preservation of consumers' claims
and  defenses.  The Federal Trade Commission regulations also require disclosure
of  a  manufactured home's insulation specification. Installment sales contracts
eligible  for  inclusion in the Government National Mortgage Association Program
are  subject  to  the  credit  underwriting  requirements of the Federal Housing
Administration.  The  Real  Estate  Settlement  Procedures  Act and Regulation X
promulgated thereunder require certain disclosures regarding the nature and cost
of  real  estate  settlements. A variety of state laws also regulate the form of
installment  sales  contracts  and the allowable charges pursuant to installment
sales  contracts.  The  sale  of insurance products by the Company is subject to
various state insurance laws and regulations, which govern allowable charges and
other  insurance  products.

     We are also subject to the provisions of the Fair Debt Collection Practices
Act, which regulates the manner in which we collect payments on installment sale
contracts,  and  the Magnuson-Moss Warranty-Federal Trade Commission Improvement
Act,  which  regulates the descriptions of warranties on products Our collection
activities  and  warranties  are  also  subject  to  state laws and regulations.

     The  transportation  of  manufactured  homes  on  highways  is  subject  to
regulation by various federal, state and local authorities. Such regulations may
prescribe  size  and  road  use  limitations  and impose lower than normal speed
limits  and  various  other  requirements.

     Our  operations  are  also  subject  to  federal,  state and local laws and
regulations  relating  to  the  generation,  storage,  handling,  emission,
transportation and discharge of materials into the environment. We are not aware
of  any pending litigation to which we are a party or any claims that may result
in  significant  contingent  liabilities  related  to environmental pollution or
asbestos.  In  addition,  we  do  not believe we will be required under existing
environmental  laws  and enforcement policies to expend amounts that will have a
material  adverse  effect  on  our results of operations or financial condition.

     A  significant  portion of the Company's manufacturing labor force includes
persons  who are not U.S. citizens, and we are subject to the regulations of the
Immigration  and  Naturalization  Service  ("INS").  We adhere to the procedures
required  for  the prevention of the hiring of illegal aliens, but, nonetheless,
we have from time to time experienced losses of a portion of our labor force due
to  INS  investigative  operations  and  these losses have temporarily decreased
production  at  the  affected  manufacturing  facilities.

     In  general,  legislation  is  proposed from time to time that, if enacted,
would  significantly  affect the regulatory climate for manufactured and modular
homes.  At  present,  it  is  not  possible  to predict what, if any, changes or
legislation  may  be  adopted  or the effect any such changes or legislation may
have  on  the  Company  or  the  manufactured  housing  industry  as  a  whole.

EMPLOYEES

     At June 27, 2003, we employed 672 people, compared to 770 at June 28, 2002.
Of  our  672 employees, 217 were employed in retail, 375 in manufacturing, 34 in
transportation,  9  in  insurance,  and  37  in  executive  and  administrative


                                       10
<PAGE>
positions.  We  do  not  have  any collective bargaining agreements and have not
experienced  any  work  stoppages as a result of labor disputes. We consider our
employee  relations  to  be  good.

     A  significant  portion  of  the total potential compensation of senior and
middle  management of the Company is derived from incentive bonuses based on the
operating income of the operating unit for which such management is responsible,
as  well  as  the attainment of Company-wide performance objectives. Many of our
managers  are  participants  in the option grants of Series M common stock under
the  Company's  2001  Management  Incentive  Program  established  by  the Plan.

RISKS  RELATING  TO  OUR  BUSINESS

     If  any  of  the  following  risks  actually  occur  or  worsen, they could
materially  adversely  affect  our  business,  financial  condition or operating
results.

EXCESS  INVENTORIES  AMONG RETAILERS COULD CONTINUE TO HAVE A NEGATIVE EFFECT ON
OUR  SALES  VOLUME  AND  PROFIT  MARGINS.

     The  level  of  manufactured  housing  inventories  and  the  existence  of
repossessed  homes  in the market can have a significant impact on manufacturing
shipments  and  operating  results,  as  evidenced  in  the manufactured housing
industry  during the past three years. There is currently an imbalance among the
number  of  retail  dealers, industry retail inventories and consumer demand for
manufactured  homes.  Considering  current  retail  demand, it is estimated that
there  may  be  as  much as a six-month supply of manufactured homes in retailer
inventories  industry-wide.  Competition  from  resales of repossessed homes has
further  extended  this  inventory  adjustment  period  as  more liberal lending
standards  in the past resulted in loans to less-creditworthy customers. Many of
these  customers  are defaulting on these loans and the lenders are repossessing
the  customers' homes and reselling them at prices often significantly below the
retail  price of a new home, thereby increasing competition for manufacturers of
new  homes.  If  these  trends  were  to  continue,  or if retail demand were to
significantly  weaken  further,  the  excess  inventory  supply  could result in
intense price competition and pressure on profit margins within the industry and
could  have  an  adverse  impact  on  our  operating  results.

THE CURRENT DOWNTURN IN THE MANUFACTURED HOUSING INDUSTRY HAS ADVERSELY AFFECTED
OUR OPERATING RESULTS. IF THE CURRENT DOWNTURN DOES NOT REVERSE, OUR SALES COULD
DECLINE  AND  WE  MAY  SUFFER  FURTHER  LOSSES.

     Since  mid-1999 the manufactured housing industry has experienced declining
manufacturing  shipments,  tightened  consumer  credit  standards, excess retail
locations and inventory, reduced availability of consumer financing, high levels
of  homes  repossessed  from  consumers,  higher  interest rates on manufactured
housing loans relative to those generally available to site-built home buyers, a
reduced  number  of  consumer  and  floor  plan  lenders, and reduced floor plan
availability  in  the industry. According to the Manufactured Housing Institute,
factory  shipments  declined from a cyclical high of approximately 373,000 homes
in  1998  to 168,000 in 2002. If the current downturn in the industry continues,
our  sales  could  continue to decline and we may incur further losses including
additional  closures  or  consolidations  of  existing  operations.

OUR  BUSINESS  IS SEASONAL AND CYCLICAL AND THIS LEADS TO FLUCTUATIONS IN SALES,
PRODUCTION  AND  OPERATING  RESULTS.

     We  have  experienced,  and  expect  to continue to experience, significant
variability  in  sales,  production and net income as a result of seasonality in
our  business.  Demand  in  the manufactured housing industry generally declines
during  the  winter season, while sales and profits are generally highest during
the  spring  and  summer  months.  The  industry  in  which we operate is highly
cyclical  and  there  can  be  substantial  fluctuations  in  our  manufacturing
shipments,  retail  sales  and  operating results, and the results for any prior
period  may  not be indicative of results for any future period. We are affected
by  interest  rates  for  manufactured  homes  and  for  sited  homes  and  the
availability  of financing for manufactured housing products, both of which have
had an adverse effect on our business in the past two fiscal years. Unemployment
trends,  consumer  confidence,  general  economic  conditions  and  effects  on
consumers  from  terrorist  actions  may  also  affect  our  business.


                                       11
<PAGE>
TIGHTENED  CREDIT  STANDARDS,  CURTAILED  LENDING  ACTIVITY, TIGHTENED TERMS AND
INCREASED  INTEREST  RATES  AMONG  CONSUMER  LENDERS  HAVE REDUCED OUR SALES. IF
CONSUMER  FINANCING  WERE  TO  BECOME  FURTHER CURTAILED OR UNAVAILABLE WE COULD
EXPERIENCE  FURTHER  SALES  DECLINES.

     The  consumers  who  buy  our  homes  have  historically  secured  consumer
financing  from  third  party  lenders.  The  availability,  terms  and costs of
consumer  financing  depend  on the lending practices of financial institutions,
governmental  regulations  and  economic  and other conditions, all of which are
beyond our control. A consumer seeking to finance the purchase of a manufactured
home  without  land will generally pay a higher interest rate and have a shorter
loan  term than a consumer seeking to finance the purchase of land and the home.
Manufactured  home  consumer financing is at times more difficult to obtain than
financing  for site-built homes. Since 1999, consumer lenders have tightened the
credit  underwriting  standards  and loan terms and increased interest rates for
loans  to  purchase  manufactured  homes, which have reduced lending volumes and
caused  our  sales  to  decline.  Conseco, Inc. has historically been one of the
largest  consumer lenders in the manufactured housing industry. In October 2002,
Conseco  discontinued  providing financing for the manufactured housing industry
and  filed  a  petition for bankruptcy in December 2002. The poor performance of
portfolios  of  manufactured  housing consumer loans in recent years has made it
more  difficult  for  industry  consumer  finance  companies to obtain long-term
capital in the asset-backed securitization market. As a result, consumer finance
companies  have  curtailed  their  industry  lending  and  some  have exited the
manufactured  housing  market. If consumer financing for manufactured homes were
to  become  further curtailed or unavailable, we would likely experience further
retail  and  manufacturing  sales  declines.

REDUCED  NUMBER  OF  FLOOR PLAN LENDERS AND REDUCED AMOUNT OF CREDIT ALLOWED MAY
AFFECT  OUR  ABILITY  TO  INVENTORY  NEW  HOMES.

     During  2002  the  industry's  two  largest floor plan lenders, Conseco and
Deutsche  Financial  Services who recently provided as much as approximately 45%
of  the industry's wholesale financing, exited the business thereby reducing the
amount  of  credit  available  to  industry  retailers. The remaining floor plan
lenders  or new floor plan lenders entering the industry may change the terms of
their  loans  as compared to the traditional terms of industry floor plan loans.
These  changes  could  include  higher  interest  rates,  smaller advance rates,
earlier  or more significant principal payments or longer repurchase periods for
the  manufacturers.  Although  our  floor  plan  debt levels are very low today,
further  reductions  in  the  availability  of  floor plan lending may adversely
affect  our  ability to carry a sufficient inventory level of new homes when our
current  line  matures  in  October  2004.

WE ARE AFFECTED BY OUR ABILITY TO SECURITIZE OR FUND LOANS.

     We  offer  chattel  and  non-conforming  land  home  mortgage  loans to our
customers  through  Homestar  21.  Homestar  21  in  the  past  has entered into
asset-backed securitization transactions to obtain longer term funding for these
loans.  The  asset-backed securitization market for manufactured housing lenders
has  continued to deteriorate in the past year in terms of access to the markets
as  well  as  pricing and credit enhancement levels. If Homestar 21 is unable to
securitize  its  loans on terms that are economical, it will be required to seek
other  sources  of  long  term  funding.

WE ARE AFFECTED BY THE ABILITY OF OUR CUSTOMERS TO REPAY THEIR LOANS.

     Homestar  21  makes  loans  to  borrowers that it believes are creditworthy
based  on  its  credit  guidelines.  These  customers  may  experience  adverse
employment,  financial, or life circumstances that affect their ability to repay
their  loans.  If customers do not repay their loans, the profitability and cash
flow  from  the  loan  portfolio  could  be  adversely  affected.

THE  MANUFACTURED  HOUSING  INDUSTRY  IS  HIGHLY  COMPETITIVE  AND  SOME  OF OUR
COMPETITORS  HAVE  STRONGER  BALANCE  SHEETS  AND  CASH FLOW, AS WELL AS GREATER
ACCESS  TO  CAPITAL,  THAN WE DO. THE RELATIVE STRENGTH OF OUR COMPETITORS COULD
RESULT  IN  DECREASED  SALES  VOLUME  AND  EARNINGS  FOR  US, WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     The  manufactured  housing industry is highly competitive. Competition with
other housing manufacturers on both the manufacturing and retail levels is based
primarily  on  price,  product  features,  reputation  for  service  and


                                       12
<PAGE>
quality,  retail  inventory,  merchandising,  and  the terms and availability of
wholesale and retail customer financing. Growth in manufacturing capacity during
the  1990s increased competition at both the manufacturing and retail levels and
resulted  in both regional and national competitors increasing their presence in
the markets in which we compete. Overproduction of manufactured housing in these
regions could lead to greater competition and result in decreased margins, which
could  have a material adverse effect on our results of operations. In addition,
manufactured  homes  compete with new and existing site-built homes, apartments,
townhouses  and condominiums. The supply of such housing has increased in recent
years  with  the  increased  availability  of  construction  financing, and this
reduces  the demand for manufactured homes. Manufactured homes also compete with
resales  of  homes  that  have  been  repossessed by financial institutions as a
result  of  credit  defaults  by  dealers  or  customers. Repossession rates for
manufactured  homes have increased in recent years and there can be no assurance
that  repossession  rates  will  not  continue  to  increase,  thereby adversely
affecting  our  sales  volume  and  profit  margins.  The  manufactured  housing
industry,  as  well  as  the  site-built  housing  development  industry,  has
experienced  consolidation  in recent years, which could result in the emergence
of  competitors,  including  developers  of  site-built  homes that have greater
financial resources than we have. This could adversely affect our business.

OUR  MARKET  IS  THE  SOUTHWEST  REGION  WITH  OUR PRIMARY FOCUS IN TEXAS, AND A
DECLINE IN DEMAND IN THAT AREA COULD HAVE A MATERIAL NEGATIVE EFFECT ON SALES.

     A disproportionate decrease in general economic conditions in the Southwest
region  of  the  U.S.  versus  other  areas of the country would have a material
adverse  effect  on  our  results  of  operations.

THE  LOSS  OF  OUR  EXECUTIVE  OFFICERS  COULD REDUCE OUR ABILITY TO ACHIEVE OUR
BUSINESS  PLAN  AND  COULD  HAVE  A  MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND
OPERATING  RESULTS.

     American  Homestar  is  dependent  on  the  services and performance of our
executive  officers,  including our President and Chief Executive Officer, Finis
F.  Teeter.  The  loss  of the services of one or more of our executive officers
could  have  a  material  adverse  effect upon the Company's business, financial
condition  and  results  of  operations,  at  least  in  the  short  term.

OTHER  INFORMATION  ABOUT  THE  COMPANY

     The  Company  is  subject  to  the reporting requirements of the Securities
Exchange  Act  of  1934.  During  our reorganization, we did not prepare or file
annual  or quarterly reports with the Securities and Exchange Commission ("SEC")
but  instead  filed  Monthly  Operating  Reports  with  the Bankruptcy Court, as
required  by  the  Bankruptcy Code. We also filed our Monthly Operating Reports,
our  confirmed  Plan and our audited Fresh-Start balance sheet with the SEC. The
public  may  read  and  copy any materials the Company files with the SEC at the
SEC's  Public Reference Room at 450 Fifth Street, NW, Washington D.C. 20549, and
may  obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains a website, http://www/sec.gov, that
contains  reports,  proxy  and  information  statements,  and  other information
regarding  issuers  that  file  electronically  with  the  SEC.  Our  website is
www.americanhomestar.com.


                                       13
<PAGE>
ITEM  2.  PROPERTIES

     At June 27, 2003, we operated two new home manufacturing facilities and one
refurbishment facility in Texas, 31 retail sales centers, three sales offices in
manufactured housing communities and an administrative office. Twenty one of the
retail  sales  centers  and  the  administrative office are leased under various
noncancellable  operating  leases  with  varying  monthly  payments  and varying
expiration  dates  through  March  2007.  We  own the remaining ten retail sales
centers.  Our  retail sales centers consist of tracts of land, ranging generally
from  2.5  to  7.0 acres, on which manufactured homes are displayed, each with a
sales  office  containing  approximately  2,000 square feet of office space. Our
retail  sales  centers  are  located  in three states as follows: Louisiana (1),
Oklahoma  (2),  and  Texas (28), along with three sales offices in manufacturing
housing  communities  in  Texas.  We  believe that all facilities are adequately
maintained  and  suitable  for  their  present  use.

     We  own  all of our manufacturing facilities (including those classified as
assets  held  for  sale)  and  substantially all of our manufacturing equipment,
fixtures, furniture and office equipment. The following table sets forth certain
information with respect to the Company's manufacturing facilities:

<TABLE>
<CAPTION>
                                                        DATE OPENED OR   BUILDING
          LOCATION                                         ACQUIRED     SQUARE FEET
<S>                                                     <C>             <C>
          Active facilities:
          Fort Worth, Texas. . . . . . . . . . . . . .  June 1985           137,000
          Lancaster, Texas . . . . . . . . . . . . . .  December 1992        86,600
          Burleson, Texas. . . . . . . . . . . . . . .  May 1993             94,500

          Idle facilities reported as assets held for
           sale:
          Henderson, North Carolina. . . . . . . . . .  September 1996       70,000
          Brilliant, Alabama . . . . . . . . . . . . .  June 1997           127,500
          Lynn, Alabama. . . . . . . . . . . . . . . .  June 1997           150,000
          Pendleton, Oregon (1). . . . . . . . . . . .  September 1996      146,000
<FN>
          (1) Currently leased to a third party
</TABLE>

ITEM  3.  LEGAL  PROCEEDINGS

     On  the Effective Date of the Plan, most pending claims against the Company
were  discharged  and an injunction was issued barring any future claims arising
from  events  that occurred prior to October 3, 2001. In a few cases, litigation
has  been  reinstated  solely  for  the  purpose  of determining the amount of a
general  unsecured  claim  against  the  Company  or  a  claim to be paid by the
Company's  insurers.  Since the Effective Date, there have been no other pending
legal  proceedings,  except  for  normal  routine  litigation  incidental to the
business, which management believes is not material to our business or financial
condition.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     None.


                                       14
<PAGE>
                                     PART II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
PRICE  RANGE  OF  COMMON  STOCK

     Under  the  terms  of  the  Plan,  all equity interests in the Company were
cancelled  as  of  October  3,  2001,  the  Effective  Date,  and all holders of
outstanding  shares of Company stock, which had previously traded, on the NASDAQ
National  Market,  under  the  symbols HSTR and HSTRQ, lost all rights to equity
interests  in  and  to the reorganized Company.  Under the Plan, the Company has
the  authority  to  issue  15 million shares of new Series C common stock and is
required  to  issue  10  million  shares of Series C common stock to its general
unsecured  creditors.  As  of September 23, 2003, there were 204 specific record
holders  of  the Company's Series C common stock, which holders have been issued
6,780,364  shares  of  Series C common stock. The remaining 3,219,636 shares are
deemed  issued  and  being  held  in  constructive  trust  for  the  benefit  of
shareholders  to  be  determined  in  name  and  amount as the claims process is
completed.  The  remaining  shares  of Series C common stock will continue to be
issued  on  an  incremental basis as the Bankruptcy court enters orders allowing
and  disallowing  claims  that  have been filed in the Company's bankruptcy case
until  all  10 million shares of Series C common stock are issued. We expect the
claims  process  to  be  completed  by  April  2004.

     The  Company also has the authority to issue 7.5 million shares of Series M
common  stock to management, 100 shares of which had been issued as of September
23,  2003.

All  shares  of the Company's new common stock are restricted as to sale through
April  2004.  There have been no sales of Series C or Series M common stock, and
no quotations for such shares have been published on any securities market.

DIVIDEND  POLICY

     American Homestar has not paid any cash dividends on its common stock since
it  became a public reporting company.  The Board of Directors intends to retain
any  future  earnings generated by the Company to support and finance operations
and  does  not  intend  to  pay  cash  dividends  on  our  common  stock for the
foreseeable  future.  The payment of cash dividends in the future will be at the
discretion  of  the  Board  and will depend upon a number of factors such as the
Company's  earnings  levels,  capital  requirements, financial condition and any
other  factors  deemed  relevant by the Board of Directors. The terms of certain
indebtedness of the Company may or may not restrict the Company's ability to pay
dividends  or  make  additional  distributions.


SALES  OF  UNREGISTERED  SECURITIES

     We  have  had  no  sales  of  unregistered securities during the last three
years.


                                       15
<PAGE>
ITEM  6.  SELECTED  FINANCIAL  DATA

     The  financial information set forth under Statement of Operations Data and
Balance  Sheet  Data  for  the fiscal period ended May 1999, the one month ended
June  30, 1999, and the fiscal year ended June 30, 2000, and as of the reporting
periods  then  ended,  was derived from the Consolidated Financial Statements of
the Company (and its subsidiaries), which financial statements have been audited
by KPMG LLP, independent certified public accountants. The financial information
set  forth  under  Statement  of  Operations Data and Balance Sheet Data for the
fiscal  period  ended June 29, 2001, three months ended September 29, 2001, nine
months  ended  June  28,  2002  and  fiscal period ended June 27, 2003 have been
audited  by  Mann  Frankfort  Stein  &  Lipp CPAs, L.L.P., independent certified
public accountants.  The Consolidated Financial Statements for the fiscal period
June 29, 2001, three month period ended September 29, 2001 and nine month period
ended June 28, 2002 and fiscal period ended June 27, 2003 are included elsewhere
herein.  The  selected  financial  data  should  be  read  in  conjunction  with
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations"  and the consolidated financial statements and related notes thereto
included  in  Item  8  of  this  Form 10-K (in thousands except per share data).

<TABLE>
<CAPTION>
                                                                 YEAR      ONE MONTH       THREE MONTHS          NINE MONTHS
                                                                 ENDED       ENDED          YEARS ENDED            ENDED
                                                                                       ----------------------
                                                                 MAY 31,    JUNE 30,    JUNE 30,    JUNE 29,    SEPTEMBER 29,
                                                                  1999        1999        2000        2001          2001
                                                                ---------  ----------  ----------  ----------  ---------------
                                                                                       PREDECESSOR CO.
                                                                --------------------------------------------------------------
<S>                                                             <C>        <C>         <C>         <C>         <C>
                                                                             (in thousands, except per share amounts)
STATEMENT OF OPERATIONS DATA:
Revenues:
   Net sales . . . . . . . . . . . . . . . . . . . . . . . . .  $612,086   $  49,272   $ 532,634   $ 217,375   $       21,107
   Other revenues. . . . . . . . . . . . . . . . . . . . . . .    41,957       3,493      41,402      24,399            5,137
                                                                ---------  ----------  ----------  ----------  ---------------
         Total revenues. . . . . . . . . . . . . . . . . . . .   654,043      52,765     574,036     241,774           26,244
                                                                ---------  ----------  ----------  ----------  ---------------

Costs and expenses:
   Cost of sales . . . . . . . . . . . . . . . . . . . . . . .   477,717      40,214     446,378     174,999           16,086
   Selling, general and administrative . . . . . . . . . . . .   134,682      12,487     153,769      77,948           10,290
   Restructuring charges, goodwill and asset
      impairments(1) . . . . . . . . . . . . . . . . . . . . .        --          --      22,097     139,216
                                                                ---------  ----------  ----------  ----------  ---------------
         Total costs and expenses. . . . . . . . . . . . . . .   612,399      52,701     622,244     392,163           26,376
                                                                ---------  ----------  ----------  ----------  ---------------

         Operating income (loss) . . . . . . . . . . . . . . .    41,644          64     (48,208)   (150,389)            (132)
Interest expense . . . . . . . . . . . . . . . . . . . . . . .   (13,845)     (1,487)    (18,366)    (11,231)            (214)
Other income (expense) . . . . . . . . . . . . . . . . . . . .       110          19        (566)        813               88
                                                                ---------  ----------  ----------  ----------  ---------------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .    27,909      (1,404)    (67,140)   (160,807)            (258)
Reorganization items:
   Fresh-Start adjustments . . . . . . . . . . . . . . . . . .        --          --          --          --           18,863
   Reorganization costs. . . . . . . . . . . . . . . . . . . .        --          --          --      (2,796)          (1,433)
                                                                ---------  ----------  ----------  ----------  ---------------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .    27,909      (1,404)    (67,140)   (163,603)          17,172
Income tax expense (benefit) . . . . . . . . . . . . . . . . .    11,472        (462)    (20,141)     16,239               20
                                                                ---------  ----------  ----------  ----------  ---------------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .    16,437        (942)    (46,999)   (179,842)          17,152
Earnings (losses) in affiliates. . . . . . . . . . . . . . . .     1,602          49        (350)        492              145
Minority interest in income of consolidated
   subsidiaries . . . . . . . . . . . . . . . . . . . . . . .        (98)        (20)       (242)        142              (50)
                                                                ---------  ----------  ----------  ----------  ---------------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .    17,941        (913)    (47,591)   (179,208)          17,247
Extraordinary item, net of income tax benefit(2) . . . . . . .        --          --          --          --          139,310
                                                                ---------  ----------  ----------  ----------  ---------------
         Net income (loss) . . . . . . . . . . . . . . . . . .  $ 17,941   $    (913)  $ (47,591)  $(179,208)  $      156,377
                                                                =========  ==========  ==========  ==========  ===============

Earnings (loss) per share before extraordinary
   item - basic and diluted. . . . . . . . . . . . . . . . . .  $   0.96   $   (0.05)  $   (2.59)  $     N/A   $          N/A
Earnings (loss) per share - basic and diluted. . . . . . . . .  $   0.96   $   (0.05)  $   (2.59)  $     N/A   $          N/A
Weighted average shares outstanding - basic and
   diluted . . . . . . . . . . . . . . . . . . . . . . . . . .    18,669      18,586      18,423         N/A              N/A

BALANCE SHEET DATA (END OF FISCAL YEAR):
Working capital. . . . . . . . . . . . . . . . . . . . . . . .  $ 60,859   $     N/A   $  39,993   $  27,094   $       11,797
Total assets . . . . . . . . . . . . . . . . . . . . . . . . .   439,316         N/A     362,233      96,352           76,606
Total borrowings . . . . . . . . . . . . . . . . . . . . . . .   216,845         N/A     208,176      24,462           21,102
Shareholders' equity . . . . . . . . . . . . . . . . . . . . .  $135,465   $     N/A   $  92,902   $ (91,327)  $       30,179


                                                               NINE MONTHS   YEAR
                                                                  ENDED      ENDED
                                                                 JUNE 28    JUNE 27,
                                                                  2002        2003
                                                                ---------  ----------
                                                                    SUCCESSOR CO.
                                                                ---------------------
<S>                                                             <C>        <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
   Net sales . . . . . . . . . . . . . . . . . . . . . . . . .  $ 64,234   $  71,847
   Other revenues. . . . . . . . . . . . . . . . . . . . . . .    18,584      20,293
                                                                ---------  ----------
         Total revenues. . . . . . . . . . . . . . . . . . . .    82,818      92,140
                                                                ---------  ----------

Costs and expenses:
   Cost of sales . . . . . . . . . . . . . . . . . . . . . . .    52,184      63,878
   Selling, general and administrative . . . . . . . . . . . .    28,703      29,566
   Restructuring charges, goodwill and asset
      impairments(1) . . . . . . . . . . . . . . . . . . . . .        --          --
                                                                ---------  ----------
         Total costs and expenses. . . . . . . . . . . . . . .    80,887      93,444
                                                                ---------  ----------

         Operating income (loss) . . . . . . . . . . . . . . .     1,931      (1,304)
Interest expense . . . . . . . . . . . . . . . . . . . . . . .      (825)       (955)
Other income (expense) . . . . . . . . . . . . . . . . . . . .       245         363
                                                                ---------  ----------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .     1,351      (1,896)
Reorganization items:
   Fresh-Start adjustments . . . . . . . . . . . . . . . . . .        --          --
   Reorganization costs. . . . . . . . . . . . . . . . . . . .        --          --
                                                                ---------  ----------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .     1,351      (1,896)
Income tax expense (benefit) . . . . . . . . . . . . . . . . .       247         282
                                                                ---------  ----------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .     1,104      (2,178)
Earnings (losses) in affiliates. . . . . . . . . . . . . . . .       409         606
Minority interest in income of consolidated
   subsidiaries  . . . . . . . . . . . . . . . . . . . . . . .      (249)       (242)
                                                                ---------  ----------
         Income (loss) before items shown
            below. . . . . . . . . . . . . . . . . . . . . . .     1,264      (1,814)
Extraordinary item, net of income tax benefit(2) . . . . . . .        --          --
                                                                ---------  ----------
         Net income (loss) . . . . . . . . . . . . . . . . . .  $  1,264   $  (1,814)
                                                                =========  ==========

Earnings (loss) per share before extraordinary
   item - basic and diluted. . . . . . . . . . . . . . . . . .  $   0.13   $   (0.18)
Earnings (loss) per share - basic and diluted. . . . . . . . .  $   0.13   $   (0.18)
Weighted average shares outstanding - basic and
   diluted . . . . . . . . . . . . . . . . . . . . . . . . . .    10,000      10,000

BALANCE SHEET DATA (END OF FISCAL YEAR):
Working capital. . . . . . . . . . . . . . . . . . . . . . . .  $ 32,134   $  33,370
Total assets . . . . . . . . . . . . . . . . . . . . . . . . .    92,749      70,935
Total borrowings . . . . . . . . . . . . . . . . . . . . . . .    21,703       7,398
Shareholders' equity . . . . . . . . . . . . . . . . . . . . .  $ 49,813   $  48,905
<FN>
________________________________
(1)  Restructuring  charges,  goodwill  and  asset  impairments  related  to the
     closing  or  idling  of  manufacturing  plants  and  restructuring  of  the
     Company's  retail  operations  in  fiscal  2000. Such changes increased the
     diluted  loss  per  share  by $0.81 for fiscal 2000. Restructuring charges,
     goodwill  and  asset  impairments  related  to  the  closing  or  idling of
     manufacturing  plants  and  non-core  retail  operations  in  fiscal  2001.
(2)  Extraordinary  gain  for  forgiveness  of  debt.
</TABLE>


                                       16
<PAGE>
ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

GENERAL

     American  Homestar is a regional vertically integrated manufactured housing
company  with  operations  in  manufacturing,  retailing,  home  transportation
services,  home financing and insurance. Our principal operations are located in
Texas,  although we also sell our products in neighboring states. We manufacture
a  wide  variety  of  manufactured  homes  from  two  of our three manufacturing
facilities.  The  third  manufacturing  facility  is  primarily  engaged  in
refurbishing  manufactured  homes  obtained  through  lender  repossessions.

     Our  products  are sold through 31 Company-operated retail sales centers in
Texas,  Louisiana  and  Oklahoma,  Company-operated  sales  offices  in  three
manufactured  housing  communities  in  Texas,  several developer-operated sales
centers in manufactured housing communities, and several independent dealers. In
addition,  we  facilitate  both  chattel  and land-home installment financing by
purchasers  of  manufactured  homes from our retail sales centers. We also offer
retail  customers  a  variety of insurance products, including property casualty
insurance,  credit  life  insurance  and extended warranty coverage through both
Company-operated retail sales centers and certain independent retailers. We also
offer  transportation  services  to  our  customers.

REORGANIZATION

     On  January  11,  2001,  American  Homestar  Corporation  and  21  of  our
subsidiaries filed separate voluntary petitions for reorganization under Chapter
11  of  the  United States Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Texas (the "Bankruptcy Court"). On August 14, 2001,
the  Bankruptcy  Court  confirmed the Third Amended Joint Plan of Reorganization
(the  "Plan")  of  the  Company  and  its  subsidiaries. On October 3, 2001 (the
"Effective  Date"),  all  conditions  required for the effectiveness of the Plan
were  met,  and  the Plan became effective, and the Company and our subsidiaries
emerged  from  bankruptcy.

SUMMARY  OF  PLAN

     Under  the terms of the Plan, we maintained our ongoing business operations
primarily  in  Texas, Louisiana and Oklahoma, and continued sales to independent
dealers  in  New  Mexico,  Arkansas  and  Colorado.  We  continued  to  use  our
manufacturing  facilities  in North Texas and to operate approximately 40 retail
store  operations.  Subsequent to our emergence from bankruptcy, we have reduced
the  number  of  retail  stores  we  operate  to  31  stores.  Moreover, through
affiliated  entities  that  were  not  subject  to  the  Plan,  we continued our
insurance,  financial  services  and  transportation  lines  of  business.

     Treatment  of  Equity. Under the terms of the Plan, all equity interests in
the  Company  were  cancelled  as  of  the  Effective  Date,  and all holders of
outstanding  shares  of  Company  stock,  which  had previously traded under the
symbols  HSTR  and  HSTRQ,  lost  all  rights  to equity interests in and to the
reorganized  Company.  Under the Plan, the Company has the authority to issue 15
million  shares of new Series C common stock and is required to issue 10 million
shares of Series C common stock to its general unsecured creditors.  Pursuant to
the  exemption  set  forth  in  Section 1145 of the Bankruptcy Code, the Company
issued  new shares of Series C common stock to persons holding allowed unsecured
claims  in  the Company's bankruptcy case and shares of Series M common stock to
management  under an incentive program. The Company has issued 10 million shares
of  Series  C  common stock and 100 shares of Series M common stock.  As of June
27,  2003, 4,869,250 shares of Series C common stock had been issued to specific
shareholders  with allowed claims and 5,130,750 shares were held in constructive
trust for the benefit of shareholders to be determined in name and amount as the
claims  process  is  completed.  Since June 27,  2003,  we have issued 1,111,114
additional  shares  of Series C common stock pursuant to the claims process, and
3,219,636  shares  of  the  10 million remain to be issued. We expect the claims
process  to  be  completed  by April 2004. The Company also has the authority to
issue  7.5  million shares of Series M common stock to management, 100 shares of
which  had been issued as of June 27, 2003 and 4,999,900 shares underlie options
authorized  under  the Company's 2001 Management Incentive Program.  Options for
4,899,900  shares  have  been approved and granted at an exercise price of $1.35
per  share.  These  options vest seven years from the date of grant and may vest
earlier  (up to 20% per year) if certain annual performance criteria established
by  the  Board  of  Directors  are met. As of June 27, 2003, options for 969,980
shares  of  Series  M  common  stock  have  vested.


                                       17
<PAGE>
     Treatment  of  Administrative  and Priority Claims (other than tax claims).
The  Bankruptcy  Code  sets  forth  various types of claims that are entitled to
priority  treatment.  These  priority claims include, among others, the costs of
administration  incurred during the bankruptcy case, certain consumer claims and
certain  employee  claims.  Under  the  terms  of the Plan, we paid the priority
claims  allowed  by  the  Bankruptcy  Code  in  cash  and  in  full.

     Tax Claims. The Bankruptcy Code allows certain tax claims to be paid over a
period  of  up to 72 months following the date of the assessment of those taxes.
The  Plan  authorizes  the Company and its subsidiaries to pay tax claims over a
period  of  up  to  60  months,  with  interest.

     Unsecured  Claims. Under the terms of the Plan, holders of unsecured claims
of  $10,000  or less were given varying options, depending upon the entity owing
the  unsecured  claim.  In general, most holders of such claims were entitled to
receive  a  small  payment  in cash (typically 10% or 20% of the amount of their
claim).  Certain  of  our affiliates have discontinued or will discontinue doing
business  with  us  under  the  terms  of  the Plan. Holders of unsecured claims
against  discontinued  entities  could  accept  a pro rata distribution once the
liquidation  value  of  the  subsidiary  is  determined. Very few creditors have
elected  this  option.  The typical holder of an allowed unsecured claim of more
than $10,000 will receive shares of our Series C common stock. We will issue the
shares  without  regard  to  which  of our subsidiaries actually owed the claim.

     Miscellaneous  Secured  Claims.  Under the terms of the Plan, we were given
the  option to return the collateral for secured claims or to pay secured claims
over  an  extended  period  of  time,  with  interest.

     Secured  Claims  by  Primary  Lender.  As part of the Plan, the Company and
several  of  its  subsidiaries entered into a new financing arrangement with our
principal  secured  lender.  The  arrangement  provided  for  substantial  debt
forgiveness  by the secured lender and for the extension of a 36-month revolving
credit  facility  by  the  secured  lender. The inventory credit line originally
provided  for  borrowings  up  to  a  maximum limit of $38 million, although the
available  amount  under  the  loan  varied based on various covenants and other
requirements. Maximum borrowings peaked at approximately $21 million.  Under the
financing  agreement,  all  net  cash  proceeds  from  the  sale or lease of the
Company's  idle facilities have been deposited into a restricted cash collateral
account, and those funds have been otherwise unavailable to the Company. In June
2003, we amended this inventory financing agreement with the lender to allow for
a  pay-down,  using  approximately  $5.7  million  held  by  the  lender  in the
restricted  cash  collateral account.  Proceeds from the future sale or lease of
idle facilities will also be available for further debt reduction, under certain
circumstances,  at  the  Company's  option.  As  part of this amendment, maximum
borrowings  under the inventory credit line were also voluntarily reduced to $12
million. The loan is secured by substantially all of the Company's inventory and
real  estate  and  by  certain  other  assets.  At  June  27,  2003  the  amount
outstanding  under  this  credit  facility  was  approximately  $6.8  million.

BASIS  OF  REPORTING

     Upon  our  emergence from bankruptcy protection in October 2001, we adopted
the  provisions  of  Statement  of  Position  No.  90-7, "Financial Reporting by
Entities  in Reorganization Under the Bankruptcy Code" ("Fresh-Start Reporting")
as promulgated by the AICPA. Accordingly, all of our assets and liabilities have
been  restated  to  reflect their reorganization value, which approximates their
fair  value  at  the  Effective  Date.  In addition, our accumulated deficit was
eliminated  and  our  capital  structure was recast in conformity with the Plan,
and,  as  of  September  29,  2001, we have recorded the effects of the Plan and
Fresh-Start  Reporting.  Activity  between  September  29, 2001, the date of the
Consolidated  Fresh-Start Balance Sheet, and October 3, 2001, the Effective Date
of  the  Plan  was  not  material.  The  adjustment to eliminate our accumulated
deficit  totaled $158 million, of which $139 million was forgiveness of debt and
$19  million  was  from  Fresh-Start  adjustments.

     The reorganization value of our common equity of approximately $30 million,
as  of  the  Effective  Date,  was  determined  by  an independent valuation and
financial specialist after consideration of several factors and by using various
valuation  methods,  including  appraisals,  cash flow multiples, price/earnings
ratios  and  other  relevant  industry  information.  We  have  allocated  our
reorganization  value  to  various  asset  categories  pursuant  to  Fresh-Start
accounting  principles.


                                       18
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND GENERAL

     The  consolidated  financial statements include the accounts of the Company
and  our  majority-owned subsidiaries. All significant intercompany balances and
transactions  have  been eliminated in consolidation. Certain amounts previously
reported have been reclassified to conform to the 2003 presentation. We also own
a  50% interest in two financing joint ventures (Homestar 21st, LLC and American
Homestar  Mortgage,  L.P.)  and  a  49.5% interest in Humble Springs LTD, a land
development  joint  venture,  which are accounted for under the equity method of
accounting.

     Our fiscal year ends on the Friday closest to June 30.

ACCOUNTING  ESTIMATES

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted in the United States requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  reported  amounts of revenues and expenses
during  the  period.  Actual  results  could  differ  from  those  estimates.

     Significant  estimates  were  made  to  determine  the  following  amounts
reflected  on  our  Balance  Sheets:

     -    Property  Plant  and  Equipment,  according  to  provisions  for
          "Fresh-Start" Reporting, were reflected at their estimated fair market
          value  at  September 29, 2001, and are reflected at cost for additions
          subsequent  to  September  29, 2001, less accumulated depreciation for
          the  period  subsequent  to  September  29, 2001. The determination of
          periodic  depreciation  expense  requires an estimate of the remaining
          useful  lives  of  each  asset.

     -    Assets  Held  For  Sale  are reflected at estimated fair market value.

     -    Warranty  Reserves  include an estimate of all future warranty-related
          service expenses that will be incurred as to all homes previously sold
          that  are still within their one-year warranty period. These estimates
          are  based on average historical warranty expense per home, applied to
          the  number  of  homes  that  are  still  under  warranty.

     -    Reserve for future repurchase losses reflects management's estimate of
          both  repurchase  frequency  and  severity  of  net  losses related to
          agreements  with  various  financial  institutions  and  other  credit
          sources  to repurchase manufacturing homes sold to independent dealers
          in  the event of a default by the independent dealer or its obligation
          to  such  credit  sources.  Such  estimates  are  based  on historical
          experience.

     -    Liquidation  and  Plan  Reserve  reflects management's estimate of all
          costs and expenses to be incurred in administering and satisfying plan
          obligations as well as the net cost to complete the liquidation of all
          non-core  operations.

     -    Claims  Reserve reflects management's estimate of the cash required to
          satisfy  all  remaining  priority, tax, administrative and convenience
          class  claims.  This  reserve  does  not include the remaining initial
          distribution  that is reflected in another liability account, has been
          escrowed,  and  is  not  subject  to  estimation.

REVENUE  RECOGNITION

     Retail sales are recognized once full cash payment is received and the home
has  been  delivered  to  the  customer.

     Manufacturing  sales  to independent dealers and subdivision developers are
recognized  as  revenue  when  the


                                       19
<PAGE>
following  criteria  are  met:

     -    there  is  a  firm  retail  commitment  from  the  dealer;
     -    there  is a financial commitment (e.g., an approved floor plan source,
          cash  or cashiers check received in advance or, in the case of certain
          subdivision  developers,  a  financial  commitment  acceptable  to
          management);
     -    the  home  is  completely  finished;
     -    the  home  is  invoiced;  and
     -    the  home  has  been  shipped.

     The  Company  also  maintains  used  manufactured  home  inventory owned by
outside parties and consigned to the Company, for which the Company recognizes a
sales  commission  when  received.

     Premiums  from  credit life insurance policies reinsured by our credit life
subsidiary,  Lifestar  Reinsurance, Ltd. ("Lifestar"), are recognized as revenue
over  the  life  of the policy term. Premiums are ceded to Lifestar on an earned
basis.  Lifestar  ceased  operations  in  May  2002.

     Agency  insurance commissions are recognized when received and acknowledged
by  the  underwriter  as  due.

     Transportation revenues are recognized after the service has been performed
and  invoiced  to  the  customer.

INVENTORIES

     Newly  manufactured  homes are valued at the lower of cost or market, using
the  specific  identification  method.  Used  manufactured  homes  are valued at
estimated wholesale prices, not in excess of net realizable value. Raw materials
are valued at the lower of cost or market, using the first-in, first-out method.

PROPERTY,  PLANT  AND  EQUIPMENT

     Property,  plant  and  equipment were reflected at management's estimate of
fair  market  value at September 29, 2001, as required by Fresh-Start Reporting.
Subsequent  to  September 29, 2001, additions are recorded at cost. Depreciation
on property, plant and equipment is recorded using the straight-line method over
the  estimated  useful  lives  of the related assets. Leasehold improvements are
amortized  using  the  straight-line  method  over  the  useful  lives  of  the
improvements  or lease periods, whichever is shorter. We have four manufacturing
plants  and several non-core retail sales centers that are not in operation that
are  classified  as  assets  held  for  sale  and  are reflected at management's
estimate  of  net  realizable  value.

     We  evaluate  the  recoverability of long-lived assets not held for sale by
measuring  the  carrying  value of the assets against the estimated undiscounted
future  cash  flows  in  accordance with SFAS No. 144, which superceded SFAS No.
121.  At  the  time  such evaluations indicate that the undiscounted future cash
flows  of  certain  long-lived assets are not sufficient to recover the carrying
value  of  such  assets,  we  adjust the carrying values of such assets to their
estimated  fair  values.  Estimated fair values are determined using the present
value  of  estimated  future  cash  flows.  In conjunction with the SFAS No. 121
analysis  performed  in  fiscal years 2000 and 2001, we recorded long-term asset
impairments of approximately $4.8 million in fiscal 2000 and approximately $38.8
million  in  fiscal  2001.

GOODWILL

     Goodwill, which represents the excess of purchase price over the fair value
of  net  assets  acquired,  was  amortized on a straight-line basis over periods
ranging  from  10  to  40  years.  We assessed the recoverability of goodwill by
determining  whether the amortization of the goodwill balance over the remaining
useful  life could be recovered through undiscounted future operating cash flows
of the acquired operations. Goodwill was adjusted to zero in connection with the
restatement  of  assets  and  liabilities  during  our  reorganization.

     In  June 2000,we evaluated the recoverability of long-lived assets not held
for  sale  by  measuring  the carrying value of the assets against the estimated
undiscounted future cash flows in accordance with SFAS No. 121. At the time such
evaluations  indicate  that  the  undiscounted  future  cash  flows  of  certain
long-lived  assets  are  not  sufficient  to  recover the carrying value of such
assets,  the  assets are adjusted to their estimated fair values. Estimated fair


                                       20
<PAGE>
values  are  determined  using the present value of estimated future cash flows.
In  conjunction with the SFAS No. 121 analysis performed in fiscal year 2001, we
recorded  goodwill  write-off  of  approximately  $63.9  million.

INCOME  TAXES

     Deferred  tax  assets  and  liabilities  are  recognized for the future tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the  years in which such temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets  and  liabilities of a change in tax rates is recognized in income in the
period  that  included the enactment date. Because of our recent reorganization,
all deferred tax assets (both short term and long term) have been fully reserved
as  their  realization  is  contingent  upon  future  taxable  income.

RESERVES FOR FUTURE LOSSES ON CREDIT SALES

     The Company makes a current provision for estimated future losses on credit
retail  sales  where  we  retain  risk  in  the  event of customer nonpayment of
installment sales contracts.  Typically, our period of exposure to loss does not
exceed  the  first  two  installment  payments  on  an individual contract.  The
amounts  provided  for  estimated  future  losses on credit sales are determined
based  on  our  historical loss experience after giving consideration to current
economic  conditions.  In  assessing  current  loss  experience  and  economic
conditions, management may adjust the reserve for losses on credit sales related
to  prior  years'  installment  sales contracts.  All adjustments are recognized
currently.

ACCRUED  WARRANTY  AND  SERVICE  COSTS

     We  make a current provision for future service costs associated with homes
sold  and  for  manufacturing  defects for a period of one year from the date of
retail  sale  of  the  home. The estimated cost of these items is accrued at the
time of sale and is reflected in cost of sales in the consolidated statements of
operations.  For  the year ended June 29, 2001, the three months ended September
29, 2001, the nine months ended June 28, 2002, and the year ended June 27, 2003,
warranty  and service costs were $ 10.6 million, $0.7 million, $2.0 million, and
$2.0  million  respectively.

EARNINGS  PER  SHARE

     Basic  earnings  per  share  is  based  on  the  weighted  average  shares
outstanding without any dilutive effects considered.  Diluted earnings per share
reflects  dilution  from  all  contingently  issuable  shares  from  outstanding
options.  Options  granted  under  the our 2001 Management Incentive Program are
not  reflected  in diluted earnings per share as there have been no sales and no
quoted bid and asked prices for our stock. Per share data for periods ended June
29,  2001,  and  September  29,  2001,  have  been omitted as the Company was in
bankruptcy  during  these  periods  and  the  amounts do not reflect the current
capital  structure.

FINANCIAL  INSTRUMENTS

     Fair  value estimates are made at discrete points in time based on relevant
market  information.  These  estimates  may  be subjective in nature and involve
uncertainties  and  matters  of  significant  judgment  and  therefore cannot be
determined  with precision.  We believe that the carrying amounts of our current
assets,  current  liabilities  and  long-term debt approximate the fair value of
such  items.

CASH  EQUIVALENTS

     Cash  equivalents  consist  of  short-term  investments  with  an  original
maturity of three months or less, money market accounts and cash in transit from
financial institutions.  Cash in transit from financial institutions presents no
risk  to  the  Company regarding collectibility and is typically received within
two  business  days  of  month  end.


                                       21
<PAGE>
CONCENTRATION  OF  CREDIT  RISK

     We  maintain cash in several bank accounts, which at times exceed federally
insured  limits.  We  monitor  the  financial  condition  of  the banks where we
maintain  accounts  and  we  have  experienced  no  losses associated with these
accounts.

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets."  SFAS No. 142 addresses financial accounting and reporting for acquired
goodwill  and  other  intangibles.  The  statement requires that goodwill not be
amortized  but  instead  be tested at least annually for impairment and expensed
against  earnings  when  the  implied  fair value of a reporting unit, including
goodwill,  is  less  than  its  carrying amount.  SFAS No. 142 was effective for
fiscal  years  beginning after December 15, 2001, and its adoption has not had a
material  impact  on  our  financial  condition  or  results  of  operations.

     In  June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the  associated  asset  retirement  costs.  SFAS 143 was effective for financial
statements  issued  for  fiscal  years  beginning  after  June 15, 2002, and its
adoption  has not had a material impact on our financial condition or results of
operations.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal of Long-Lived Assets." SFAS 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed Of," and the accounting and reporting provisions of APB Opinion No.
30,  "Reporting the Results of Operations Reporting the Effects of Disposal of a
Segment  of  a  Business,  and Extraordinary, Unusual and Infrequently Occurring
Events  and Transactions," as it relates to the accounting for the disposal of a
segment of a business (as previously defined in that Opinion). The provisions of
SFAS  144  were  effective  for  financial  statements  issued  for fiscal years
beginning  after  December  15,  2001,  and  its adoption has not had a material
impact  on  our  financial  condition  or  results  of  operations.

      In  May  2002, the FASB issued Statement of Financial Accounting Standards
No. 145 ("SFAS 145"), "Rescission of FASB Statements No. 4, 44 and 64, Amendment
of  FASB  Statement  No. 13, and Technical Corrections." This Statement rescinds
FASB  Statements  No. 4, Reporting Gains and Losses from Extinguishment of Debt,
and  an  amendment of Statement No. 4 and FASB Statement No. 64, Extinguishments
of  Debt Made to Satisfy Sinking-Fund Requirements. This Statement also rescinds
FASB  Statement No. 44, Accounting for Intangible Assets of Motor Carriers. This
Statement  amends  FASB Statement No. 13, Accounting for Leases, to eliminate an
inconsistency  between  the  required accounting for sale-leaseback transactions
and  the  required accounting for certain lease modifications that have economic
effects  that  are similar to sale-leaseback transactions. SFAS 145 is effective
for  fiscal  years  beginning after May 15, 2002, and its adoption has not had a
material impact on our financial condition or results of operations.

      In  June 2002, the FASB issued Statement of Financial Accounting Standards
No.  146  ("SFAS  146"),  "Accounting for Costs Associated with Exit or Disposal
Activities."  This  Statement  addresses  financial accounting and reporting for
costs  associated with exit or disposal activities and nullifies Emerging Issues
Task  Force  Issue  No.  94-3,  "Liability  Recognition  for  Certain  Employee
Termination  Benefits  and  Other  Costs  to Exit an Activity (including Certain
Costs  Incurred in a Restructuring)." SFAS 146 is effective for exit or disposal
activities  initiated  after December 31, 2002. We do not expect the adoption of
SFAS  146  will  have a material effect on our financial condition or results of
operations.

     In  December  2002,  the Financial Accounting Standards Board (FASB) issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 148, "Accounting for
Stock-Based  Compensation-Transition  and  Disclosure,"  which  amends SFAS 123,
"Accounting  for  Stock-Based  Compensation"  to  provide alternative methods of
transition  for  a voluntary change to the fair value based method of accounting
for  stock-based compensation. In addition, this statement amends the disclosure
requirements  of  SFAS  123  to require prominent disclosures in both annual and


                                       22
<PAGE>
interim  financial  statements  about  the  method of accounting for stock-based
employee  compensation and the effect of the method used on reported results. We
will continue to account for stock-based compensation using the intrinsic method
as  permitted  by  SFAS  123 and prominently disclose the additional information
required by SFAS 148 in our annual and interim reports.

     In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  (FIN) 46,
Consolidation  of  Variable  Interest  Entities.  This  interpretation  provides
guidance  on  the  identification  of,  and  financial  reporting  for, variable
interest  entities.  Variable  interest  entities  are  entities  that  lack the
characteristics of a controlling financial interest or lack sufficient equity to
finance its activities without additional subordinated financial support. FIN 46
requires  a company to consolidate a variable interest entity if that company is
obligated  to absorb the majority of the entity's expected losses or entitled to
receive  the  majority  of  the  entity's residual returns, or both. FIN 46 also
requires  disclosures  about  variable  interest  entities that a company is not
required to consolidate but in which it has a significant variable interest. FIN
46 is applicable immediately to variable interest entities created after January
31,  2003. For all variable interest entities created prior to February 1, 2003,
FIN  46 is applicable to periods beginning after June 15, 2003. We do not expect
that  the  adoption  of  FIN  46  will  have  a material effect on our financial
position  or  results  of  operation.

RESULTS  OF  OPERATIONS

     The  results  of  operations  and  cash  flows  for  the three months ended
September  29,  2001,  include  operations prior to the Company's emergence from
Chapter  11  proceedings and do not take into account the effects of Fresh-Start
Reporting.  The  results  of operations and cash flows for the nine months ended
June  28,  2002,  include  operations subsequent to the Company's emergence from
Chapter 11 proceedings and reflect the on-going effects of Fresh-Start Reporting
(the Company being referred to herein as "Predecessor Company" for periods prior
to  September  29,  2001,  and  as "Successor Company" for periods subsequent to
September  29,  2001). As a result, the results of operations and cash flows for
the  twelve  months  ended  June  27,  2003  for  the  Successor Company are not
comparable  to  the  results  of operations and cash flows for the twelve months
ended  June 28, 2002, as the earlier period includes three months of Predecessor
Company  operations  and  cash  flows,  which  do  not  reflect  the  effects of
Fresh-Start  Reporting, and nine months of Successor Company operations and cash
flows,  which  do  reflect  the  effects  of  Fresh-Start  Reporting.

     In  connection with our reorganization, we have significantly downsized our
operations  and  have focused on our core Southwest market, where the Company is
based  and where we have historically had our most favorable overall results. We
currently  operate  31  retail  sales  centers  and  three  sales  offices  in
manufactured  housing  communities,  along with a marketing presence (displaying
model  homes and spec homes without an on-site sales office) in approximately 34
manufactured  housing communities. We operate three manufacturing plants, two of
which produce new homes and the third is used to refurbish lender repossessions.
We  operate  an insurance agency, which sells homeowner's insurance, credit life
insurance  and  extended warranty coverage to our customers and, from March 1995
to  May 2002 operated a reinsurance company, which reinsured the credit life and
extended  warranty  policies  sold,  which allowed the Company to participate in
additional  homeowner  insurance  profits  in years where losses were lower than
expected.  We  have  a  51%  ownership  interest  in  a transport company, which
specializes  in  the  transportation  of  manufactured  homes, modular homes and
offices.  In customer finance, we have a 50% interest in a finance company which
specializes  in  providing  chattel  and  land/home  financing  to the Company's
customers and a 50% interest in a mortgage brokerage business which allows us to
better control the placement of our traditional mortgage business and to realize
a  portion of the net profits related to this business. Management believes that
its  vertical  integration  strategy, deriving multiple profit sources from each
retail sale, will allow the Company to be more successful, over time, than would
otherwise  be  the  case.

     Two  significant events have, in our opinion, had a dampening effect on new
home  sales  and  revenues  since January 2002. The withdrawal of several retail
lenders  from  the  national  market  has  had  the  effect of tightening credit
standards  applied  to  potential  new  home  buyers  and, at least temporarily,
reduced  total  potential  demand  for  new homes. Some previously qualified new
homebuyers  are  currently  able  to  purchase  lender repossessions but are not
currently  eligible  for  new home financing. In addition, Texas legislation (HB
1869) effective January 1, 2002, required any land/home package to be closed and
financed  in  a  fashion  nearly identical to traditional mortgage financing for
site-constructed  housing.  This  legislation  led  to  a  much  longer and more
complex  credit approval and


                                       23
<PAGE>
loan  closing cycle than existed prior to January 1, 2002. While this change did
not  necessarily  result  in  a lower overall demand for manufactured housing in
Texas,  it  had  the  effect  of  lengthening  the  sales  closing  and  revenue
recognition process from an average of 45-60 days to an average of more than 100
days.  As  a  result, management believed that the Company realized less revenue
during  the  six  months  ended June 28, 2002, and the year ended June 27, 2003,
than  would  have  otherwise  been  the  case without lender withdrawal from the
industry  and  the Texas law change. Effective June 18, 2003, SB 521 amended the
provisions  of HB 1869 to allow for chattel financing, at the owner's option, of
a manufactured home that is sited on land owned by the home owner. We believe SB
521  should  moderate  the  negative  impact on manufactured home sales in Texas
caused  by  HB  1869.  If  the  lending  environment  remains stable, management
believes  that  sales and revenues will gradually improve over current levels as
the  sales-in-process  mature toward the longer closing and completion cycle and
as  our  retail sales team adjusts to these new lender and industry dynamics. We
believe  that  most  of  our  competition  in our core market region experienced
similar market pressures and has reduced both retail and manufacturing capacity.
We  also believe that the Company is postured to take advantage of these changes
because  we  are  reorganized  and  no  longer  distracted  by the same relative
leverage  positions and operational challenges as much of our competition. While
we  believe  that  market  share  gains  will be gradual but steady, there is no
assurance  that  these  gains  will  materialize.

     The following table summarizes certain key sales statistics for the Company
for  the  periods  indicated:

<TABLE>
<CAPTION>
                                                                 YEAR      THREE MONTHS     NINE MONTHS      YEAR
                                                                ENDED          ENDED           ENDED        ENDED
                                                               JUNE 29,    SEPTEMBER 29,     JUNE 28,      JUNE 27,
                                                                 2001          2001            2002          2003
                                                              ----------  ---------------  -------------  ----------
                                                                    Predecessor Co.              Successor Co.
                                                              ---------------------------  -------------------------
<S>                                                           <C>         <C>              <C>            <C>
Company-manufactured new homes sold at retail. . . . . . . .      2,447              373            994         999
Total new homes sold at retail through retail sales centers.      2,499              373          1,001       1,010
Internalization rate (1) . . . . . . . . . . . . . . . . . .         98%             100%            99%         99%
Previously-owned homes sold at retail. . . . . . . . . . . .        964              149            555         564
Average retail selling price - new homes (HUD code). . . . .  $  54,823   $       51,403   $     53,584   $  55,230
Company-operated retail sales centers and community sales
   offices at end of period. . . . . . . . . . . . . . . . .         41               41             41          34
Total manufacturing shipments. . . . . . . . . . . . . . . .      3,656              343          1,176       1,248
Manufacturing shipments to independent retail sales centers
   and developers. . . . . . . . . . . . . . . . . . . . . .      1,832               51            162         330
<FN>
_______________________________
(1)  The  proportion  of  new homes manufactured by the Company that are sold by
     Company-operated  retail  sales  centers.
</TABLE>

     The  following table summarizes our historical operating results, expressed
as  a  percentage  of  total  revenues,  for  the  periods  indicated:

<TABLE>
<CAPTION>
                                                YEAR      THREE MONTHS   NINE MONTHS     YEAR
                                                ENDED        ENDED          ENDED        ENDED
                                              JUNE 29,   SEPTEMBER 29,     JUNE 28,    JUNE 27,
                                                2001          2001           2002        2003
                                              ---------  --------------  ------------  ---------
                                                    Predecessor Co.           Successor Co.
                                              -------------------------  -----------------------
<S>                                           <C>        <C>             <C>           <C>
Total revenues . . . . . . . . . . . . . . .     100.0%          100.0%        100.0%     100.0%
Gross profit . . . . . . . . . . . . . . . .      27.6%           38.7%         37.0%      30.7%
Selling, general and administrative expenses
      before acquisition costs . . . . . . .      32.2%           39.2%         34.7%      32.1%
Restructuring costs. . . . . . . . . . . . .      57.6%             --            --         --
Operating income . . . . . . . . . . . . . .    (62.2%)          (0.5%)          2.3%     (1.4)%
Income before income taxes and extraordinary
      item . . . . . . . . . . . . . . . . .    (67.7%)         (65.4%)          1.6%     (2.1)%
Income before extraordinary item . . . . . .    (74.1%)         (65.7%)          1.5%     (2.0)%
Net income . . . . . . . . . . . . . . . . .    (74.1%)          595.5%          1.5%     (2.0)%
</TABLE>


                                       24
<PAGE>
     Although  the  adoption  of  Fresh-Start  Reporting  significantly affected
comparability,  certain  Pre-  and Post-reorganization period income and expense
items  remain  comparable and are addressed in the following analysis of results
of  operations  for  the  periods  indicated.

NINE MONTHS ENDED JUNE 27, 2003 COMPARED TO NINE MONTHS ENDED JUNE 28, 2002

      Net Sales. Net sales of manufactured homes were $53.3 million for the nine
months  ended June 27, 2003, compared to $64.2 million for the nine months ended
June  28,  2002.  The  17% decline in net sales was principally as a result of a
decline  in  retail  sales, generally consistent with the overall decline in new
home  sales  in  Texas  and was partially offset by an increase in manufacturing
wholesale  shipments  to independent dealers and developers and sales of special
purchase  homes  by  Roadmasters.

     Retail  sales declined $15.3 million (or 26.3%). This decline was partially
attributable  to  the closing of 10 retail centers, however, new home same store
sales  in  the Company's core operations also declined 17% from an average of 24
new  home sales per store for the nine months ended June 28, 2002, to an average
of  20  new  home  sales  per  store for the nine months ended June 27, 2003. We
believe that Texas law (HB 1869) and the exit of major lenders from the industry
are major factors in the decline of new home same store and average sales in the
nine  months  ended  June  27,  2003.

     Manufacturing  division  sales  to  independent dealers and developers were
$9.6  million  in  the  nine months period ended June 27, 2003, compared to $6.4
million  in the nine month period ended June 28, 2002. For the nine months ended
June 28, 2002, substantially all sales were to independent dealers. For the nine
months  ended  June  27,  2003,  approximately  78%  of  manufacturing  division
shipments  were  to subdivision developers. We believe such sales to independent
dealers  and  especially  to subdivision developers will increase gradually over
time, aided by reductions of competitor capacity in our regional market area and
our  recent  emphasis  on  subdivision  developer  relationships  and  sales.

     Roadmasters, our transportation division, recorded manufactured homes sales
of  $1.0  million  for  the nine month period ended June 27, 2003. There were no
such  sales  in the nine months ended June 28, 2002. These sales resulted from a
bargain  purchase  of  distressed  manufactured  home  inventory  and the nearly
concurrent  sale  of  the  inventory  to  an  existing  Roadmasters'  customer.

     Other Revenues. Other revenues were $13.4 million for the nine months ended
June  27,  2003,  compared  to  $18.6 million for the nine months ended June 28,
2002.  Insurance-related  revenues  in  the  Company's  agency  and  reinsurance
operations  declined approximately $4.0 million (or 80%) as a result of Lifestar
Reinsurance  Ltd. ("Lifestar"), which had contributed approximately $3.8 million
in  revenues  for  the nine months ended June 28, 2002, but ceased operations in
May  2002.  Transportation  revenues  also decreased approximately $1.0 million.

     Total  Revenues.  Total  revenues,  the  individual components of which are
discussed  above,  were  $66.8  million  in the nine months ended June 27, 2003,
which  is  a  decline  of  $16 million (or 19%) when compared to the nine months
ended  June  28,  2002.

     Cost  of  Sales. Cost of sales was $46.3 million (or 69.4% of revenues) for
the  nine  months  ended  June  27,  2003,  compared to $52.2 million (or 63% of
revenues)  for the nine months ended June 28, 2002. The 6% increase as a percent
of  revenues  in cost of sales was partially attributable to Lifestar, which had
operations  in the prior year period, but ceased activity in May 2002. Excluding
Lifestar  revenues  for the nine months ended June 28, 2002, would have resulted
in a cost of sales of 66% versus the 63% reported for said period. The remaining
3%  increase  in  cost  of sales was the result of an increase in retail cost of
sales  partially  offset  by  lower cost of sales in the Company's manufacturing
operation.

     Cost of sales for homes sold at retail, expressed as a percentage of retail
revenues,  increased  2.3%  for the nine months ended June 27, 2003, compared to
the nine months ended June 28, 2002. Cost of sales in the nine months ended June
28,  2002,  were lower as a result of a higher proportionate sales of discounted
inventory  (both  new  and used), which we were was able to purchase on the open
market  as  well  as  from  its  secured  lender  as  a  part  of  our


                                       25
<PAGE>
reorganization.

     Cost  of  sales  for  homes  sold  to  independent  dealers and subdivision
developers,  expressed as a percentage of manufacturing revenues, decreased 0.5%
in  the  nine months ended June 27, 2003, compared to the nine months ended June
28,  2002,  primarily  as  a  result  of  lower  material  costs.

     Cost  of sales for our transportation operations, expressed as a percentage
of  transportation  revenues,  were  approximately  the same for the nine months
ended  June  27,  2003,  and  June  28,  2003.

     Selling,  General  and  Administrative  Expenses.  Selling,  general  and
administrative  expenses  were  $21.6  million  (or 32% of revenues) in the nine
months  ended  June  27, 2003, compared to $28.7 million (or 35% of revenues) in
the nine months ended June 28, 2002. The decrease is related to costs associated
with  Lifestar,  which  ceased  activities  in May 2002, and to reduced variable
expenses as a result of lower retail sales and to reduced fixed expenses through
the consolidation and reduction of under-performing retail sales centers.

     Interest  Expense.  Interest  expense  was $0.7 million for the nine months
ended June 27, 2003, and $0.8 for the nine months ended June 28, 2002.

     Income  Taxes.  Income tax expense was $0.1 million (on pretax loss of $1.6
million) for the nine months ended June 27, 2003, compared to $0.2 million (on a
pretax  income  of  $1.4  million)  for the nine months ended June 28, 2002. Tax
expense  in  both  periods  relates  to taxes attributable to our transportation
operation,  which  files  tax  returns  separately from our consolidated return.

     Earnings in affiliates. Our 50% share in the after-tax earnings of Homestar
21, LLC and American Homestar Mortgage, L.P. were $0.4 million and $0.1 million,
respectively,  for the nine months ended June 27, 2003, compared to $0.4 million
for  the  nine  months  ended  June  28,  2002, all generated by Homestar 21, as
American  Homestar  Mortgage  did  not  begin  operations  until  November 2002.

     Minority  Interests.  We  own  51%  of  our  transportation  operations and
therefore  consolidate (or include 100% of) the transportation company's results
in our financial statements. Because we only benefit from 51% of the income, the
remaining 49% is shown as a deduction on our consolidated income statement. This
deduction  was  $0.1  for  the nine months ended June 27, 2003, compared to $0.2
million  for  the  nine  months  ended  June  28,  2002.

YEAR ENDED JUNE 27, 2003 COMPARED TO YEAR ENDED JUNE 28, 2002

      Net Sales. Net sales of manufactured homes were $71.8 million for the year
ended June 27, 2003, compared to $85.3 million for the year ended June 28, 2002.
The  16%  decline in net sales was principally the result of a decline in retail
sales, generally consistent with the overall decline in new home sales in Texas.
The decline in retail sales was partially offset by an increase in manufacturing
wholesale  shipments  to independent dealers and developers and sales of special
purchase  homes  by  Roadmasters.

     Retail  sales  declined  $17.8 million (or 23%). This decline was partially
attributable  to  the  closing  of  10 underperforming retail centers during the
year,  however,  new  home same store sales in our core operations also declined
22%  from  an average of 36 new home sales per store for the year ended June 28,
2002,  to  an average of 28 new home sales per store for the year ended June 27,
2003. We believe that Texas law (HB 1869) and the exit of major lenders from the
industry  are  major  factors  in the decline of new home same store and average
sales  in  the  year  ended  June  27,  2003.

     Manufacturing  division  sales  to  independent dealers and developers were
$11.6 million for the year ended June 27, 2003, compared to $8.4 million for the
year  ended  June  28, 2002. For the year June 28, 2002, substantially all sales
were to independent dealers. For the year ended June 27, 2003, approximately 77%
of  manufacturing division sales were to subdivision developers. We believe such
sales  to  independent  dealers  and  especially  to subdivision developers will
increase  gradually over time, aided by reductions of competitor capacity in our
regional  market  area  and  our  recent  emphasis  on  subdivision  developer
relationships  and  sales.


                                       26
<PAGE>
     Roadmasters,  the  Company's transportation division, recorded manufactured
homes sales of $1.0 million for the year ended June 27, 2003. There were no such
sales  in  the  year  ended  June  28, 2002. These sales resulted from a bargain
purchase  of  distressed  manufactured  home inventory and the nearly concurrent
sale  of  the  inventory  to  an  existing  Roadmasters'  customer.

     Other  Revenues.  Other revenues were $20.3 million for the year ended June
27,  2003,  compared  to  $23.7  million  for  the  year  ended  June  28, 2002.
Insurance-related  revenues  in  our  agency and reinsurance operations declined
approximately  $6  million  (or  70%)  as  a result of Lifestar Reinsurance Ltd.
("Lifestar"),  which  contributed approximately $5.8 million in revenues for the
year  ended  June 28, 2002, but which ceased operations in May 2002. The decline
in  insurance  revenues was partially offset by a $2.5 million (or 18%) increase
in  transportation revenues. Our transportation group expanded its operations to
include  commercial  transportation  business  (such as temporary classrooms and
construction  offices)  and  ancillary  services (such as on-site installation).

     Total  Revenues.  Total  revenues,  the  individual components of which are
discussed  above, were $92.1 million in the year ended June 27, 2003, which is a
decline  of  $16.9  million  (or  16%)  when  compared  to  the  prior  year.

     Cost of Sales. Cost of sales was $63.9 million (or 69% of revenues) for the
year ended June 27, 2003, compared to $68.3 million (or 63% of revenues) for the
year  ended June 28, 2002. The 6% increase (as a percent of revenues) in cost of
sales  was partially attributable to Lifestar, which had operations in the prior
year  period, but which ceased activity in May 2002. Excluding Lifestar revenues
for  the  twelve  months  ended  June 28, 2002, would have resulted in a cost of
sales  of 66% versus the 63% reported for said period. The remaining 3% increase
in  cost  of  sales was the result of an increase in retail cost of sales, which
increase  was  partially  offset  by  lower  cost  of sales in our manufacturing
operation.

     Cost of sales for homes sold at retail (expressed as a percentage of retail
revenues)  increased  2%  for the year ended June 27, 2003, compared to the year
ended  June  28, 2002. Cost of sales in the year ended June 28, 2002, were lower
as  a  result  of a higher proportionate sales of discounted inventory (both new
and used), which we were able to purchase on the open market as well as from our
secured  lender  as  a  part  of  our  reorganization.

     Cost  of  sales  for  homes  sold  to  independent  dealers and subdivision
developers  (expressed as a percentage of manufacturing revenues) decreased 1.3%
in  the  year  ended  June  27,  2003, compared to the year ended June 28, 2002,
primarily  as  a  result  of  lower  material  costs  in  the  current  period.

     Cost  of sales for our transportation operations (expressed as a percentage
of  transportation  revenues) were unchanged in the year ended June 27, 2003, as
compared  to  the  prior  year  period.

     Selling,  General  and  Administrative  Expenses.  Selling,  general  and
administrative  expenses  were  $29.6  million (or 32% of revenues) for the year
ended June 27, 2003, compared to $39.0 million (or 36% of revenues) for the year
ended  June 28, 2002. The decrease is related to costs associated with Lifestar,
which ceased activities in May 2002, and to reduced variable selling expenses as
a  result  of  lower  retail  sales  and  to  reduced fixed expenses through the
consolidation  and  reduction  of  under-performing  retail  sales  centers.

     Interest Expense. Interest expense was $1.0 million for the year ended June
27,  2003,  compared  to  $1.0  million  for  the  year  ended  June  28,  2002.

     Reorganization  Costs.  In  connection  with  our  Chapter  11  filing,
reorganization costs of $1.4 million were incurred during the three months ended
September 29, 2001. These costs related primarily to professional fees and other
expenditures  directly  related  to  the  Chapter  11 proceedings. There were no
reorganization  costs  for  the nine month period ended June 28, 2002, or in the
year  ended  June  27,  2003.

     Income  Taxes.  Income tax expense was $0.3 million (on pretax loss of $1.9
million) for the year ended June 27, 2003, compared to $0.3 million (on a pretax
income  of  $18.5 million) for the year ended June 28, 2002. Tax expense in both
periods  relates  to  taxes  attributable to our transportation operation, which
files  tax  returns  separately  from  our  consolidated  return.


                                       27
<PAGE>
     Earnings in affiliates. Our 50% share in the after-tax earnings of Homestar
21, LLC and American Homestar Mortgage, L.P. were $0.5 million and $0.1 million,
respectively, for the year ended June 27, 2003, compared to $0.6 million for the
year  ended  June  28,  2002, all generated by Homestar 21, as American Homestar
Mortgage  did  not  begin  operations  until  November  2002.

     Minority  Interests.  We  own  51%  of  our  transportation  operations and
therefore  consolidate (or include 100% of) the transportation company's results
in our financial statements. Because we only benefit from 51% of the income, the
remaining 49% is shown as a deduction on our consolidated income statement. This
deduction  was  $0.2  million for the year ended June 27, 2003, compared to $0.3
million  for  the year ended June 28, 2002. The decreased deduction for minority
interests  resulted  from decreased profits in the current period as compared to
the  prior  year  period  in  our  transportation  operations.

NINE MONTHS ENDED JUNE 28, 2002 COMPARED TO NINE MONTHS ENDED JUNE 29, 2001

      Net Sales. Net sales of manufactured homes were $64.2 million for the nine
months ended June 28, 2002, compared to $102.9 million for the nine months ended
June  29,  2001.  The  38%  decline  in sales was attributable to the following:

     Retail  sales  declined $14.1 million (or 15% in units and 20% in dollars).
New  home  same  store  sales  in  our core operations also declined 14% from an
average  of 28 new home sales per store for the nine months ended June 29, 2001,
to  an average of 24 new home sales per store for the nine months ended June 28,
2002.  Management believes that the Texas law changes in financing brought about
by Texas HB 1869 and the exit of three retail lenders to the industry were major
factors  in  the  decline  of  new home same store and average sales in the nine
months  ended  June  28, 2002. The remainder of the decline in new home sales is
attributable  to  our  reorganization  and  downsizing,  which resulted in fewer
average  Company  stores  in  the  current period than in the comparable period.

     Manufacturing  division  sales  to independent dealers were $6.4 million in
the  nine  months  ended  June  28,  2002, compared to $31.0 million in the nine
months  ended June 29, 2001, a decline of 79%.  This significant decline was the
result  of two principal factors related to our reorganization. One factor was a
reduction  in  average  number of new home manufacturing facilities in operation
(two  in  the  nine  months  ended  June 28, 2002, compared to seven in the nine
months  ended June 29, 2001).  The other factor was a reduction in the number of
independent  dealers  purchasing  our  products.  There  were  very few sales to
independent dealers during our reorganization (from January 2001 through October
2001).  Since  we  emerged  from  reorganization  in  October  2001,  we  have
re-established  relationships  with  industry  floor  plan lenders, and sales to
independent  dealers  and  subdivision  developers  have  grown  slowly.

     Other Revenues. Other revenues were $18.6 million for the nine months ended
June  28,  2002,  compared  to  $18.6 million for the nine months ended June 29,
2001.  Insurance-related  revenues  in  our  agency  and  reinsurance operations
declined  approximately  $6.7  million  (or 51%) primarily due to the decline in
retail  sales  and continuing lender restrictions as to the amounts of insurance
they  will  finance  on  each  home  sale. The decline in insurance revenues was
offset  by a $6.7 million (or 123%) increase in transportation revenues.  During
the  nine  months  ended  June 28, 2002, our transportation group expanded their
operations  to  include  commercial  transportation  business (such as temporary
classrooms  and  construction  offices)  and ancillary services (such as on-site
installation).

     Cost of Sales. Cost of sales was $52.2 million (or 63% of revenues) for the
nine  months ended June 28, 2002, compared to $86.2 million (or 71% of revenues)
for  the  nine  months ended June 29, 2001.  The 40% decline in dollar amount of
cost  of  sales  is  largely  attributable to the 32% decline in total revenues.

     Cost  of  sales  (expressed  as  a  percentage  of  revenues) in our retail
division  declined  nearly  5% for the nine months ended June 28, 2002. The most
significant  factor  in  the  decline  was our exit from all non-core markets by
mid-fiscal  year  2001. Margins in the non-core markets were substantially lower
than in our core market area. Approximately 14% of total retail sales during the
nine  months  ended June 29, 2001, were from non-core markets, while no non-core
sales  are reflected for the nine months ended June 28, 2002.  The second factor
in  the decline was higher proportionate sales of discounted inventory (both new
and  used),  which  we were able to purchase on the open market, as well as from
our  secured  lender  as  part  of  our  reorganization.


                                       28
<PAGE>
     Cost  of sales (expressed as a percentage of revenues) in our manufacturing
division declined nearly 8% in the nine months ended June 28, 2002. This decline
was  primarily  attributable  to  greater  manufacturing  efficiencies  and  the
restoration  of  raw  material  purchase  terms and discounts in the nine months
ended June 28, 2002.  Terms, discounts and efficiencies were negatively affected
beginning  in  mid-fiscal  2001,  while  we  were  undergoing  reorganization.

     Cost  of  sales  (expressed  as  a  percentage  of  revenues)  were largely
unchanged  in  our  transportation  operations in the nine months ended June 28,
2002.

     Selling,  General  and  Administrative  Expenses.  Selling,  general  and
administrative  expenses  were  $28.7  million  (or 35% of revenues) in the nine
months  ended  June  28, 2002, compared to $43.2 million (or 36% of revenues) in
the nine months ended June 29, 2001.  These expenses declined principally as the
result  of  a  decline  in revenues. The less than proportionate decline in SG&A
expenses  between  the  periods  is  due  to  the fact that fixed costs were not
reduced  at  the  same  short-term  rate  as  the  decline  in  revenues.

     Restructuring Changes. There were no restructuring changes in the last nine
months  of  fiscal  2002  compared  to $138.7 million in the last nine months of
fiscal  2001. These costs related to asset revaluations (goodwill write-offs and
adjustment  of  carrying value to other assets to net realizable value), as well
as  costs  associated  with  idling  and  closing  manufacturing  facilities and
non-core  retail  centers.

     Interest  Expense.  Interest  expense  was $0.8 million for the nine months
ended June 28, 2002, compared to $6.2 million for the nine months ended June 29,
2001.  Lower  interest  expense  in  the  current  period  was  the  result  of
substantially  lower average debt levels in the nine months ended June 28, 2002,
than  in  for the nine months ended June 28, 2002, due to our reorganization and
attendant  debt  conversion  to equity, as well as slightly lower prevailing and
average  interest  rates.

     Reorganization  Costs.  In  connection  with  our  Chapter  11  filing,
reorganization  costs  of  $2.8  million were incurred for the nine months ended
June  29,  2001.  These costs related primarily to professional fees and similar
type  expenditures directly related to the Chapter 11 proceedings. No such costs
were  incurred  in  the  nine  months  ended  June  28,  2002.

     Income Taxes. Income tax expense was $0.2 million (on pretax income of $1.4
million)  for the nine months ended June 28, 2002, compared to $16.0 million (on
a  pretax loss of  $154.8 million) for the nine months ended June 29, 2001.  Tax
expense  in  the  current  period  relates  to  taxes  attributable  to  our
transportation  and reinsurance operations that file returns separately from our
consolidated  return.  The  tax expense for the nine months ended June 29, 2001,
consists  primarily  of  a valuation allowance to fully reserve the deferred tax
assets  arising  in  prior years.  The remainder of the tax expense for the nine
months  ended  June  29,  2001,  relates  to  our transportation and reinsurance
operations  as  described  above.

     Earnings in affiliates. Our 50% share in the after-tax earnings of Homestar
21,  LLC  were $0.4 million for the nine months ended June 28, 2002, compared to
$0.7  million  for  the nine months ended June 29, 2001. The reduction in income
was  primarily  the  result  of  fewer  loan originations from diminished retail
volume.

     Minority  Interests.  We  own  51%  of  our  transportation  operations and
therefore  consolidate (or include 100% of) the transportation company's results
in our financial statements. Because we only benefit from 51% of the income, the
remaining 49% is shown as a deduction on our consolidated income statement. This
deduction  was $0.2 million for the nine months ended June 28, 2002, compared to
a  negative  deduction (add-back) of $0.2 million for the nine months ended June
29, 2001.  The negative deduction for the nine months ended June 29, 2001, arose
as  a  result  of  a  loss  in the transportation company, which was restored to
profitability  in  for  the  nine  months  ended  June  28,  2002.

YEAR ENDED JUNE 28, 2002 COMPARED TO JUNE 29, 2001

     Net  Sales. Net sales of manufactured homes were $85.3 million for the year
ended  June  28,  2002,  compared  to


                                       29
<PAGE>
$217.4  million  for  the year ended June 29, 2001. The 61% decline in sales was
primarily  attributable  to  our  reorganization  and  downsizing  including  a
significant  reduction  in  the  average  number  of  Company  sales centers and
manufacturing  facilities.

     Retail  sales  declined  $63.5 million (or 40% in units and 45% in dollars)
due  primarily  to  a  proportionate  reduction  in the average number of retail
stores  operating  for  the year ended June 28, 2002, compared to the year ended
June  29,  2001.  Same  store  sales  of  new  homes in our core operations also
declined  19%  from  an average of 42 new home sales per store in the year ended
June  29,  2001,  to an average of 34 new home sales per store in the year ended
June  28,  2002.  Management  believes  that  the Texas law changes in financing
brought  about  by Texas HB 1869, beginning in January 2002, as well as the exit
of  three  major retail lenders to the industry, were significant factors in our
same  store  sales  decline.

     Manufacturing  division  sales to independent dealers were $8.4 million for
the  year ended June 28, 2002, compared to $76.9 million for the year ended June
29,  2001,  a  decline  of  89%.  This significant decline was the result of two
principal factors related to our reorganization. One factor was the reduction in
average  number of manufacturing facilities in operation (two for the year ended
June  28,  2002, compared to seven for the year ended June 29, 2001).  The other
factor  was  a  reduction  in  the  number of independent dealers purchasing our
products.  There  were  very  few  sales  to  independent  dealers  during  our
reorganization  (from  January 2001 through October 2001). Since we emerged from
reorganization  in  October  2001,  we  have  re-established  relationships with
industry  floor  plan  lenders  and sales to independent dealers and subdivision
developers  have  grown  slowly.

     Other  Revenues.  Other revenues were $23.7 million for the year ended June
28,  2002,  compared  to  $24.4  million  for  the  year  ended  June  29, 2001.
Insurance-related  revenues  in  our  agency and reinsurance operations declined
approximately  $7.3  million (or 45%) primarily due to the similar proportionate
decline  in retail sales and continuing lender restrictions as to the amounts of
insurance they will finance on each home sale. The decline in insurance revenues
was  largely  offset  by  a  $6.7  million  (or  86%) increase in transportation
revenues.  During  for  the  year  ended June 28, 2002, our transportation group
expanded their operations to include commercial transportation business (such as
temporary  classrooms  and construction offices) and ancillary services (such as
on-site  installation).

     Cost of Sales. Cost of sales was $68.3 million (or 63% of revenues) for the
year  ended  June  28, 2002, compared to $175.0 million (or 72% of revenues) for
the year ended June 29, 2001.  The 61% decline in dollar amount of cost of sales
is  largely  attributable to the 55% decline in total revenues.  The improvement
in cost of sales (expressed as a percentage of revenues) is due to the following
factors:

     Cost  of  sales  (expressed  as  a  percentage  of  revenues) in our retail
division  declined  approximately  4% primarily as a result of our exit from all
non-core  markets  (especially  in the Carolinas) where lower margins prevailed.
This  non-core business represented 14% of total retail sales for the year ended
June  29,  2001,  while  retail sales for the year ended June 28, 2002, were all
from  our  core  market  areas. Another factor was higher proportionate sales of
discounted  inventory (both new and used), which we were able to purchase on the
open  market,  as well as from our secured lender as part of our reorganization.

     Cost  of sales (expressed as a percentage of revenues) in our manufacturing
division  also declined more than 3%. This decline was primarily attributable to
greater manufacturing labor and material efficiencies and the restoration of raw
material  purchase  terms  and  discounts  during  the year ended June 28, 2002.
Terms,  discounts  and efficiencies were dramatically affected in the year ended
June  29,  2001,  as  the  result  of  our reorganization. We also implemented a
general  price increase in February 2002, our first price increase since January
2001.

     Cost  of  sales  (expressed  as  a  percentage  of  revenues)  were largely
unchanged  in  the  Company's transportation and insurance agency operations and
were  down  slightly in our reinsurance operations, principally as the result of
slightly  lower  claims  for  the  year  ended  June  28,  2002.

     Selling,  General  and  Administrative  Expenses.  Selling,  general  and
administrative  expenses  were  $39.0  million (or 36% of revenues) for the year
ended June 28, 2002, compared to $77.9 million (or 32% of revenues) for the year
ended  June  29, 2001.  These expenses declined principally as the result of the
decline  in  revenues.  During our reorganization, a substantial number of sales
centers  and  manufacturing  operations  were  closed  or  sold  to  others,


                                       30
<PAGE>
giving  rise  to  substantial reductions in fixed operating costs such as wages,
benefits,  rents,  utilities  and  property  taxes.

     Restructuring  Charges.  There  were  no restructuring charges for the year
ended  June  28,  2002,  compared  to $139.2 million for the year ended June 29,
2001.  These  costs  related  to  asset  revaluations  (goodwill  write offs and
adjustment of carrying value of other assets to net realizable value) as well as
costs  associated  with idling and closing manufacturing facilities and non-core
retail  centers.

     Interest Expense. Interest expense was $1.0 million for the year ended June
28,  2002,  compared  to  $11.2 million for the year ended June 29, 2001. As the
result  of  our  reorganization, interest expense on a substantial amount of our
debt  ceased  in mid-fiscal 2001. Lower interest expense for the year ended June
28,  2002,  was  the  result  of  substantially lower average debt levels ($80.5
million  in fiscal 2002, as compared to $173.8 million in fiscal 2001) and lower
prevailing  and  average  interest  rates  for  the year ended June 28, 2002, as
compared  to  the  year  ended  June  29,  2001.

     Reorganization  Costs.  In  connection  with  our  Chapter  11  filing,
reorganization  and  impairment  costs  of  $2.8  million  and $1.4 million were
incurred  during  the years ended June 29, 2001 and June 28, 2002, respectively.
These costs related primarily to professional fees and similar type expenditures
directly  related  to  the  Chapter  11  proceedings.

     Income  Taxes.  Income  tax  expense  for the year ended June 28, 2002, was
$0.3  million  on  pretax  loss (before Fresh-Start adjustments) of $0.3 million
compared  to  tax  expense of $16.2 million on pretax losses of $164 million for
the  year  ended  June  29,  2001.  The  tax  expense  in  the current period is
attributable  to our transportation and reinsurance operations whose tax returns
are not included in our consolidated tax returns. The most significant source of
the  2001  tax  expense  was  the  provision of a full ($15.8 million) valuation
allowance  against  our  deferred  tax  assets  that arose in prior periods. The
remainder  of  the tax expense for the year ended June 29, 2001 was attributable
to  our  transportation  and  reinsurance  operations  described  above.

     Earnings in Affiliates. Our 50% share in the after-tax earnings of Homestar
21,  LLC  was  $0.6  million  for the year ended June 28, 2002, compared to $0.5
million  for  the  year  ended  June  29,  2001.

     Minority  Interests.  We  own  51%  of  our  transportation  operations and
therefore  consolidate (or include 100% of) the transportation company's results
in our financial statements. Because we only benefit from 51% of the income, the
remaining 49% is shown as a deduction on our consolidated income statement. This
deduction  was  $0.3  million  for  the  year ended June 28, 2002, compared to a
negative  deduction (add-back) of $0.1 million for the year ended June 29, 2001.
The  negative deduction for the year ended June 29, 2001, arose as a result of a
loss  in the transportation company, which was restored to profitability for the
year  ended  June  28,  2002.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  June  27,  2003,  we  had  operating cash and cash equivalents of $14.9
million (cash - reserved for claims of $4.3 million, and restricted cash of $0.6
million).  The  reserved cash balance was for payment of an initial distribution
to  shareholders  and  management's  estimate  of cash required to pay remaining
claims  under  the  Plan.  The restricted cash represents $0.6 million held in a
cash  collateral  account,  which  secures  the  Company's  floor  plan  through
Associates  Housing  Financial  LLC  ("Associates").

     During  the  year  ended  June  27,  2003, we used $9.7 million in cash for
operating  activities.  Of  the  $9.7  million,  $1.8  million  was used to fund
operating losses, $3 million was invested in inventory, $2.5 million was used to
reduce  general  liabilities,  and  $2.4  million  was  used to pay various plan
obligations  stemming  from our reorganization in 2001. The inventory investment
of  $3  million  relates  to  the  closing of 11 under-performing retail centers
during  the  year.  Management  elected  to move the inventory from those retail
centers  directly to various manufactured housing subdivisions in and around our
major  metropolitan  market areas and to make the inventory ready for sale. That
initiative  required  us  to  invest  in  the  installation  and  various  site
improvements  before  a  sale  actually  occurred; however, it also allows us to
avoid  the  unnecessary  cost  of  movement  to another retail center and then a
second  movement  to  a  homesite.  This initiative also provided us with a wide
selection  of  ready-for-sale


                                       31
<PAGE>
homes  to augment the display models on our retail centers. The actual number of
new  homes  in  inventory  declined  by  50  homes during the year; however, our
investment  in  inventory  increased,  at  least  temporarily, until we sell the
excess  inventory  to  homebuyers.

     During  fiscal 2003, we also used cash to make substantial debt reductions.
Our  inventory-related  (floor plan) debt declined $13.9 million during the year
and other debt (principally real estate-related) was reduced by $0.4 million. Of
the  $13.9 million used to reduce our floorplan debt, $5.7 million was withdrawn
from a restricted cash collateral account, otherwise unavailable to the Company,
and the balance of $8.2 million came from unrestricted operating cash.

     We  generated  $1.1 million from investing activities, principally from the
sale of idle assets we planned to sell as part of our reorganization.

     Under  the floor plan credit facility with Associates, our inventory credit
line  originally  provided  for borrowings up to a maximum limit of $38 million,
although  the  available  amount  under  the  facility  varied  based on various
covenants and other requirements. Maximum borrowings peaked at approximately $21
million.  In  June  2003, we amended this inventory financing agreement with the
lender  to  allow  for  a pay-down, using approximately $5.7 million held by the
lender  in  a restricted cash collateral account. Under the financing agreement,
all  net  cash  proceeds from the sale or lease of the Company's idle facilities
have  been  deposited into the cash collateral account and those funds have been
otherwise unavailable to the Company. At June 27, 2003, management estimated the
fair  market  value  of  the  remaining idle facilities to be approximately $3.4
million.  The Company has reported these assets as "Assets held for sale" and is
actively  seeking  to sell or lease these properties. Net cash proceeds, if any,
resulting  from  the  sale or lease of these properties will be deposited in the
restricted  cash  collateral  account and will therefore be available for future
debt  reduction  at  the  Company's  option.  As part of this amendment, maximum
borrowings  under the inventory credit line were also voluntarily reduced to $12
million. The loan is secured by substantially all of the Company's inventory and
real  estate  and  by  certain other assets. The line is contractually committed
until  October  2,  2004.  The  balance  outstanding  at  June  27,  2003  was
approximately  $6.8  million.  Subsequent  to  year-end,  the  Company  made  an
additional pay-down from the cash collateral account and plans to make others as
cash  collateral is available. The line carries an annual interest rate of prime
plus  1%. Management believes that this floor plan credit facility is sufficient
to  meet  the  inventory  financing  needs  of  the  Company until October 2004.
Management  is  exploring  alternatives  to  this  line  of  credit and plans on
securing  new  lines  of  credit  before  October  2004.

     Under the Plan, the Company was required to make an initial distribution to
its  new  shareholders  of  approximately  $5.3  million.  Distributions  of
approximately $2.1 million and $0.5 million were made in April 2002 and December
2002.  At  June 27, 2003 approximately $2.8 million in escrow for the balance of
the  distribution.  In  July  2003,  a  third distribution of approximately $1.0
million  was  made.

     In  accordance with customary business practice in the manufactured housing
industry,  we  have  entered  into  repurchase agreements with various financial
institutions  and  other  credit sources pursuant to which we have agreed, under
certain  circumstances,  to  repurchase  manufactured  homes sold to independent
dealers in the event of a default by such independent dealer on their obligation
to such credit sources.  Under the terms of such repurchase agreements, we agree
to  repurchase  manufactured  homes  at declining prices over the periods of the
agreements  (which  generally  range  from  18  to 24 months).  While repurchase
activity  is  very  sporadic  and cyclical, the Company provides for anticipated
repurchase  losses.  At  June  27,  2003,  the Company was at risk to repurchase
approximately  $1.2 million of manufactured homes and has provided for estimated
net  repurchase  losses  of  approximately  $0.2  million.

     We  believe  that  our  current  cash  position and expected cash flow from
operations  and  the  liquidation of excess inventory, along with our floor plan
facility,  will  be  sufficient  to  support  our  cash  and  working  capital
requirements  for  the  foreseeable  future.

OFF-BALANCE  SHEET  ARRANGEMENTS

     We have not participated in any off-balance sheet arrangements.


                                       32
<PAGE>
INFLATION  AND  SEASONALITY

     Inflation  in  recent  years has been modest and has primarily affected our
manufacturing costs in the areas of labor, manufacturing overhead, raw materials
other  than  lumber  and certain petroleum-based materials.  The price of lumber
and  certain  petroleum-based  materials  are  affected  more  by the imbalances
between  supply  and demand than by inflation.  Historically, we believe we have
been  able to minimize the effects of inflation by increasing the selling prices
of  our  products,  improving  our  manufacturing  efficiency and increasing our
employee  productivity.  In  addition,  our  business  is seasonal, with weakest
demand  typically  from  mid-November  through February and the strongest demand
typically  from  March  through  mid-November. Over the history of the Company's
operations,  management  has  not observed any correlation between interest rate
fluctuations  and  increases  or  decreases  in  sales  based  solely  on  such
fluctuations.

CONTRACTUAL  OBLIGATIONS

     The  following  table summarizes the Company's long-term debt and operating
leases  at  June  27,  2003:

<TABLE>
<CAPTION>
                                              Payment Due by Period
                               ----------------------------------------------------
                                       Less than                            After
Contractual Obligations        Total     1 Year    2-3 Years   4-5 Years   5 years
                               ------  ----------  ----------  ----------  --------
<S>                            <C>     <C>         <C>         <C>         <C>
  Long-term debt. . . . . . .  $  572  $       70  $      161  $      177  $    164
  Operating leases. . . . . .   1,931       1,358         511          62        --
                               ------  ----------  ----------  ----------  --------

Total contractual obligations  $2,503  $    1,428  $      672  $      239  $    164
                               ======  ==========  ==========  ==========  ========
</TABLE>

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURE  ABOUT  MARKET  RISK

     We are exposed to market risks related to fluctuations in interest rates on
our  variable  rate  debt,  which  consists  of  our liability for floor plan of
manufactured  housing  retail  inventories.  We  do not use interest rate swaps,
futures  contracts or options on futures, or other types of derivative financial
instruments.

     For  fixed-rate  debt,  changes in interest rates generally affect the fair
market  value,  but  not  earnings  or cash flows. Conversely, for variable-rate
debt,  changes  in  interest rates generally do not influence fair market value,
but  do  affect  future earnings and cash flows. We do not have an obligation to
prepay  fixed-rate  debt  prior to maturity, and as a result, interest rate risk
and  changes  in  fair market value should not have a significant impact on such
debt  until  we would be required to refinance it. Based on the current level of
variable-rate debt, each one percentage point increase (or decrease) in interest
rates  occurring  on  the  first day of the year would result in an increase (or
decrease)  in  interest  expense  for  the coming year of approximately $68,000.

     Our  financial  instruments  are  not currently subject to foreign currency
risk or commodity price risk. We do not believe that future market interest rate
risks  related  to  our  marketable  investments or debt obligations will have a
material  impact  on  the  Company  or  the  results  of  our future operations.

     We do not hold any financial instruments for trading purposes. We originate
loans  through  our  50%-owned affiliate Homestar 21, most of which are at fixed
rates  of  interest,  in  the  ordinary  course of business, and we periodically
securitize these loans to obtain permanent financing for such loan originations.
Accordingly, Homestar 21 loans held for sale are exposed to risk from changes in
interest  rates  between  the  time  loans  are originated and the time at which
Homestar  21  obtains permanent financing, generally at fixed rates of interest,
in  the  asset-backed  securities  market or otherwise.  Homestar 21 attempts to
manage  this  risk  by minimizing the warehousing period of unsecuritized loans.
Homestar 21 currently does not originate any loans with the intention of holding
them  for  investment.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

The  information required by this item is listed under Item 14 (a) and begins at
page  F-1  hereof.


                                       33
<PAGE>
ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

     As  previously  reported  on  Form  8-K  filed  on  January  23,  2001, the
Registrant and 21 of its affiliates filed a voluntary petition for bankruptcy on
January  11,  2001,  under  Chapter 11 of the U.S. Bankruptcy code in the United
States  Bankruptcy  Court  for  the  Southern District of Texas (the "Bankruptcy
Court").  The Registrant emerged from bankruptcy protection after the Bankruptcy
Court  confirmed  the  Registrant's  Third  Amended  Plan of Reorganization (the
"Plan")  on August 14, 2001. The Plan became effective on October 3, 2001, as to
all  22  entities  that  filed  bankruptcy.

     Prior  to  January  21,  2002, KPMG LLP ("KPMG") served as the Registrant's
independent  auditors.  On  January  8,  2002,  upon  the  recommendation of the
Registrant's  Audit Committee, the Board of Directors of the Registrant resolved
that the Registrant would retain Mann Frankfort Stein & Lipp CPAs, L.L.P. ("Mann
Frankfort")  as  the  Registrant's  independent public accountants following the
Registrant's  emergence  from  bankruptcy.  On  January 21, 2002, the Registrant
formally  engaged  Mann  Frankfort and notified KPMG (which had last audited the
Registrant's  financial  statements  for the fiscal year ended June 30, 2000) of
the  dismissal  of  KPMG  and  subsequent  engagement  of  Mann  Frankfort.

     The  reports  of KPMG on the Registrant's consolidated financial statements
as of May 31, 1999 and June 30, 2000 and for each of the two years ended May 31,
1999  and  June  30, 2000 and the one month ended June 30, 1999, included in the
Registrant's  annual  report  on  Form  10-K filed October 13, 2000 contained no
adverse  opinion  or  disclaimer  of  opinion  and  were  not  qualified  as  to
uncertainty,  audit  scope  or  accounting  principles.

     During  the  fiscal  years  ended  May  31,  1999  and  June  30, 2000, and
subsequent  periods  through  January  21, 2002 there were no disagreements with
KPMG  on  any  matter of accounting principles or practices, financial statement
disclosure,  or auditing scope or procedure, which disagreements if not resolved
to  the satisfaction of KPMG would have caused them to make reference thereto in
their  report  on  the  consolidated  financial  statements  for  such  periods.

     The  Registrant  requested  that KPMG furnish it with a letter addressed to
the Securities and Exchange Commission stating whether or not it agrees with the
above  statements.  A  copy of such letter, dated January 22, 2002, was filed as
Exhibit  16.1  to  the  Form  8-K  filed  on  January  23,  2001.

ITEM  9A.  CONTROLS  AND  PROCEDURES

     Under  the  supervision  and  with  the  participation  of  our management,
including  our Chief Executive Officer and Chief Financial Officer, we conducted
an  evaluation of our disclosure controls and procedures as such term is defined
under  Rule  13a-15(e) promulgated under the Securities Act of 1934, as amended,
as of the end of our fiscal year. Based on their evaluation, our Chief Executive
Officer  and  Chief Financial Officer concluded that our disclosure controls and
procedures  are  effective.  There  have  been no significant changes (including
corrective  actions  with  regard  to  significant  deficiencies  or  material
weaknesses)  in  our  internal  controls  or  in  other  factors  that  could
significantly  affect  these  controls  subsequent to the date of the evaluation
referenced  above.


                                       34
<PAGE>
                                    PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.

     The  directors  and  executive officers of the Company, their age and their
position  as  of  September  23,  2003  are  set  forth  below.

<TABLE>
<CAPTION>
                                                                                         YEAR TERM
                                                                                         ---------
  NAME                                            AGE     POSITION                         ENDS
  ----                                            ---     --------                         ----
<S>                                               <C>     <C>                              <C>
  Finis F. Teeter . . . . . . . . . . . . . .         59  President, Chief Executive
                                                          Officer and Director                2004

  Craig A. Reynolds . . . . . . . . . . . . .         54  Executive Vice-President, Chief
                                                          Financial Officer and Secretary

  Charles N. Carney, Jr . . . . . . . . . . .         48  Vice President, Chief Operating
                                                          Officer-Retail Operations

  Jackie H. Holland . . . . . . . . . . . . .         56  Vice President, Chief Operating
                                                          Officer-Manufacturing Operations

  Richard N. Grasso (1) (2) . . . . . . . . .         57  Director, Chairman                  2004

  Ellis McKinley (1) (2). . . . . . . . . . .         51  Director                            2004

  Richard F. Dahlson. . . . . . . . . . . . .         43  Director                            2004
<FN>
_______________________________
(1)  Member  of  the  Compensation  Committee.
(2)  Member  of  the  Audit  Committee.
</TABLE>

     FINIS  F.  TEETER  founded  the  Company in 1971.  Mr. Teeter has served as
President,  Chief  Executive Officer and a Director since October 2000, and also
served  as  Chairman  of  the  Board and Chief Executive Officer from 1971 until
August 1993.  From August 1993 until January 2000, Mr. Teeter served as Chairman
of  the Board and Co-Chief Executive Officer.  From January to October 2000, Mr.
Teeter  served  as  a  Director  of  the  Company.  Shortly before the Company's
reorganization,  Mr.  Teeter  was  appointed  as  the  President and CEO and was
actively involved in repositioning and downsizing operations as well as defining
core  operations  and  key  provisions  of the Company's Plan of Reorganization.
Prior  to  forming  the  Company,  Mr.  Teeter served in various sales and sales
management capacities with Teeter Mobile Homes from 1962 to 1969 and with Mobile
Home  Industries  from  1969  to  late  1970.

     CRAIG  A.  REYNOLDS has served as Executive Vice President, Chief Financial
Officer and Secretary of the Company since joining the Company in July 1982. Mr.
Reynolds  is  a  Certified  Public Accountant (inactive status) and holds an MBA
from  Florida Tech as well as a BBA (Accounting) from Kent State University. Mr.
Reynolds  was  the  Company's  CFO  before and during the reorganization and was
actively  involved  in  cash  management,  administrative  downsizing  and
centralization,  and meeting all reorganization-related reporting obligations of
the  Company.

     CHARLES  N.  CARNEY,  JR.  has  served  as  Vice President, Chief Operating
Officer-Retail  Operations of the Company since June 1987.  Mr. Carney served as
a  Director  of the Company from 1993 to 2000.  Mr. Carney has served in various
sales,  sales management and senior sales management capacities with the Company
since  joining  its predecessor in 1977. Mr. Carney holds a Bachelor of Business
Administration  degree  from  Eastern  Kentucky  University.

     JACKIE  H.  HOLLAND  has  served  as  Vice  President  Chief  Operating
Officer-Manufacturing  Operations  of the


                                       35
<PAGE>
Company  since August 2003. From August 1993 to July 2003, Mr. Holland served as
Vice President of Finance, Manufacturing Operations for the Company. Mr. Holland
has  more  than  30  years  of  industry experience in various manufacturing and
financial  management  capacities,  at both the plant and corporate levels, with
Oak  Creek  Homes,  Redman  Homes  and  Palm  Harbor  Homes. Mr. Holland holds a
Bachelor  of  Science degree in Accounting from the University of North Alabama.

     RICHARD  N.  GRASSO  has been a director of the Company since October 2001.
Mr.  Grasso  has served as Chairman of the Board of Directors since January 2003
and  serves  as  Chairman  of  the  Audit  Committee  and  is  a  member  of the
Compensation  Committee.  Mr. Grasso is currently the Director of Credit for the
Ben  E.  Keith  Company.  From 1974 through 2001 Mr. Grasso was a Vice President
with  Kevco, Inc., which was a supplier to the manufactured housing industry and
a  creditor  of  the  Company prior to the Company's reorganization. Kevco, Inc.
filed for bankruptcy protection under Chapter 11 on January 1, 2001.  Mr. Grasso
was  a  co-chair of the Creditor's Committee during the Company's reorganization
and  has  a  substantial  amount of experience as a supplier to the manufactured
housing  industry.  Mr.  Grasso  holds  a  BA  in  Business  Administration  and
Economics  from  Iowa  Wesleyan.

     ELLIS  MCKINLEY  has been a director of the Company since January 2003, and
serves  as  Chairman  of the Compensation Committee and as a member of the Audit
Committee. Mr. McKinley is currently the Chief Financial Officer for Transplace,
Inc.,  an  internet-enabled  logistics and supply chain service provider and was
the Chief Financial Officer for Kevco, Inc. from 1995 to 1999. Kevco, Inc. was a
supplier to the manufactured housing industry. Mr. McKinley was an audit partner
for  Grant  Thorton  from  1981  until  1994. Mr. McKinley is a Certified Public
Accountant  and  holds  a  BBA  in  Accounting  from  the  University  of Texas.

     RICHARD  F.  DAHLSON has been a director of the Company since January 2002.
Mr.  Dahlson  is a partner in Jackson Walker L.L.P., a law firm headquartered in
Dallas,  Texas,  which  served  as outside corporate counsel to the Company from
1993  to  2001. Mr. Dahlson has been with Jackson Walker since 1984. Mr. Dahlson
received  his B.S.B.A. from the University of Minnesota and his J.D. degree from
the  University  of  Wisconsin.  Mr.  Dahlson  also serves as a director of MAII
Holdings,  Inc., a holding company, and CRD Holdings, Inc., a subsidiary of MAII
that  is  engaged  in  the  long-term  automobile  rental  business.

     The  members  of the Audit Committee are Ellis McKinley and Richard Grasso,
who  serves  as  Chairman. The board of directors, in its business judgment, has
determined  that  each  member of the Audit Committee meets the independence and
experience  requirements  as  determined  under  the  National  Association  of
Securities  Dealers'  listing standards and that Mr. McKinley has the accounting
or  related financial management expertise to be considered the "audit committee
financial  expert."

SECTION  16(a)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and  executive  officers, and persons who own more than 10% of our common stock,
to  file reports of holdings and transactions in our securities with the SEC and
to furnish us with copies of all such reports. Based solely upon a review of the
reports  furnished to us with respect to the fiscal year ended June 27, 2003, we
believe  that  Mr.  McKinley  filed  a  Form  3  on September 10, 2003, that was
required  to  be  filed  on  February  3,  2003 (ten days after Mr. McKinley was
appointed  as  a  Series  C  director).

CODE  OF  ETHICS

     The  Company  adopted  our  Code  of  Business Conduct and Ethics ("Code of
Ethics")  on  December  17,  2002.  Our  Code  of Ethics sets forth standards of
conduct  for  all  officers,  directors  and  employees  of  the Company and its
subsidiary  companies,  including  all  full and part-time employees and certain
persons  that  provide  services  on  our  behalf,  such  as  agents.


                                       36
<PAGE>
ITEM  11.  EXECUTIVE  COMPENSATION

     The  following  discloses summary information regarding the compensation of
(i) Finis F. Teeter, the Chief Executive Officer, and (ii) the three most highly
compensated  officers  other  than  Mr. Teeter that earned in excess of $100,000
during  the  fiscal  year  ended  June  27,  2003  (collectively  the  "Named
Executives").

<TABLE>
<CAPTION>
                                                           Annual Compensation                   Long Term Compensation
                                             -------------------------------------------------  ------------------------
                                                                                                        Awards
                                                                                                ------------------------
                                                                                                             Securities
                                                                                                             Underlying
                                                                                 Other Annual   Restricted    Options/
Name and                                                                         Compensation      Stock        SARs
Principal Position                           Year    Salary ($)     Bonus ($)        ($)        Awards ($)    (Shares)
                                             ---------------------------------------------------------------------------
<S>                                          <C>   <C>              <C>         <C>             <C>          <C>
Finis F. Teeter . . . . . . . . . . . . . .  2003  $ 286,154(b)     $        0  $          (a)           --           --
   Director, President and. . . . . . . . .  2002    288,771           204,750             (a)           --    2,999,900
   Chief Executive Officer. . . . . . . . .  2001    334,632                 0             (a)           --           --

Craig A. Reynolds . . . . . . . . . . . . .  2003  $ 181,231(b)     $        0  $          (a)           --           --
   Executive Vice President,. . . . . . . .  2002    159,231           154,675             (a)           --      250,000
   Chief Financial Officer. . . . . . . . .  2001    171,000            25,000             (a)           --           --
   and Secretary

Charles N. Carney, Jr.. . . . . . . . . . .  2003  $ 185,939(b)     $        0  $          (a)           --           --
   Vice President, Chief. . . . . . . . . .  2002    185,741           154,675             (a)           --      250,000
   Operating Officer-Retail . . . . . . . .  2001    225,000            50,000             (a)           --           --
   Operations

James J. Fallon . . . . . . . . . . . . . .  2003  $ 190,769(b)(c)  $        0  $          (a)           --           --
   Vice President, Chief. . . . . . . . . .  2002    191,153           136,500             (a)           --      250,000
   Operating Officer- . . . . . . . . . . .  2001          0                 0               0           --           --
   Manufacturing Operations -


                               Long Term Compensation
                              ------------------------
                                              Payouts
                                             ---------
                                               LTIP       All Other
Name and                                      Payouts    Compensation
Principal Position                              ($)          ($)
                                             -------------------------
<S>                                          <C>        <C>
Finis F. Teeter . . . . . . . . . . . . . .  $      --  $           --
   Director, President and. . . . . . . . .         --              --
   Chief Executive Officer. . . . . . . . .         --              --

Craig A. Reynolds . . . . . . . . . . . . .  $      --  $           --
   Executive Vice President,. . . . . . . .         --              --
   Chief Financial Officer. . . . . . . . .         --              --
   and Secretary

Charles N. Carney, Jr.. . . . . . . . . . .  $      --  $           --
   Vice President, Chief. . . . . . . . . .         --              --
   Operating Officer-Retail . . . . . . . .         --              --
   Operations

James J. Fallon . . . . . . . . . . . . . .  $      --  $           --
   Vice President, Chief. . . . . . . . . .         --              --
   Operating Officer- . . . . . . . . . . .         --              --
   Manufacturing Operations -
<FN>
_______________________________
(a)  Other  Annual  Compensation  was less than $50,000 or 10% of such officer's
     annual  salary  and  bonus  for  such  year.
(b)  Includes  a  voluntary 10% reduction in salary from January 1, 2003 through
     June  27,  2003.
(c)  Mr.  Fallon  retired  effective  July  31,  2003 and was replaced by Jackie
     Holland.  Mr.  Fallon  will  consult with the Company on a part-time basis.
</TABLE>

OPTION/SAR  GRANTS  IN  THE  LAST  FISCAL  YEAR

     We did not grant any Option/SAR Grants to executives in fiscal 2003.

AGGREGATED  OPTION/SAR  EXERCISES  IN  LAST  FISCAL  YEAR  AND  FISCAL  YEAR-END
OPTION/SAR  VALUES

     The  following table provides information on option/SAR exercises in fiscal
2003  by  the  Named  Executives  and  the  values of such officers' unexercised
options  at  June  27,  2003.

<TABLE>
<CAPTION>
                                                    Number of
                                                   Securities            Value of
                                                   Underlying          Unexercised
                                                   Unexercised         In-The-Money
                                                 Options/SARs at     Options/SARs at
                          Shares                 Fiscal Year-End     Fiscal Year-End
                         Acquired      Value    (#); Exercisable/   (#) ; Exercisable/
                        on Exercise  Realized     Unexercisable     Unexercisable (1)
                        -----------  ---------  -----------------  --------------------
<S>                     <C>          <C>        <C>                <C>

Finis F. Teeter. . . .  N/A          $     N/A  599,980/2,399,920  $              --/--
Craig A. Reynolds. . .  N/A          N/A           50,000/200,000  $              --/--
Charles N. Carney, Jr.  N/A          N/A           50,000/200,000  $              --/--
James J. Fallon. . . .  N/A          N/A           50,000/200,000  $              --/--
<FN>
____________________________
(1)  The  Company's  common  equity  has  not  been  publicly  traded  and price
quotations  have not been established since the Company emerged from bankruptcy,
effective  October  3,  2001.  Therefore,  the  Company  is unable to accurately
determine  the  value  of  any  unexercised  options
</TABLE>


                                       37
<PAGE>
COMPENSATION  OF  DIRECTORS

     The  Company  does  not  pay  any  additional remuneration to employees for
serving  as directors of the Company. Other directors of the Company who are not
employees  receive  an  annual  retainer  fee  of  $36,000,  payable  in monthly
installments  of  $3,000, plus fees of $2,000 per day for attendance at meetings
of  the  Board of Directors and $1,000 per day for attendance at meetings of its
committees  or  for  participation  in  telephonic meetings. The Chairman of the
Board  receives  an  additional  quarterly retainer fee of $1,000, and committee
chairmen receive an additional fee of $1,000 quarterly. Directors of the Company
are  also  reimbursed  for  out-of-pocket  expenses  incurred in connection with
attendance  at  Board  and  committee meetings. The directors, along with senior
management, voluntarily reduced their fees 10% from January 1, 2003 through June
30,  2003.

AUDIT  COMMITTEE  REPORT

     The  following Report of the Audit Committee does not constitute soliciting
material  and  should  not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act  of  1934,  except  to the extent the Company specifically incorporates this
Report  by  reference  therein.  The  members  of  the Audit Committee are Ellis
McKinley  and Richard Grasso, who serves as Chairman. The board of directors, in
its  business  judgment,  has determined that each member of the Audit Committee
meets  the  independence  and  experience  requirements  as determined under the
National  Association  of  Securities  Dealers'  listing  standards and that one
member  (Mr.  McKinley)  has  the  accounting  or  related  financial management
expertise to be considered the "audit committee financial expert."

     The  Audit  Committee  acts  under  a written charter, which sets forth its
responsibilities  and  duties,  as  well  as  requirements  for  the committee's
composition and meetings. To carry out its responsibilities, the Audit Committee
met  nine  times  during  fiscal  2003.  Members of the Audit Committee met with
management,  the  Company's  outside auditors, Mann Frankfort Stein & Lipp CPAs,
L.L.P. ("Mann Frankfort"), and the Company's general counsel, Thompson & Knight,
L.L.P.  to  review  and discuss all financial statements prior to their issuance
and  to  discuss  significant  accounting  issues, if any. The Audit Committee's
review  included  discussion with Mann Frankfort on those matters required to be
discussed pursuant to Statement on Auditing Standards No. 61 "Communication With
Audit  Committees,"  as  amended  by Statement on Auditing Standards No. 90. The
Audit  Committee  also  discussed  with  Mann  Frankfort matters relating to the
independence  of  Mann  Frankfort,  including  the disclosures made to the Audit
Committee  as  required  by  the  Independence  Standards  Board  Standard No. 1
"Independence  Discussions  with  Audit  Committees".  The  Audit  Committee has
discussed  with  the  auditors  that  the  auditors  are  retained  by the Audit
Committee,  and  that  the  auditors must raise any concerns about the Company's
financial  reporting  and procedures directly with the Audit Committee. Based on
these discussions with the independent auditors, the Audit Committee believes it
has  a basis for its oversight judgments and for recommending that the Company's
audited  financial statements be included in the Company's Annual Report on Form
10-K.

     Additionally,  the  Audit  Committee  has discussed with management and the
independent  accountants  the  scope  of  the  audit,  the  Company's  critical
accounting policies, and the Company's financial statements. On the basis of the
reviews  and  discussions  mentioned,  the  Audit Committee recommended that the
audited  financial statements be included in the Company's Annual Report on Form
10-K  for  the  year  ended June 27, 2003 for filing with the SEC. Also based on
these reviews, as well as an assessment of the performance of the key engagement
partners  at Mann Frankfort, the Audit Committee recommended that Mann Frankfort
be  reappointed  as the Company's independent auditors for the 2004 fiscal year.

     Members of the Audit Committee rely without independent verification on the
information  provided  to  them  by management and the independent auditors. The
Audit  Committee's  oversight function thus does not duplicate the activities of
the  management verification that management has employed appropriate accounting
and  financial  reporting  principles,  or that appropriate procedures to ensure
compliance  with  accounting  standards  and  laws  and  regulation, or that the
financial  statements  have  been  presented  in  accordance  with  accounting
principles  generally  accepted  in  the  United  States  of  America.

                                   Respectfully submitted,
                                   Richard  Grasso,  Chairman
                                   Ellis  McKinley


                                       38
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The  Compensation  Committee  of  the  Board  of  Directors  is composed of
non-employee  directors  of  the  Company.  The  Compensation Committee's duties
include reviewing and making recommendations to the Board generally with respect
to  the compensation of the Company's executive officers. The Board of Directors
reviews  these  recommendations  and approves all executive compensation action.
During  the  Company's  reorganization,  the  official  committee  of  unsecured
creditors  appointed  by  the  United  States  Trustee  under  Chapter 11 of the
Bankruptcy  Code  (the  "Creditors  Committee")  and the Company established the
overall  framework  for  the  compensation  for  Company  employees.  Since  the
Company's  emergence from bankruptcy in October 2001, the Compensation Committee
has  implemented  and provided oversight of the compensation framework set forth
under  the  Plan  of  Reorganization.

     The  Company's  executive  compensation  program  is  designed  to  align
compensation  with  the  Company's  business  strategy,  values  and  management
initiatives.  The  program:

          -    Integrates  compensation  programs  with the Company's annual and
               long-term  strategic  planning  and  measurement  processes.

          -    Reinforces  strategic  performance  objectives through the use of
               incentive  compensation  programs.

          -    Rewards  executives  for  long-term  strategic management and the
               enhancement  of  shareholder  value  by delivering an appropriate
               ownership  interest  in  the  Company.

          -    Seeks  to attract and retain quality talent, which is critical to
               both  the  short-term  and  long-term  success  of  the  Company.

       In  connection  with  the  Company's  Plan of Reorganization, the Company
entered  into  a  written  employment agreement with Mr. Teeter in October 2001.
Mr. Teeter abstains from voting on any issue submitted to the Board of Directors
that relates to executive compensation. The Company has not entered into written
employment agreements with any other of its executive officers.  See the section
titled  "Employment  Agreements"  above  for  further  details.

     The  three  components  of  the  Company's current compensation program for
executive officers are: (i) base compensation, (ii) discretionary annual bonuses
and  (iii)  incentive  stock  options.

Base  Compensation

     During  the reorganization process, the Company and the Creditors Committee
jointly  determined  the  framework  for  base  compensation  for  the Company's
executive  officers  and management, after seeking the advice and guidance of an
outside  consulting  firm.  The  guidance  provided  by  the  outside consultant
included  evaluating and determining appropriate ranges of pay for management to
facilitate  a  salary  structure.  In  determining  appropriate  pay ranges, the
Company  and  the  Creditors  Committee  examined market compensation levels for
executives  who  were  employed  in  similar  positions in public companies with
comparable  revenues,  net  income  and  market  capitalization.  This  market
information  is  used  as a frame of reference for annual salary adjustments and
starting  salaries  and  will  continue  to  be  monitored  by  the Compensation
Committee.

Discretionary  Annual  Bonuses

     The  Compensation  Committee  believes  that  annual  cash  bonuses  may be
effectively  used  to motivate and reward the accomplishment of corporate annual
objectives,  reinforce  strong  performance  with  differentiation in individual
awards  based  on  contributions  to  business  results  and  to provide a fully
competitive compensation package with the objective of attracting, rewarding and
retaining  individuals  of  the  highest quality. As a pay-for-performance plan,
year-end  cash  bonus  awards are paid upon the achievement of performance goals
established  for  the  fiscal  year.  Executive  officers  are  measured  on two
performance  components:  (1)  corporate  financial  performance  (specific
measurements are defined each year and threshold, target and maximum performance
levels  are  established  to  reflect  the  Company's  objectives)  and  (2) key
individual  performance  which contributes to achieving


                                       39
<PAGE>
critical  results for the Company. A weighting is established for each component
taking  into  account  the  relative  importance of each based on each executive
officer's  position.  Appropriate  performance objectives are established by the
Compensation Committee and recommended to the Board of Directors for each fiscal
year  in  support  of  the  Company's  strategic  plan.

Incentive  Stock  Options

     Stock  options  align  the  interests  of  employees  and  shareholders  by
providing  value to the employee when the stock price increases. All options are
granted  at  an  exercise price of at least 100% of the fair market value of the
Series M Common Stock on the date of grant. Incentive stock options were granted
to  Messrs.  Teeter,  Reynolds,  Carney,  Fallon and other members of management
under  the  Company's  2001  Management Incentive Program in connection with the
Company's  emergence from bankruptcy during fiscal 2002. The specific amounts of
stock options granted under the 2001 Management Incentive Program, which Program
was  approved  under the Plan of Reorganization, were determined collectively by
the  Company  and the Creditors Committee, after seeking the advice and guidance
of  an  independent  consultant during the negotiations related to the Company's
reorganization.  These stock options vest seven years from the date of grant and
may vest earlier (up to 20% per year) if certain annual performance criteria are
met.

     Section  162(m)  of  the  Interval  Revenue  Code  of 1986, as amended (the
"Code"),  limits  an  employer's  income  tax deduction for compensation paid to
certain key executives of a public company to $1,000,000 per executive per year.
The  Company has no executives whose salaries currently approach this level and,
accordingly,  has  not  addressed  what  approach  it  will take with respect to
section  162(m),  except  to  the  extent  the 2001 Management Incentive Program
contains  standard  limits and provisions on awards which are intended to exempt
such  awards  from  the  section  162(m)  deduction  limits.

Compensation  of  Chief  Executive  Officer

     In  connection with the Company's reorganization, the annual base salary of
Finis  F.  Teeter,  President  and  Chief  Executive Officer, was established at
$300,000.  As  detailed below in the section titled "Employment Agreements", Mr.
Teeter  was  awarded  an  option to purchase 2,999,900 shares of Series M Common
Stock under the Company's Plan of Reorganization. These stock options vest seven
years  from  the  date  of  grant  and  may vest earlier (up to 20% per year) if
certain  annual  performance  criteria are met.  The Board of Directors approved
the  accelerated  vesting  of 20% of these options after reviewing the Company's
performance during the partial fiscal year following reorganization, which ended
June  28,  2002.  Mr.  Teeter  was  also  awarded  a cash bonus in the amount of
$204,750  based  upon  the  Company's  performance  for  the partial fiscal year
following  the  Company's  reorganization.  The Compensation Committee concluded
that  Mr. Teeter's total fiscal 2003 compensation was competitive and aligned in
the  mid-range of total compensation for other chief executives of publicly held
companies  in  similar  businesses  and  of  similar  size.  Furthermore,  the
Compensation Committee believes that total fiscal 2003 compensation reflects its
confidence  in Mr. Teeter's ability to lead the Company to execute the Company's
strategic  plans.

     This report is submitted by the members of the Compensation Committee:

                                        Ellis  McKinley,  Chairman
                                        Richard  N.  Grasso

EMPLOYMENT  AGREEMENTS

     The  Company  entered into an employment agreement, effective as of October
3,  2001,  with  Mr.  Teeter  (the "Employment Agreement") for a five-year term.
Under  the  Employment  Agreement, Mr. Teeter among other things (a) receives an
annual  salary of $300,000; and (b) is entitled to participate in fringe benefit
or  incentive  compensation plans as authorized and adopted from time to time by
the Company and made available to other employees, including the 2001 Management
Incentive Program, any pension plan, profit-sharing plan, disability or sick pay
plan,  thrift and savings plan, medical reimbursement plan, group life insurance
plan  or  other  employee  benefit  plans  made available to other employees and
executives of the Company.  The Company granted Mr. Teeter an option to purchase
2,999,900  shares  of  Series M Common Stock under the 2001 Management Incentive
Program


                                       40
<PAGE>
during  fiscal  year 2002. These options vest seven years from the date of grant
and may vest earlier (up to 20% per year) if certain annual performance criteria
established by the Board of Directors are met. In addition, all unvested options
vest  immediately  if  Mr.  Teeter  is  terminated  without  cause.

     In  the  event of a change of control of the Company, either the Company or
Mr.  Teeter  may  terminate  the Employment Agreement upon 30 days notice to the
other  party.  Under  the  Employment  Agreement,  if the Company terminates Mr.
Teeter's employment for other than cause, Mr. Teeter will be entitled to receive
an  amount  equal to one-half his base salary for the remainder of the five-year
term  of  the Agreement, payable in accordance with the Company's normal payroll
procedures.  If  the  Company  terminates Mr. Teeter's employment because of the
failure of the Company to meet reasonable performance targets established by the
Board  of Directors from time to time, Mr. Teeter will be entitled to receive an
amount  equal  to one-quarter his base salary for the remainder of the five-year
term  of  the Agreement, payable in accordance with the Company's normal payroll
procedures.  The  maximum  amount, however, that Mr. Teeter shall be entitled to
receive  for  early  termination  of  the Employment Agreement by the Company is
$500,000.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

      None  of  our  executive  officers  served as a member of the compensation
committee  of our Board of Directors. None of our executive officers served as a
director  of  any other entity whose executive officer served as a member of our
Compensation  Committee.


                                       41
<PAGE>
ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.

BENEFICIAL  OWNERSHIP  TABLE

     The  following  table  sets  forth  certain  information  with  respect  to
beneficial  ownership  of the Company's Common Stock as of September 23, 2003 by
(i)  each  of  the  Company's  directors,  (ii)  each of the Company's executive
officers,  (iii)  all  directors and executive officers as a group and (iv) each
person  or entity who is known by the Company to own five percent or more of any
class  of  the  Company's  voting  securities.

<TABLE>
<CAPTION>
Name and Address of                                                         Amount and Nature of
Beneficial Owner                                       Title of Class      Beneficial Ownership(2)  Percent of Voting
                                                                                                      Securities (2)
----------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                     <C>                      <C>

Each of the executive officers and  directors:

Richard F. Dahlson (1)                                                                 None                         *

Richard N. Grasso (1)                                                                  None                         *

Ellis McKinley (1)                                                                     None                         *

Finis F. Teeter (1)                                Series M Common Stock         600,080 shares(3)                5.6%

Craig A. Reynolds (1)                              Series M Common Stock          50,000 shares(4)                  *

Charles N. Carney, Jr. (1)                         Series M Common Stock          50,000 shares(4)                  *

Jackie H. Holland (1)                              Series M Common Stock          13,000 shares(5)                  *


All executive officers and directors as a group:.  Series M Common Stock           713,080 shares                 6.6%


Each person or entity who owns more than 5% of any class of the Company's voting
securities  (2):

Allstate Life Insurance Company
3075 Sanders Road, Suite G5A                       Series C Common Stock           844,161 shares                 7.9%
Northbrook, IL 60062

Massachusetts Mutual Life Insurance Co.
1500 Main Street, Suite 2800                       Series C Common Stock         1,402,695 shares                13.1%
Springfield, MA 01115

The Northwestern Mutual Life Insurance Co.
720 East Wisconsin Avenue                          Series C Common Stock         1,125,241 shares                10.5%
Milwaukee, WI 53202

Kemper Investors Life Insurance Co.
Custody #195279
The Bank of New York                               Series C Common Stock           551,302 shares                 5.1%
One Wall Street, 3rd Floor
New York, NY 10286
<FN>
_______________________
*  Less  than  1%

(1)  The  business address of each of the directors and officers is c/o American
Homestar  Corporation, 2450 South Shore Boulevard, Suite 300, League City, Texas
77573.

(2)  The Company's voting securities consist of Series C Common Stock and Series
M  Common  Stock.  Under  the Third Amended and Restated Plan of Reorganization,
effective  October 3, 2001, the Company issued 10,000,000 shares of its Series C
Common  Stock  to  certain  entities  that were creditors prior to the Company's
reorganization.  As  of  September 23, 2003, the Company had 6,780,364 shares of
Series  C  Common  Stock issued and outstanding and 3,219,636 shares of Series C
Common  Stock  deemed issued and outstanding that will be determined in name and
amount  as  the  claims  process arising from the registrant's Third Amended and
Restated  Plan  of  Reorganization  is completed. Prior to the completion of the
claims  process,  the  Company  is  unable  to make an accurate determination of
additional  former creditors that may ultimately become owners of at least 5% of
the  voting  securities  of  the  Company.


                                       42
<PAGE>
(3)  Includes  100  shares  of Series M Common Stock, being all of the shares of
Series  M  Common Stock currently outstanding, as well as vested but unexercised
options to purchase 599,980 shares of Series M Common Stock pursuant to the 2001
Management  Incentive  Program.

(4)  Includes vested but unexercised options to purchase 50,000 shares of Series
M  Common  Stock  pursuant  to  the  2001  Management  Incentive  Program.

(5)  Includes vested but unexercised options to purchase 13,000 shares of Series
M  Common  Stock  pursuant  to  the  2001  Management  Incentive  Program.
</TABLE>


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     The following table sets forth certain information as of June 27, 2003 with
respect  to  compensation  plans of the Company under which equity securities of
the  registrant  are authorized for issuance to employees or non-employees (such
as  directors,  consultants, advisors, vendors, customers, suppliers or lenders)
in  exchange for consideration in the forms of goods or services as described in
Statement  of  FAS  No.  123,  "Accounting  for  Stock-Based  Compensation."

<TABLE>
<CAPTION>
                               Number of securities to be issued upon    Weighted-average exercise price of
                                  exercise of outstanding options,       outstanding options, warrants and
      Plan Category                      warrants and rights                           rights
-----------------------------  ---------------------------------------  ------------------------------------
                                                 (a)                                    (b)
<S>                            <C>                                      <C>
Equity compensation plans
approved by shareholders. . .                                4,899,900  $                               1.35

Equity compensation plans not
approved by shareholders. . .                                     None                                   N/A
                               ---------------------------------------  ------------------------------------
TOTAL . . . . . . . . . . . .                                4,899,900  $                               1.35
                               =======================================  ====================================


                                 Number of securities remaining
                                  available for future issuance
                                 under equity compensation plans
                               (excluding securities reflected in
      Plan Category                        column (a)
-----------------------------  -----------------------------------
                                               (c)
<S>                            <C>
Equity compensation plans
approved by shareholders. . .                              100,000

Equity compensation plans not
approved by shareholders. . .                                  N/A
                               -----------------------------------
TOTAL . . . . . . . . . . . .                              100,000
                               ===================================
</TABLE>

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

     The  Company  has entered into two lease agreements with MOAMCO Properties,
Inc.  ("MOAMCO"),  a  corporation  owned  by Mr. Teeter, under which the Company
leases  two  retail  sales centers. Between June 29, 2002 and June 27, 2003, the
Company  paid $79,208 to MOAMCO under the lease agreements. The Company believes
that  the lease agreements are on terms as favorable to the Company as generally
available  to  unaffiliated  parties  for  comparable  properties.  Both  lease
agreements  expired  in  May  2003  and were renewed for a one-year period after
review  and  approval  by  the  Company's  independent  directors.

     It  is  the  policy  of  the  Company  that  any  future  transactions with
affiliated  individuals or entities will be on terms as favorable to the Company
as  those  reasonably  available  from  unrelated  third  parties,  and any such
affiliated transactions will require the approval of a majority of the Company's
disinterested  directors.


                                       43
<PAGE>
                                     PART IV

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS ON FORM 8-K

     (a)  (1)  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                                                                                             PAGE
                                                                                             ----
<S>                                                                                          <C>

Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Balance Sheets as of June 28, 2002 and June 27, 2003 . . . . . . . . . . . . .  F-3

Consolidated Statements of Operations for the year ended June 29, 2001, three months ended
  September 29, 2001, nine months ended June 28, 2002 and year ended June 27, 2003. . . . .  F-4

Consolidated Statements of Shareholders' Equity (Deficit) for the year ended June 29, 2001,
three months ended September 29, 2001, September 29, 2001 (Fresh Start),
nine months ended June 28, 2002 and year ended June 27, 2003. . . . . . . . . . . . . . . .  F-5

Consolidated Statements of Cash Flows for the year ended June 29, 2001, three months ended
  September 29, 2001, nine months ended June 28, 2002 and year ended June 27, 2003. . . . .  F-6

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .  F-7

     (2)  SUPPLEMENTARY SCHEDULE TO FINANCIAL STATEMENTS

Financial Statement Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . F-28
</TABLE>

     (3)  EXHIBITS

     The  exhibits  filed  as part of this report are listed under "Exhibits" at
subsection  (c)  of  Item  14

     (b)  REPORTS  ON  FORM  8-K

          During  the  fourth  quarter  of  fiscal  2003,  the Company filed one
          Current  Report  on  Form  8-K:

          Report  on  Form  8-K  dated  June  6,  2003.  Item  9.  Regulation FD
          Disclosure; Results of Operations and Financial Condition. This report
          attached  a  press  release  issued by the Company announcing that the
          Company  had  amended  its inventory finance agreement with Associates
          Housing  Finance,  LLC.

     (c)  LIST OF EXHIBITS

     2.1       Debtors'  Third  Amended  and  Restated  Plan  of  Reorganization
               (Incorporated  by  reference  to  Exhibit  99.2  to the Company's
               Current  Report  on  Form  8-K  filed  on  January  8,  2002)

     3.1       Amended  and  Restated  Articles  of Incorporation of the Company
               (Incorporated  by  reference  to  Exhibit  3.1  to  the Company's
               Quarterly  Report  on  Form  10-Q  filed  on  May  10,  2002)

     3.2       Amended  and  Restated  Bylaws  of  the  Company (Incorporated by
               reference  to  Exhibit  3.1  to the Company's Quarterly Report on
               Form  10-Q  filed  on  May  10,  2002)

     3.3       Charter  for  the Audit Committee of the Company, dated September
               19,  2001  (Incorporated  by  reference  to  the Company's Annual
               Report  on  Form  10-K  filed  on  September  24,  2002)

     3.4       Charter  for  the  Compensation  Committee  of the Company, dated
               September  18,  2001  (Incorporated by reference to the Company's
               Annual  Report  on  Form  10-K  filed  on  September  24,  2002)


                                       44
<PAGE>
     10.1      Employment  Agreement,  effective  as  of October 3, 2001, by and
               between  the  Company  and  Finis  F.  Teeter  (Incorporated  by
               reference  to  the  Company's Annual Report on Form 10-K filed on
               September  24,  2002)


     10.2      American  Homestar Corporation 2001 Management Incentive Program,
               effective as of October 3, 2001 (Incorporated by reference to the
               Company's Annual Report on Form 10-K filed on September 24, 2002)

     10.3      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  Finis  F.  Teeter
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.4      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  Craig  A.  Reynolds
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.5      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and Charles N. Carney, Jr.
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.6      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  James  J.  Fallon
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.7      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002, by and between the Company and Jackie Holland (Incorporated
               by reference to the Company's Annual Report on Form 10-K filed on
               September 23, 2003)

     14.1      American  Homestar  Corporation  Code  of  Business  Conduct  and
               Ethics,  adopted  on December 17, 2002 (Incorporated by reference
               to  the  Company's  Quarterly Report on Form 10-Q filed on May 2,
               2003)

     16.1      Letter Regarding Change in Certifying Accountant (Incorporated by
               reference to Exhibit 16.1 to the Company's Current Report on Form
               8-K  filed  on  January  25,  2002)

     21.1*     Subsidiaries  of  American  Homestar  Corporation

     31.1*     Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a))
               for  Finis  F.  Teeter,  Chief  Executive Officer of the Company.

     31.2*     Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a))
               for  Craig  A.  Reynolds,  Chief  Financial  Officer

     32.1**    Certifications  pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant  to  Section  906  of the Sarbanes-Oxley Act of 2002 for
               Finis  F. Teeter, Chief Executive Officer, and Craig A. Reynolds,
               Chief  Financial  Officer  of  the  Company.


_______________
*     Filed  herewith
**    Furnished  herewith


                                       45
<PAGE>
                                   SIGNATURES


     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized.

                                         AMERICAN  HOMESTAR  CORPORATION

Date: September 23, 2003           By:   /s/ FINIS F. TEETER
                                         ----------------------------------
                                         Finis F. Teeter, President

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  and  on  the  dates  indicated.

<TABLE>
<CAPTION>
Signature                                 Title                       Date
---------------------------  --------------------------------  ------------------
<S>                          <C>                               <C>

/s/ FINIS F. TEETER          President, CEO and                September 23, 2003
---------------------------  Director
Finis F. Teeter


/s/ CRAIG A. REYNOLDS        Executive Vice President, Chief   September 23, 2003
---------------------------    Financial Officer, and Secretary
Craig A. Reynolds              (Principal Financial
                               and Accounting Officer)


/s/  ELLIS L. MCKINLEY       Director                          September 23, 2003
---------------------------
Ellis L. McKinley


/s/ RICHARD N. GRASSO        Director                          September 23, 2003
---------------------------
Richard N. Grasso


/s/ RICHARD F. DAHLSON       Director                          September 23, 2003
---------------------------
Richard F. Dahlson
</TABLE>


                                       46
<PAGE>
<TABLE>
<CAPTION>
                           INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                                             PAGE
                                                                                             ----
<S>                                                                                          <C>

Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Balance Sheets as of June 28, 2002 and June 27, 2003 . . . . . . . . . . . . .  F-3

Consolidated Statements of Operations for the year ended June 29, 2001, three months ended
  September 29, 2001, nine months ended June 28, 2002 and year ended June 27, 2003. . . . .  F-4

Consolidated Statements of Shareholders' Equity (Deficit) for the year ended June 29, 2001,
  three months ended September 29, 2001, September 29, 2001 (Fresh Start),
  nine months ended June 28, 2002 and year ended June 27, 2003. . . . . . . . . . . . . . .  F-5

Consolidated Statements of Cash Flows for the year ended June 29, 2001, three months ended
  September 29, 2001, nine months ended June 28, 2002 and year ended June 27, 2003. . . . .  F-6

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .  F-7

Financial Statement Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . F-29
</TABLE>


                                      F-1
<PAGE>
                          Independent Auditors' Report
                          ----------------------------




To the Board of Directors of
  American Homestar Corporation
League City, Texas


We  have  audited  the  accompanying  consolidated  balance  sheets  of American
Homestar  Corporation  and  subsidiaries (the "Company") as of June 27, 2003 and
June  28,  2002  and  the  related  consolidated  statements  of  operations,
shareholders'  equity (deficit) and cash flows for the year ended June 27, 2003,
the  nine months ended June 28, 2002 (Successor Company), the three months ended
September  29,  2001  (Predecessor  Company),  and  the year ended June 29, 2001
(Predecessor  Company).  These  consolidated  financial  statements  are  the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States.  Those  standards  require that we plan and perform the
audits  to  obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis, evidence supporting the amounts and disclosures in the consolidated
financial  statements.  An  audit  also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  consolidated  financial  statement  presentation.  We
believe  that  our  audits  provide  a  reasonable  basis  for  our  opinion.

As  discussed  in Note 1 to the consolidated financial statements, on August 14,
2001,  the  Bankruptcy Court entered an order confirming the Third Amended Joint
Plan  of  Reorganization,  which became effective after the close of business on
October 3, 2001. Accordingly, the accompanying balance sheets have been prepared
in  conformity with American Institute of Certified Public Accountants Statement
of  Position 90-7, "Financial Reporting for Entities in Reorganization Under the
Bankruptcy  Code," for the Company as a new entity with assets, liabilities, and
a  capital structure having carrying values not comparable with prior periods as
described  in  Note  1.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  consolidated  financial  position of
American  Homestar Corporation and subsidiaries as of June 27, 2003 and June 28,
2002,  and the consolidated results of their operations and their cash flows for
the year ended June 27, 2003 (Successor Company), for the nine months ended June
28,  2002  (Successor  Company),  the  three  months  ended  September  29, 2001
(Predecessor  Company),  and the year ended June 29, 2001 (Predecessor Company),
in  conformity  with  accounting  principles  generally  accepted  in the United
States.


/s/  MANN FRANKFORT STEIN & LIPP CPAs, L.L.P.

Houston, Texas

August 15, 2003


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                              AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
                                       CONSOLIDATED BALANCE SHEETS
                               (IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)


                                                                                       JUNE 28,    JUNE 27,
                                                                                         2002        2003
                                                                                       ---------  ----------
<S>                                                                                    <C>        <C>
ASSETS
Current assets:
   Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  32,250  $  14,890
   Cash - reserved for claims . . . . . . . . . . . . . . . . . . . . . . . . . . . .      6,244      4,341
   Cash - restricted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      4,190        640
   Accounts receivable - trade, net . . . . . . . . . . . . . . . . . . . . . . . . .      2,692      2,692
   Accounts receivable - other, net . . . . . . . . . . . . . . . . . . . . . . . . .        287        141
   Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     27,006     30,025
   Prepaid expenses, notes receivable and other current assets. . . . . . . . . . . .        792        943
                                                                                       ---------  ----------
         Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .     73,461     53,672
                                                                                       ---------  ----------

   Notes receivable and other assets. . . . . . . . . . . . . . . . . . . . . . . . .        555        556
   Investments in affiliates, at equity . . . . . . . . . . . . . . . . . . . . . . .      3,205      3,884
   Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . .     10,149      9,469
   Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5,379      3,354
                                                                                       ---------  ----------
         Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  92,749  $  70,935
                                                                                       =========  ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  20,689  $   6,826
   Current installments of notes payable. . . . . . . . . . . . . . . . . . . . . . .        370         70
   Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,315      1,292
   Warranty reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,818      1,687
   Accrued other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7,265      4,817
   Liquidation and plan reserve . . . . . . . . . . . . . . . . . . . . . . . . . . .      3,626      1,269
   Claims reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3,067      1,666
   Initial distribution payable . . . . . . . . . . . . . . . . . . . . . . . . . . .      3,177      2,675
                                                                                       ---------  ----------
         Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .    41,327     20,302
                                                                                       ---------  ----------

   Notes payable, less current installments . . . . . . . . . . . . . . . . . . . . .        644        502
   Minority interest in consolidated subsidiary . . . . . . . . . . . . . . . . . . .        965      1,226
   Commitments and contingencies. . . . . . . . . . . . . . . . . . . . . . . . . . .         --         --

SHAREHOLDERS' EQUITY
   Common stock series C, par value $0.01; 15,000,000 shares authorized,
         10,000,000 shares issued and outstanding at June 27, 2003 and June 28, 2002.        100        100
   Common stock series M, par value $0.01; 7,500,000 shares authorized, 100
         shares issued and outstanding at June 27, 2003 and June 28, 2002 . . . . . .         --         --
   Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . .     48,449     49,355
   Retained earnings and (accumulated deficit). . . . . . . . . . . . . . . . . . . .      1,264       (550)
                                                                                       ---------  ----------
         Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . .     49,813     48,905
                                                                                       ---------  ----------
         Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . .  $  92,749  $  70,935
                                                                                       =========  ==========

See accompanying notes to consolidated financial statements
</TABLE>


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                              AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF OPERATIONS
                               (IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)


                                                     YEAR      THREE MONTHS     NINE MONTHS       YEAR
                                                    ENDED          ENDED           ENDED         ENDED
                                                   JUNE 29,    SEPTEMBER 29,     JUNE 28,       JUNE 27,
                                                     2001          2001            2002           2003
                                                  ----------  ---------------  -------------  ------------
                                                         PREDECESSOR CO.              SUCCESSOR CO.
                                                  ---------------------------  ---------------------------
<S>                                               <C>         <C>              <C>            <C>
Revenues:
   Net sales . . . . . . . . . . . . . . . . . .  $ 217,375   $       21,107   $     64,234   $    71,847
   Other revenues. . . . . . . . . . . . . . . .     24,399            5,137         18,584        20,293
                                                  ----------  ---------------  -------------  ------------
         Total revenues. . . . . . . . . . . . .    241,774           26,244         82,818        92,140
Costs and expenses:
   Cost of sales . . . . . . . . . . . . . . . .    174,999           16,086         52,184        63,878
   Selling, general and administrative . . . . .     77,948           10,290         28,703        29,566
   Restructuring charges, goodwill and asset
      impairment . . . . . . . . . . . . . . . .    139,216               --             --            --
                                                  ----------  ---------------  -------------  ------------
         Total costs and expenses. . . . . . . .    392,163           26,376         80,887        93,444
                                                  ----------  ---------------  -------------  ------------
         Operating income (loss) . . . . . . . .   (150,389)            (132)         1,931        (1,304)

Interest expense . . . . . . . . . . . . . . . .    (11,231)            (214)          (825)         (955)
Other income (expense) . . . . . . . . . . . . .        813               88            245           363
                                                  ----------  ---------------  -------------  ------------
         Income (loss) before items shown below.   (160,807)            (258)         1,351        (1,896)

Reorganization items:
   Fresh-Start adjustments . . . . . . . . . . .         --           18,863             --            --
   Reorganization costs. . . . . . . . . . . . .     (2,796)          (1,433)            --            --
                                                  ----------  ---------------  -------------  ------------

         Income (loss) before items shown below.   (163,603)          17,172          1,351        (1,896)

   Income tax expense (benefit). . . . . . . . .     16,239               20            247           282
                                                  ----------  ---------------  -------------  ------------
         Income (loss) before items shown below.   (179,842)          17,152          1,104        (2,178)

Earnings (losses) in affiliates. . . . . . . . .        492              145            409           606
Minority interests . . . . . . . . . . . . . . .        142              (50)          (249)         (242)
                                                  ----------  ---------------  -------------  ------------
         Income (loss) before items shown below.   (179,208)          17,247          1,264        (1,814)

Extraordinary item:
         Gain on forgiveness of debt . . . . . .         --          139,130             --            --
                                                  ----------  ---------------  -------------  ------------
         Net income (loss) . . . . . . . . . . .  $(179,208)  $      156,377   $      1,264   $    (1,814)
                                                  ==========  ===============  =============  ============

Earnings (loss) per share - basic and diluted:
   Income (loss) . . . . . . . . . . . . . . . .  N/A         N/A              $       0.13   $     (0.18)
                                                  ==========  ===============  =============  ============

Weighted average shares
   Outstanding - basic and diluted . . . . . . .  N/A         N/A                10,000,100    10,000,100
                                                  ==========  ===============  =============  ============
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                     AMERICAN  HOMESTAR  CORPORATION  AND  SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                                        (IN THOUSANDS EXCEPT FOR SHARE INFORMATION)


                                                                                               RETAINED
                                                                                   ADDITIONAL  EARNINGS           TOTAL
                                      PREFERRED STOCK           COMMON STOCK         PAID-IN (ACCUMULATED      SHAREHOLDERS'
                                     SHARES     VALUE       SHARES      PAR VALUE    CAPITAL    DEFICIT)          EQUITY
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------
<S>                                 <C>        <C>       <C>           <C>          <C>        <C>         <C>  <C>
BALANCES AT JUNE 30, 2000            509,167   $ 6,110    18,423,707   $      921     62,519   $  23,352        $  92,902
Redemption of preferred stock       (375,000)   (4,500)           --           --         --          --           (4,500)
Payment of preferred stock
   dividends                              --        --            --           --         --        (521)            (521)
Net loss                                  --        --            --           --         --    (179,208)        (179,208)
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------

BALANCES AT JUNE 29, 2001            134,167     1,610    18,423,707          921     62,519    (156,377)         (91,327)

Net loss                                  --        --            --           --         --      (1,616)  (1)     (1,616)
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------

PREDECESSOR COMPANY
   BALANCES AT SEPTEMBER 29,
   2001                              134,167     1,610    18,423,707          921     62,519    (157,993)         (92,943)

Cancellation of former equity
   under the Plan of
   Reorganization                   (134,167)   (1,610)  (18,423,707)        (921)   (62,519)    157,993           92,943
Issuance of new equity interest in
   connection with emergence
   from Chapter 11                        --        --            --           --     30,179          --           30,179
Issuance of new Series M
   common stock in connection
   with emergence from Chapter 11         --        --           100           --         --          --               --
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------

SUCCESSOR COMPANY
   BALANCES AT
   SEPTEMBER 29, 2001                     --        --           100           --     30,179          --           30,179

Issuance of new Series C
   common stock                           --        --     3,922,280           39        (39)         --               --
Series C common stock held in
   constructive trust                     --        --     6,077,720           61        (61)         --               --
Income tax refund recorded as
   paid-in capital                        --        --            --           --     18,370          --           18,370
Net income                                --        --            --           --         --       1,264            1,264
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------

SUCCESSOR COMPANY
   BALANCES AT JUNE 28, 2002              --        --    10,000,100          100     48,449       1,264           49,813

Issuance of new Series C common
   stock                                  --        --       946,970            9         (9)         --               --
Series C common stock held in
   constructive trust                     --        --      (946,970)          (9)         9           -               --
Liquidation and plan reserve
   adjustment recorded as paid-in
   capital                                --        --            --           --        400          --              400
Claims reserve adjustment recorded
   as paid-in capital                     --        --            --           --        506          --              506
Net loss                                  --        --            --           --         --      (1,814)          (1,814)
                                    ---------  --------  ------------  -----------  ---------  ----------       ----------

SUCCESSOR COMPANY
   BALANCES AT JUNE 27, 2003              --   $    --    10,000,100   $   100  -   $ 49,355   $    (550)       $  48,905
                                    =========  ========  ============  ===========  =========  ==========       ==========
</TABLE>

(1)  Net  loss before fresh-start adjustments and extraordinary item relating to
gain  on  forgiveness  of  debt.
See accompanying notes to consolidated financial statements


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN  HOMESTAR  CORPORATION  AND  SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (in thousands)


                                                                                                     YEAR      THREE MONTHS
                                                                                                    ENDED          ENDED
                                                                                                   JUNE 29,    SEPTEMBER 29,
                                                                                                     2001          2001
                                                                                                        PREDECESSOR CO.
                                                                                                  ---------------------------
<S>                                                                                               <C>         <C>
Cash flows from operating activities:
   Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(179,208)  $      156,377
      Adjustments to reconcile net income (loss) to net cash provided by (used in)
         operating activities:
   Fresh-Start adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --          (18,863)
   Extraordinary item - Gain on forgiveness of debt. . . . . . . . . . . . . . . . . . . . . . .         --         (139,130)
   Tax refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --               --
      Loss (Gain) on sale of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --               --
      Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      9,799              748
      Minority interests in income of consolidated subsidiaries. . . . . . . . . . . . . . . . .       (141)              50
      Losses (earnings) in affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,427             (145)
      Restructuring charges, goodwill and asset
         impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    102,751               --
      Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     15,753               --
      Change in assets and liabilities:
         Increase (decrease) in receivables. . . . . . . . . . . . . . . . . . . . . . . . . . .     34,216            1,396
         Increase (decrease) in inventories. . . . . . . . . . . . . . . . . . . . . . . . . . .     64,444              584
         Increase (decrease) in prepaid expenses, notes receivable and other current
            assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2,841              903
         Increase (decrease) in notes receivable and other assets. . . . . . . . . . . . . . . .     11,426              (95)
         Decrease in accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (24,245)          (2,216)
         Increase (decrease) in accrued expenses and other liabilities . . . . . . . . . . . . .    (22,308)           1,527
         Payment and other changes in Plan obligations . . . . . . . . . . . . . . . . . . . . .         --               --
         Decrease in long term debt and floor plan . . . . . . . . . . . . . . . . . . . . . . .   (156,365)              --
         Increase in liabilities subject to compromise under reorganization
            proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    148,756               --
                                                                                                  ----------  ---------------
            Net cash provided by (used in) operating activities. . . . . . . . . . . . . . . . .      9,146            1,136
                                                                                                  ----------  ---------------
Cash flows from investing activities:
   Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . .      4,701               --
   Proceeds from sale of assets held for sale. . . . . . . . . . . . . . . . . . . . . . . . . .         --               --
   Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . .     (1,239)             (76)
   Dividends from unconsolidated affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . .         --               --
   Investment in affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --               --
                                                                                                  ----------  ---------------
            Net cash provided by (used in) investing activities. . . . . . . . . . . . . . . . .      3,462              (76)
                                                                                                  ----------  ---------------
Cash flows from financing activities:
   Participation in floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21,503               --
   Borrowings under floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     76,198            9,368
   Repayments of floor plan payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (118,217)         (12,843)
   Proceeds from long-term debt borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .          4              214
   Principal payments of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (1,171)             (99)
   Change in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (7,297)          (4,563)
   Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (4,500)              --
   Payment of preferred stock dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (521)              --
                                                                                                  ----------  ---------------
            Net cash provided by (used in) financing
               activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (34,001)          (7,923)
                                                                                                  ----------  ---------------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .    (21,393)          (6,863)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .     43,570           22,177
                                                                                                  ----------  ---------------
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  22,177   $       15,314
                                                                                                  ==========  ===============

Supplemental Cash Flow Information
   Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      64   $           25
   Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7,031              233
                                                                                                  ==========  ===============

Non-cash investing and financing activities:
   Sale of assets in exchange for debt reduction . . . . . . . . . . . . . . . . . . . . . . . .  $   5,666   $           --
   Stock issuance recorded as reduction in paid in capital . . . . . . . . . . . . . . . . . . .         --               --
                                                                                                  ==========  ===============


                                                                                                   NINE MONTHS      YEAR
                                                                                                      ENDED        ENDED
                                                                                                    JUNE 28,      JUNE 27,
                                                                                                      2002          2003
                                                                                                        SUCCESSOR CO.
                                                                                                  -------------------------
<S>                                                                                               <C>            <C>
Cash flows from operating activities:
   Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      1,264   $  (1,814)
      Adjustments to reconcile net income (loss) to net cash provided by (used in)
         operating activities:
   Fresh-Start adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
   Extraordinary item - Gain on forgiveness of debt. . . . . . . . . . . . . . . . . . . . . . .            --          --
   Tax refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        18,370
      Loss (Gain) on sale of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            18         (77)
      Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           448         642
      Minority interests in income of consolidated subsidiaries. . . . . . . . . . . . . . . . .           249         242
      Losses (earnings) in affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (409)       (606)
      Restructuring charges, goodwill and asset
         impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
      Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
      Change in assets and liabilities:
         Increase (decrease) in receivables. . . . . . . . . . . . . . . . . . . . . . . . . . .          (396)        146
         Increase (decrease) in inventories. . . . . . . . . . . . . . . . . . . . . . . . . . .        (4,122)     (3,019)
         Increase (decrease) in prepaid expenses, notes receivable and other current
            assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         1,770        (151)
         Increase (decrease) in notes receivable and other assets. . . . . . . . . . . . . . . .           149          (1)
         Decrease in accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (1,097)        (23)
         Increase (decrease) in accrued expenses and other liabilities . . . . . . . . . . . . .        (4,684)     (2,558)
         Payment and other changes in Plan obligations . . . . . . . . . . . . . . . . . . . . .         1,081      (2,436)
         Decrease in long term debt and floor plan . . . . . . . . . . . . . . . . . . . . . . .            --          --
         Increase in liabilities subject to compromise under reorganization
            proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
                                                                                                  -------------  ----------
            Net cash provided by (used in) operating activities. . . . . . . . . . . . . . . . .        12,641      (9,655)
                                                                                                  -------------  ----------
Cash flows from investing activities:
   Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . .             3         522
   Proceeds from sale of assets held for sale. . . . . . . . . . . . . . . . . . . . . . . . . .           581       1,107
   Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . .          (155)       (407)
   Dividends from unconsolidated affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . .           272         222
   Investment in affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (31)       (296)
                                                                                                  -------------  ----------
            Net cash provided by (used in) investing activities. . . . . . . . . . . . . . . . .           670       1,148
                                                                                                  -------------  ----------

Cash flows from financing activities:
   Participation in floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
   Borrowings under floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        22,382      10,100
   Repayments of floor plan payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (21,315)    (23,963)
   Proceeds from long-term debt borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .           275          --
   Principal payments of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (299)       (443)
   Change in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2,582       5,453
   Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
   Payment of preferred stock dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --          --
                                                                                                  -------------  ----------
            Net cash provided by (used in) financing
               activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         3,625      (8,853)
                                                                                                  -------------  ----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .        16,936     (17,360)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .        15,314      32,250
                                                                                                  -------------  ----------
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     32,250   $  14,890
                                                                                                  =============  ==========

Supplemental Cash Flow Information
   Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        296   $     360
   Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           850         926
                                                                                                  =============  ==========

Non-cash investing and financing activities:
   Sale of assets in exchange for debt reduction . . . . . . . . . . . . . . . . . . . . . . . .  $        442   $      --
   Stock issuance recorded as reduction in paid in capital . . . . . . . . . . . . . . . . . . .           100          --
                                                                                                  =============  ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)  REORGANIZATION  (IN  2001)  AND  BASIS  OF  REPORTING

REORGANIZATION

          On  January  11,  2001  (the  "Petition  Date"),  American  Homestar
Corporation  and  Subsidiaries  (the  "Company")  and  twenty-one  (21)  of  its
subsidiaries filed separate voluntary petitions for reorganization under Chapter
11  of  the  United  States  Bankruptcy Code ("Chapter 11") in the United States
Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). On
August  14, 2001, the Bankruptcy Court confirmed the Third Amended Joint Plan of
Reorganization, (the "Plan"), of the Company and its subsidiaries. On October 3,
2001,  all  conditions  required for the effectiveness of the Plan were met, and
the  Plan  became  effective  ("Effective  Date"),  and  the  Company  and  its
subsidiaries  emerged  from  bankruptcy.

SUMMARY  OF  PLAN

     Under  the  Plan,  the  Company  maintained  ongoing  business  operations
primarily  in  Texas, Louisiana and Oklahoma, and conducted sales to independent
dealers  in  New Mexico, Arkansas and Colorado. The Company continued use of the
manufacturing  facilities  in  North Texas and the operation of approximately 40
retail locations. Moreover, through affiliated entities that were not subject to
the  Plan,  the  Company  continued  its  insurance,  financial  services  and
transportation  lines  of  business.

     Treatment  of  Equity: Under the terms of the Plan, all equity interests in
the  Company  were  cancelled  as  of  the  Effective  Date,  and all holders of
outstanding  shares  of  Company  stock,  which  had previously traded under the
symbols  HSTR  and  HSTRQ,  lost  all  rights  to equity interests in and to the
reorganized  Company.  Under the Plan, the Company has the authority to issue 15
million  shares of new Series C common stock and is required to issue 10 million
shares of Series C common stock to its general unsecured creditors.  Pursuant to
the  exemption  set  forth  in  Section 1145 of the Bankruptcy Code, the Company
issued  new shares of Series C common stock to persons holding allowed unsecured
claims  in  the Company's bankruptcy case and shares of Series M common stock to
management  under an incentive program. The Company has issued 10 million shares
of  Series  C  common stock and 100 shares of Series M common stock.  As of June
27,  2003, 4,869,250 shares of Series C common stock had been issued to specific
shareholders  with allowed claims and 5,130,750 shares were held in constructive
trust for the benefit of shareholders to be determined in name and amount as the
claims  process  is  completed.  The Company also has the authority to issue 7.5
million  shares  of Series M common stock to management, 100 shares of which had
been issued as of June 27, 2003 and 4,999,900 shares underlie options authorized
under  the Company's 2001 Management Incentive Program.   Options for  4,899,900
shares  have  been approved and granted at an exercise price of $1.35 per share.
These  options  vest seven years from the date of grant and may vest earlier (up
to 20% per year) if certain annual performance criteria established by the Board
of  Directors  are  met.  As  of  June 27, 2003, options for 969,980 shares were
vested.

     Treatment  of  Administrative  and Priority Claims (other than tax claims):
The  Bankruptcy  Code  sets  forth  various types of claims that are entitled to
priority  treatment.  These  priority claims include, among others, the costs of
administration  incurred during the bankruptcy case, certain consumer claims and
certain  employee claims. The priority claims that are allowed by the Bankruptcy
Code  will  be  paid  in  cash  in  full.

     Tax  Claims: Our Plan allows certain tax claims to be paid over a period of
up  to  72  months following the date of the assessment of those taxes. The Plan
authorizes  the  Company and its subsidiaries to pay tax claims over a period of
up  to  60  months,  with  interest.

     Unsecured Claims: Holders of unsecured claims of $10,000 or less were given
varying  options,  depending  upon  the  entity  owing  the unsecured claim.  In
general,  most holders of such claims are entitled to receive a small payment in
cash (typically 10% or 20% of the amount of their claim, depending on the entity
allowing  such  claim).  Certain  of  the  Company's  affiliated  entities  have
discontinued  or  will  discontinue  doing business under the terms of the Plan.
Holders  of  unsecured  claims  against  those  entities could accept a pro rata
distribution  in  three  years  when  the liquidation value of the subsidiary is
determined.  Very  few creditors have elected this option. The typical holder of
an  unsecured  claim  of more than $10,000 will receive Series C common stock in
the  Successor  Company. The stock will be issued solely by the Company, without
regard  to  which  subsidiary  actually  owing  the  claim.


                                      F-7
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Miscellaneous  Secured  Claims:  The Company was given the option to return
the  collateral  for  secured  claims  or to pay secured claims over an extended
period  of  time,  with  interest.

     Secured  Claims  by  Primary  Lender:  As part of the Plan, the Company and
several  of  its  subsidiaries entered into a new financing arrangement with the
Company's  principal  secured  lender.  The arrangement provided for substantial
debt  forgiveness by the secured lender and for the extension of a 36-month loan
by  the  secured  lender.  The  new  loan is secured by substantially all of the
Company's  inventory  and  real  estate  and  by certain other assets (including
certain specified cash deposits, totaling approximately $4.2 million at June 28,
2002 and $0.6 million at June 27, 2003, which are included in restricted cash on
the balance sheet included in the Company's financial statements). The inventory
credit  line  originally  provided  for  borrowings up to a maximum limit of $38
million,  although  the  available amount under the loan varied based on various
covenants and other requirements. Maximum borrowings peaked at approximately $21
million.   In  June  2003,  American  Homestar  amended this inventory financing
agreement  with  the  lender  to  allow for a pay-down, using approximately $5.7
million  held  by the lender in a restricted cash collateral account.  Under the
financing  agreement,  all  net  cash  proceeds  from  the  sale or lease of the
Company's  idle  facilities have been deposited into the cash collateral account
and  those  funds have been otherwise unavailable to the Company.  Proceeds from
the  future  sale or lease of idle facilities will also be available for further
debt  reduction,  under certain circumstances, at the Company's option.  As part
of  this amendment, maximum borrowings under the inventory credit line were also
voluntarily reduced to  $12 million. The loan is secured by substantially all of
the Company's inventory and real estate and by certain other assets. At June 27,
2003  the  amount  outstanding  was  approximately  $6.8  million.

BASIS  OF  REPORTING

     Upon  emergence  from  Chapter  11,  the  Company adopted the provisions of
Statement  of  Position  No.  90-7,  "Financial  Reporting  by  Entities  in
Reorganization  Under  the  Bankruptcy  Code"  ("Fresh-Start  Reporting")  as
promulgated  by  the  AICPA.  Accordingly,  all assets and liabilities have been
restated  to  reflect  their reorganization value, which approximates their fair
value at the Effective Date. In addition, the accumulated deficit of the Company
was eliminated and its capital structure was recast in conformity with the Plan,
and  the  Company has recorded the effects of the Plan and Fresh-Start Reporting
as  of  September 29, 2001. Activity between September 29, 2001, the date of the
Consolidated  Fresh-Start Balance Sheet, and October 3, 2001, the Effective Date
of  the  Plan,  was  not  material.  The adjustment to eliminate the accumulated
deficit  totaled  $158 million of which $139 million was forgiveness of debt and
$19 million was from Fresh-Start adjustments. The results of operations and cash
flows  for the three months ended September 29, 2001 include operations prior to
the  Company's  emergence  from  Chapter  11 proceedings, which do not take into
account  the  effects  of  Fresh-Start  Reporting (the Company being referred to
herein  as  "Predecessor  Company" for periods prior to September 29, 2001). The
results  of  operations  and  cash flows for the nine months ended June 28, 2002
include  operations  subsequent  to  the  Company's  emergence  from  Chapter 11
proceedings  and  reflect  the  on-going  effects  of Fresh-Start Reporting (the
Company  being  referred to herein as "Successor Company" for periods subsequent
to  September  29,  2001). As a result, the results of operations and cash flows
for  the  twelve  months  ended  June 27, 2003 for the Successor Company are not
comparable  to  the  results  of operations and cash flows for the twelve months
ended  June 28, 2002, as the earlier period includes three months of Predecessor
Company  operations  and  cash  flows,  which  do  not  reflect  the  effects of
Fresh-Start  Reporting, and nine months of Successor Company operations and cash
flows,  which  do  reflect  the  effects  of  Fresh-Start  Reporting.

     The  reorganization  value  of the Company's common equity of approximately
$30  million was determined by an independent valuation and financial specialist
after  consideration  of  several factors and by using various valuation methods
including  appraisals,  cash  flow  multiples,  price/earnings  ratios and other
relevant industry information.  The reorganization value of the Company has been
allocated  to  various  asset  categories  pursuant  to  Fresh-Start  accounting
principles.


                                      F-8
<PAGE>
<TABLE>
<CAPTION>
                                        AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


DEBT DISCHARGE AND FRESH START REPORTING The effects of the Plan on the
Predecessor Company's unaudited balance sheet at September 29, 2001 were as
follows (in thousands, except per share information):

                                                                   September 29,      Debt       Fresh-Start    Reorganized
                                                                       2001         Discharge      Entries     Balance Sheet
                                                                  -----------------------------------------------------------
<S>                                                               <C>              <C>          <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents . . . . . . . . . . . . . . . . . .  $       19,767   $            $     (4,453)  $       15,314
   Cash - reserved for claims. . . . . . . . . . . . . . . . . .              --                       4,453            4,453
   Cash - restricted . . . . . . . . . . . . . . . . . . . . . .           8,563                                        8,563
   Accounts receivable - trade, net. . . . . . . . . . . . . . .           2,251                                        2,251
   Accounts receivable - other, net. . . . . . . . . . . . . . .             332                                          332
   Inventories . . . . . . . . . . . . . . . . . . . . . . . . .          25,453                      (2,569)          22,884
   Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . .           1,201                                        1,201
   Notes receivable. . . . . . . . . . . . . . . . . . . . . . .             285                                          285
   Other current assets. . . . . . . . . . . . . . . . . . . . .           1,076                                        1,076
                                                                  -----------------------------------------------------------
         Total current assets. . . . . . . . . . . . . . . . . .          58,928           --         (2,569)          56,359
                                                                  -----------------------------------------------------------

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . .             383                                          383
Investments in affiliates, at equity . . . . . . . . . . . . . .           3,037                                        3,037
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . .             321                                          321
Property, plant and equipment. . . . . . . . . . . . . . . . . .          22,025                     (11,562)          10,463
Assets held for sale . . . . . . . . . . . . . . . . . . . . . .           6,043                                        6,043
                                                                  -----------------------------------------------------------
                                                                  $       90,737           --   $    (14,131)  $       76,606
                                                                  ===========================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Floor plan payable. . . . . . . . . . . . . . . . . . . . . .  $       19,622                               $       19,622
   Current installments of notes payable . . . . . . . . . . . .             331                                          331
   Accounts payable. . . . . . . . . . . . . . . . . . . . . . .           2,412                                        2,412
   Accrued salaries and benefits . . . . . . . . . . . . . . . .             825                                          825
   Accrued federal and state taxes payable . . . . . . . . . . .              56                                           56
   Other reserves. . . . . . . . . . . . . . . . . . . . . . . .           2,069        3,073                           5,142
   Other taxes . . . . . . . . . . . . . . . . . . . . . . . . .             653                                          653
   Warranty reserve. . . . . . . . . . . . . . . . . . . . . . .           2,145                                        2,145
   Customer deposits . . . . . . . . . . . . . . . . . . . . . .             922                                          922
   Accrued other liabilities . . . . . . . . . . . . . . . . . .           3,687                                        3,687
   Deferred income . . . . . . . . . . . . . . . . . . . . . . .             337                                          337
   Liquidation and plan reserve. . . . . . . . . . . . . . . . .              --                       1,877            1,877
   Claims reserve. . . . . . . . . . . . . . . . . . . . . . . .              --        4,453                           4,453
   Initial distribution payable. . . . . . . . . . . . . . . . .              --        2,100                           2,100
                                                                  -----------------------------------------------------------
         Total current liabilities . . . . . . . . . . . . . . .          33,059        9,626          1,877           44,562
                                                                  -----------------------------------------------------------

Notes payable, less current installments . . . . . . . . . . . .           1,149                                        1,149
Minority interest in consolidated subsidiary . . . . . . . . . .             716                                          716
Liabilities subject to compromise under reorganization
   proceedings . . . . . . . . . . . . . . . . . . . . . . . . .         148,756     (148,756)                             --

Shareholders' Equity (Deficit):
   Preferred stock, no par value; 5,000,000 shares authorized,
      509,167 shares issued and outstanding. . . . . . . . . . .           1,610                      (1,610)              --
   Common stock, $0.05 par value; 50,000,000 shares authorized,
      18,423,707 shares issued and outstanding . . . . . . . . .             921                        (921)              --
   Common stock series C, par value  $0.01 (15,000,000 shares
      authorized, 10,000,000 shares issued). . . . . . . . . . .              --                                           --
   Common stock series M, par value $0.01 (7,500,000 shares
      authorized, 100 shares outstanding). . . . . . . . . . . .              --                                           --
   Additional paid in capital. . . . . . . . . . . . . . . . . .          62,519                     (32,340)          30,179
   Accumulated deficit . . . . . . . . . . . . . . . . . . . . .        (157,993)     139,130         18,863               --
                                                                  -----------------------------------------------------------
         Total Shareholders' Equity (Deficit). . . . . . . . . .         (92,943)                    (16,008)          30,179
                                                                  -----------------------------------------------------------
                                                                  $       90,737   $       --   $    (14,131)  $       76,606
                                                                  ===========================================================
</TABLE>


                                      F-9
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(2)  SIGNIFICANT  RISKS  AND  MANAGEMENT'S  PLANS

     Prior  to its emergence from Chapter 11 proceedings on October 3, 2001 (see
Note  1),  the  Company  had incurred significant losses from operations.  These
losses  stemmed  from  several factors as a direct or indirect result of growing
industry  over-capacity.  Steadily declining retail sales of new homes per store
and  declining  new  home  orders  at  the  Company's  manufacturing  facilities
ultimately  led to sales levels which were insufficient to cover the fixed costs
of  the Company's then national operations.  In addition, the Company was called
upon  to  repurchase  significant amounts of inventory from independent dealers,
which  gave rise to increased losses of a cyclical nature.  The Company was also
experiencing  increased  debt  servicing  costs relating to its senior unsecured
debt.

     Management  believes  that  the restructuring initiatives completed through
October  3, 2001 and new initiatives since that date have positioned the Company
for  a return to profitability in the future.  However, the Company's ability to
attain profitability in the future is dependent upon many factors including, but
not  limited  to,  general economic conditions in the Company's principal market
areas  as well as factors which drive housing demand. These include, but are not
limited to, consumer confidence and new job formation. The Company's performance
is  further  affected by such factors as the availability of alternative housing
(site-constructed  homes  and apartments), the availability of affordable retail
or  mortgage  financing  and  general  industry  conditions  and  competition.

(3)  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

PRINCIPLES  OF  CONSOLIDATION  AND  GENERAL

     The  consolidated  financial  statements  include  the accounts of American
Homestar  Corporation  and  its  majority-owned  subsidiaries.  All  significant
intercompany  balances  and  transactions have been eliminated in consolidation.
Certain  amounts  previously reported have been reclassified to conform with the
2003  presentation.  The Company also owns a 50% interest in two financing joint
ventures  (Homestar  21st, LLC and American Homestar Mortgage, L.P.) and a 49.5%
interest  in  Humble  Springs  LTD,  a land development joint venture, which are
accounted  for  under  the  equity  method  of  accounting.

     The  Company's  fiscal  year ends on the Friday closest to June 30 and each
interim  period ends on the Friday closest to the end of the respective calendar
period.

ACCOUNTING  ESTIMATES

     The  preparation  of  consolidated  financial statements in conformity with
accounting  principles  generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and disclosure of contingent assets and liabilities at
the  date  of  the consolidated financial statements and the reported amounts of
revenues and expenses during the period.  Actual results could differ from those
estimates.

     Significant  estimates  were  made  to  determine  the  following  amounts
reflected  on  the  Company's  consolidated  balance  sheets:

     -    Property  Plant  and  Equipment,  according  to  provisions  for
          "Fresh-Start" Reporting, were reflected at their estimated fair market
          value  at  September  29, 2001 and at cost for additions subsequent to
          September  29,  2001,  less  accumulated  depreciation  for the period
          subsequent  to  September  29,  2001.  The  determination  of periodic
          depreciation  expense  requires  an  estimate  of the remaining useful
          lives  of  each  asset.

     -    Assets  Held  For  Sale  are reflected at estimated fair market value.

     -    Warranty  Reserves  include an estimate of all future warranty-related
          service  expenses  that  will  be  incurred as to all homes previously
          sold,  which  are  still  within  the  one-year warranty period. These
          estimates  are  based on average historical warranty expense per home,
          applied  to  the  number  of  homes


                                      F-10
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


          that  are  still  under  warranty.

     -    Reserve for future repurchase losses reflects management's estimate of
          both  repurchase  frequency  and  severity  of  net losses, related to
          agreements  with  various  financial  institutions  and  other  credit
          sources  to repurchase manufacturing homes sold to independent dealers
          in  the event of a default by the independent dealer or its obligation
          to  such  credit  sources.  Such  estimates  are  based  on historical
          experience.

     -    Liquidation  and  Plan  Reserve  reflects management's estimate of all
          costs and expenses to be incurred in administering and satisfying plan
          obligations as well as the net cost to complete the liquidation of all
          non-core  operations.

     -    Claims  Reserve reflects management's estimate of the cash required to
          satisfy  all  remaining  priority, tax, administrative and convenience
          class  claims.  This  reserve  does  not include the remaining initial
          distribution  that is reflected in another liability account, has been
          escrowed,  and  is  not  subject  to  estimation.

REVENUE  RECOGNITION



     Retail sales are recognized once full cash payment is received and the home
has  been  delivered  to  the  customer.

     Manufacturing  sales  to independent dealers and subdivision developers are
recognized  as  revenue  when  the  following  criteria  are  met:

     -    there  is  a  firm  retail  commitment  from  the  dealer;
     -    there  is  a financial commitment (e.g. an approved floor plan source,
          cash  or cashiers check received in advance or, in the case of certain
          subdivision  developers,  a  financial  commitment  acceptable  to
          management);
     -    the  home  is  completely  finished;
     -    the  home  is  invoiced;  and
     -    the  home  has  been  shipped.

     The  Company  also  maintains  used  manufactured  home  inventory owned by
outside parties and consigned to the Company, for which the Company recognizes a
sales  commission  when  received.

     Premiums  from  credit  life  insurance policies reinsured by the Company's
credit  life subsidiary, Lifestar Reinsurance, Ltd. ("Lifestar"), are recognized
as  revenue  over the life of the policy term. Premiums are ceded to Lifestar on
an  earned  basis.  Lifestar  ceased  operations  in  May  2002.

     Agency  insurance commissions are recognized when received and acknowledged
by  the  underwriter  as  due.

     Transportation revenues are recognized after the service has been performed
and  invoiced  to  the  customer.

INVENTORIES

     Newly  manufactured  homes are valued at the lower of cost or market, using
the  specific  identification  method.  Used  manufactured  homes  are valued at
estimated wholesale prices, not in excess of net realizable value. Raw materials
are valued at the lower of cost or market, using the first-in, first-out method.

PROPERTY,  PLANT  AND  EQUIPMENT

     Property,  plant  and equipment, were recorded at cost at June 29, 2001 or,
as required by Fresh-Start Reporting, were reflected at management's estimate of
fair  market  value  at  September  29,  2001,  and  since  that  date additions


                                      F-11
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


are  recorded at cost. Depreciation on property, plant and equipment is provided
by  the  straight-line  method  over  the  estimated useful lives of the related
assets. Leasehold improvements are amortized using the straight-line method over
the useful lives of the improvements or lease periods, whichever is shorter. The
Company  has  4  manufacturing  plants and several non-core retail sales centers
that  are  not in operation which are classified as assets held for sale and are
reflected  at  management's  estimate  of  net  realizable  value.

     The  Company evaluates the recoverability of long-lived assets not held for
sale  by  measuring  the  carrying  value  of  the  assets against the estimated
undiscounted future cash flows in accordance with SFAS No. 144, which superceded
SFAS No. 121. At the time such evaluations indicate that the undiscounted future
cash  flows  of  certain  long-lived  assets  are  not sufficient to recover the
carrying  value  of such assets, the assets are adjusted to their estimated fair
values.  Estimated  fair  values  are  determined  using  the  present  value of
estimated  future  cash  flows.  In  conjunction  with the SFAS No. 121 analysis
performed  in fiscal year 2001, the Company recorded long-term asset impairments
of  approximately  $38.8  million.

GOODWILL

     Goodwill, which represents the excess of purchase price over the fair value
of  net  assets  acquired,  was  amortized on a straight-line basis over periods
ranging from 10 to 40 years. The Company assesses the recoverability of goodwill
by  determining  whether  the  amortization  of  the  goodwill  balance over the
remaining  useful  life  can  be recovered through undiscounted future operating
cash  flows  of  the  acquired  operations.

     In  fiscal year 2000 the Company evaluated the recoverability of long-lived
assets  not  held for sale by measuring the carrying value of the assets against
the estimated undiscounted future cash flows in accordance with SFAS No. 121. At
the  time  such  evaluations indicate that the undiscounted future cash flows of
certain  long-lived  assets  are not sufficient to recover the carrying value of
such  assets,  the assets are adjusted to their estimated fair values. Estimated
fair  values  are  determined  using  the present value of estimated future cash
flows.  In  conjunction with the SFAS No. 121 analysis performed in fiscal years
2001,  the  Company  recorded  a  goodwill  write-off  of  approximately  $63.9.

INCOME  TAXES

     Deferred  tax  assets  and  liabilities  are  recognized for the future tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the  years in which such temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets  and  liabilities of a change in tax rates is recognized in income in the
period  that  included  the  enactment  date.  Because  of  the Company's recent
reorganization,  all  deferred  tax  assets (both short term and long term) have
been  fully  reserved  as  their  realization  is contingent upon future taxable
income.

RESERVES FOR FUTURE LOSSES ON CREDIT SALES

     The Company makes a current provision for estimated future losses on credit
retail  sales where the Company retains risk in the event of customer nonpayment
of  installment sales contracts.  Typically, the Company's period of exposure to
loss  does  not  exceed  the  first  two  installment  payments on an individual
contract.  The  amounts provided for estimated future losses on credit sales are
determined  based  on  the  Company's  historical  loss  experience after giving
consideration  to  current  economic  conditions.  In  assessing  current  loss
experience and economic conditions, management may adjust the reserve for losses
on  credit  sales  related  to  prior  years'  installment sales contracts.  All
adjustments  are  recognized  currently.

ACCRUED  WARRANTY  AND  SERVICE  COSTS

     The  Company  makes a current provision for future service costs associated
with  homes sold and for manufacturing defects for a period of one year from the
date  of  retail sale of the home.  The estimated cost of these items is accrued
at  the  time  of  sale  and  is  reflected in cost of sales in the consolidated
statements  of  operations.  For  the year ended June 29, 2001, the three months
ended  September  29,  2001,  the  nine  months  ended  June  28,  2002  and


                                      F-12
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


the  year  ended  June 27, 2003, warranty and service costs were $ 10.6 million,
$0.7  million,  $2.0  million  and  $2.0  million  respectively.

EARNINGS  PER  SHARE

     Basic  earnings  per  share  is  based  on  the  weighted  average  shares
outstanding without any dilutive effects considered.  Diluted earnings per share
reflects  dilution  from  all  contingently  issuable  shares  from  outstanding
options.  Options  granted under the Company's 2001 Management Incentive Program
are  not reflected in diluted earnings per share as there have been no sales and
no  quoted  and asked prices for the stock. Per share data for the periods ended
June  29,  2001  and  September 29, 2001 have been omitted as the Company was in
bankruptcy  during  these  periods  and  the amount does not reflect the current
capital  structure.

FINANCIAL  INSTRUMENTS

     Fair  value estimates are made at discrete points in time based on relevant
market  information.  These  estimates  may  be subjective in nature and involve
uncertainties  and  matters  of  significant  judgment  and  therefore cannot be
determined  with  precision.  The  Company believes that the carrying amounts of
its  current assets, current liabilities and long-term debt approximate the fair
value  of  such  items.

CASH  EQUIVALENTS

     Cash  equivalents  consist  of  short-term  investments  with  an  original
maturity of three months or less, money market accounts and cash in transit from
financial institutions.  Cash in transit from financial institutions presents no
risk  to  the  Company regarding collectibility and is typically received within
two  business  days  of  month  end.

CONCENTRATION  OF  CREDIT  RISK

     The  Company  maintains cash in several bank accounts which at times exceed
federally  insured  limits.  The Company monitors the financial condition of the
banks  where it maintains accounts and has experienced no losses associated with
these  accounts.

RECENT  ACCOUNTING  PRONOUNCEMENTS

       In  June  2001,  the  FASB  issued  SFAS  No.  142,  "Goodwill  and Other
Intangible  Assets."  SFAS  No. 142 addresses financial accounting and reporting
for  acquired  goodwill  and  other  intangibles.  The  statement  requires that
goodwill not be amortized but instead be tested at least annually for impairment
and  expensed  against earnings when the implied fair value of a reporting unit,
including  goodwill,  is  less  than  its  carrying  amount.  SFAS  No.  142 was
effective  for  fiscal years beginning after December 15, 2001, and its adoption
has  not  had  a  material  impact  on  our  financial  condition  or results of
operations.

     In  June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the  associated  asset  retirement  costs.  SFAS 143 was effective for financial
statements  issued  for  fiscal  years  beginning  after  June 15, 2002, and its
adoption  has not had a material impact on our financial condition or results of
operations.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal of Long-Lived Assets." SFAS 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed Of," and the accounting and reporting provisions of APB Opinion No.
30,  "Reporting the Results of Operations Reporting the Effects of Disposal of a
Segment  of  a  Business,  and Extraordinary, Unusual and Infrequently Occurring
Events  and Transactions," as it relates to the accounting for the disposal of a
segment of a business (as previously defined in that Opinion). The provisions of
SFAS  144  were  effective  for  financial  statements  issued  for fiscal years
beginning  after  December  15,  2001,  and  its adoption has not had a material
impact  on  our  financial  condition  or  results  of  operations.


                                      F-13
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      In  May  2002, the FASB issued Statement of Financial Accounting Standards
No. 145 ("SFAS 145"), "Rescission of FASB Statements No. 4, 44 and 64, Amendment
of  FASB  Statement  No. 13, and Technical Corrections." This Statement rescinds
FASB  Statements  No. 4, Reporting Gains and Losses from Extinguishment of Debt,
and  an  amendment of Statement No. 4 and FASB Statement No. 64, Extinguishments
of  Debt Made to Satisfy Sinking-Fund Requirements. This Statement also rescinds
FASB  Statement No. 44, Accounting for Intangible Assets of Motor Carriers. This
Statement  amends  FASB Statement No. 13, Accounting for Leases, to eliminate an
inconsistency  between  the  required accounting for sale-leaseback transactions
and  the  required accounting for certain lease modifications that have economic
effects  that  are similar to sale-leaseback transactions. SFAS 145 is effective
for  fiscal years beginning after May 15, 2002. We do not expect the adoption of
SFAS  145  will  have a material effect on our financial condition or results of
operations.

      In  June 2002, the FASB issued Statement of Financial Accounting Standards
No.  146  ("SFAS  146"),  "Accounting for Costs Associated with Exit or Disposal
Activities."  This  Statement  addresses  financial accounting and reporting for
costs  associated with exit or disposal activities and nullifies Emerging Issues
Task  Force  Issue  No.  94-3,  "Liability  Recognition  for  Certain  Employee
Termination  Benefits  and  Other  Costs  to Exit an Activity (including Certain
Costs  Incurred in a Restructuring)." SFAS 146 is effective for exit or disposal
activities  initiated  after December 31, 2002. We do not expect the adoption of
SFAS  146  will  have a material effect on our financial condition or results of
operations.

      In  December  2002, the Financial Accounting Standards Board (FASB) issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 148, "Accounting for
Stock-Based  Compensation-Transition  and  Disclosure,"  which  amends SFAS 123,
"Accounting  for  Stock-Based  Compensation"  to  provide alternative methods of
transition  for  a voluntary change to the fair value based method of accounting
for  stock-based compensation. In addition, this statement amends the disclosure
requirements  of  SFAS  123  to require prominent disclosures in both annual and
interim  financial  statements  about  the  method of accounting for stock-based
employee  compensation and the effect of the method used on reported results. We
will continue to account for stock-based compensation using the intrinsic method
as  permitted  by  SFAS  123 and prominently disclose the additional information
required  by  SFAS  148  in  our  annual  and  interim  reports.

     In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  (FIN) 46,
Consolidation  of  Variable  Interest  Entities.  This  interpretation  provides
guidance  on  the  identification  of,  and  financial  reporting  for, variable
interest  entities.  Variable  interest  entities  are  entities  that  lack the
characteristics of a controlling financial interest or lack sufficient equity to
finance its activities without additional subordinated financial support. FIN 46
requires  a company to consolidate a variable interest entity if that company is
obligated  to absorb the majority of the entity's expected losses or entitled to
receive  the  majority  of  the  entity's residual returns, or both. FIN 46 also
requires  disclosures  about  variable  interest  entities that a company is not
required to consolidate but in which it has a significant variable interest. FIN
46 is applicable immediately to variable interest entities created after January
31,  2003. For all variable interest entities created prior to February 1, 2003,
FIN  46 is applicable to periods beginning after June 15, 2003. We do not expect
that  the  adoption  of  FIN  46  will  have  a material effect on our financial
position  or  results  of  operation.

(4)  RESTRUCTURING CHARGES, GOODWILL AND ASSET IMPAIRMENT

Fiscal  2001  Restructuring.

     In August 2000, the Company idled its Lynn, Alabama manufacturing facility.
As  a  result,  the  Company  recorded  a  restructuring charge of approximately
$565,000  and  an  inventory  write-down  which approximated $100,000 to cost of
sales  in  the  results  of  operations.


                                      F-14
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     In  December  2000,  the Company incurred substantial restructuring charges
just  prior  to its reorganization as a result of the Company concluding that it
would  close  or  sell all non-core operations and assets.  Correspondingly, the
Company made provision for the impairment (total write-off) of goodwill relative
to  all non-core operations and for the impairment of other assets (receivables,
and  property plant and equipment) used in those operations.  Provision was also
made  for  the  other  costs  and expenses in connection with the closure of all
non-core  operations.  The  table  below  shows  the  various  components of the
restructuring  charge  in  fiscal  2001:

<TABLE>
<CAPTION>
                              MANUFACTURING           RETAIL
                           RESTRUCTURINGS (1)   RESTRUCTURING (2)   CORPORATE (3)    TOTAL
                           -----------------------------------------------------------------
<S>                        <C>                  <C>                 <C>             <C>
   Cost of sales           $               100  $               --  $           --  $    100
   Selling, general and
      Administrative                        --                  --              --        --
   Restructuring costs:
      Goodwill write-off,               61,466               2,436              --        --
      Long-term asset
         Impairments                    19,161              19,688              --        --
      Receivable
         impairments                     3,919               7,633          10,698        --
      Other                                 --                  --          14,215   139,216
                           -----------------------------------------------------------------
            Total          $            84,646  $           29,757  $       24,913  $139,316
                           =================================================================
<FN>
__________________________
     1)   Restructuring  charges  relative to the closure of eight manufacturing
          plants  in  Oregon,  Idaho,  Alabama  and  North  Carolina.
     2)   Restructuring  charges relative to the closure of 58 retail centers in
          Oregon,  Washington,  New  Mexico,  Colorado,  Alabama,  Tennessee,
          Kentucky,  North  Carolina  and  South  Carolina.
     3)   Restructuring  charges  relative  the  impairment  of  receivables and
          provision  for other costs and expenses associated with the closure of
          the  above.
</TABLE>

     During fiscal 2001, the plants that were either closed or idled contributed
$63.5  million  in  revenues and had an operating income of $0.8 million. During
fiscal  2001, the retail sales centers closed or idled contributed $52.5 million
in  revenues  and  had  an  operating  loss of $7.4 million. Approximately 2,800
employees  were  affected by the manufacturing facilities closing and idling and
the  retail  restructuring.

(5)  REORGANIZATION  COSTS

     Prior  to  the  Company's  emergence from bankruptcy, professional fees and
similar  type  expenditures directly relating to the Chapter 11 proceedings were
classified as reorganization costs and were expensed as incurred. Reorganization
costs,  primarily  professional  fees, for the year ended June 29, 2001, and for
the  three  month  period  ended  September  29, 2001 were $2.8 million and $1.4
million, respectively. Reorganization costs after emergence from bankruptcy have
been charged against the liquidation and plan reserve liability established as a
result  of  Fresh-Start  Reporting  at  September  29,  2001.


                                      F-15
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(6)  INVENTORIES

     A summary of inventories, net of valuation reserves follows (in thousands):

<TABLE>
<CAPTION>
                                        JUNE 28,   JUNE 27,
                                          2002       2003
                                        ---------  ---------
<S>                                     <C>        <C>
     Manufactured homes:
        New. . . . . . . . . . . . . .  $  22,987  $  22,620
        Used . . . . . . . . . . . . .      1,995      1,994
     Homesites:
        Land . . . . . . . . . . . . .          0        891
        Improvements . . . . . . . . .          0      2,345
     Furniture and supplies. . . . . .        468        423
     Raw materials and work-in-process      1,556      1,752
                                        ---------  ---------
              Total. . . . . . . . . .  $  27,006  $  30,025
                                        =========  =========
</TABLE>

     Substantially  all  the  Company's  new  and  used  manufactured homes were
pledged  as  collateral  against  its  floor plan credit facility (see note 12).

(7)  PROPERTY,  PLANT  AND  EQUIPMENT

     A summary of property, plant and equipment follows (in thousands):

<TABLE>
<CAPTION>
                                                       USEFUL    JUNE 28,   JUNE 27,
                                                       LIVES       2002       2003
                                                     ----------  ---------  ---------
<S>                                                  <C>         <C>        <C>
                                                                 $   7,017
     Land . . . . . . . . . . . . . . . . . . . . .           -             $   6,821
     Buildings. . . . . . . . . . . . . . . . . . .  5-30 years      2,573      2,455
     Machinery and equipment. . . . . . . . . . . .  5-10 years        430        461
     Furniture and equipment. . . . . . . . . . . .     5 years        432        579
     Vehicles . . . . . . . . . . . . . . . . . . .     3 years         26         13
     Leasehold improvements . . . . . . . . . . . .  5-13 years        287        264
                                                                 ---------  ---------
              Total                                                 10,765     10,593
     Less accumulated depreciation and amortization                    616      1,124
                                                                 ---------  ---------
              Property, plant and equipment, net                 $  10,149  $   9,469
                                                                 =========  =========
</TABLE>

     Substantially  all the Company's property, plant and equipment were pledged
as  collateral  against  its  floor  plan  credit  facility  (see  note  12).

(8)  ASSETS  HELD  FOR  SALE

     Under the Plan, the Company identified certain non-core assets (principally
idle  factories  in  non-core markets) where there were no current intentions to
reactivate these facilities for future core operations. Management estimates the
fair  market  value  of  these  assets  at June 28, 2002 and June 27, 2003 to be
approximately  $5.4  million  and  $  3.4 million, respectively. The Company has
reported these assets as Assets held for sale and is actively seeking to sell or
lease these properties. Net cash proceeds resulting from such sale or lease will
be  deposited  in  the  restricted cash collateral account. The Company sold two
non-core  retail  sales  centers  in  fiscal 2002 and two non-core manufacturing
plants  in  fiscal  2003.


                                      F-16
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(9)  PREPAID EXPENSES, NOTES RECEIVABLE AND OTHER ASSETS

     A summary of other assets follows (in thousands):

<TABLE>
<CAPTION>
                                                                        JUNE 28,   JUNE 27,
                                                                          2002       2003
                                                                        ---------  ---------
<S>                                                                     <C>        <C>
     Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . .  $     568  $     390
     Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . .        453        577
     Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        251        532
     Net cash surrender value of company-owned life insurance. . . . .         75         --
                                                                        ---------  ---------

                 Total . . . . . . . . . . . . . . . . . . . . . . . .      1,347      1,499

     Less current portion. . . . . . . . . . . . . . . . . . . . . . .        792        943
                                                                        ---------  ---------
              Prepaid expenses, notes receivable and other assets less
                 current portion . . . . . . . . . . . . . . . . . . .  $     555  $     556
                                                                        =========  =========
</TABLE>

(10) INCOME  TAXES

     The  provision  for  income taxes related to operations in the consolidated
statements  of  operations  is  summarized  below  (in  thousands):

<TABLE>
<CAPTION>
                                           YEAR      THREE MONTHS    NINE MONTHS     YEAR
                                           ENDED        ENDED           ENDED        ENDED
                                         JUNE 29,   SEPTEMBER 29,     JUNE 28,     JUNE 27,
                                           2001          2001           2002         2003
                                         ---------  --------------  -------------  ---------
                                               PREDECESSOR CO.            SUCCESSOR CO.
                                         -------------------------  ------------------------
<S>                                      <C>        <C>             <C>            <C>
     Federal-current expense (benefit).  $      --  $           20  $        295   $     250
     Federal-deferred expense (benefit)     16,239              --           (48)         32
     State-current expense (benefit). .         --              --            --          --
     State-deferred expense (benefit) .         --              --            --          --
                                         ---------  --------------  -------------  ---------
          Total . . . . . . . . . . . .  $  16,239  $           20  $        247   $     282
                                         =========  ==============  =============  =========
</TABLE>


                                      F-17
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The  Company  files  a  consolidated  return  for  federal  tax  purposes;
accordingly,  taxes  at  statutory  rates  are computed based on earnings before
earnings  in  affiliates  and minority interests. The provision for income taxes
related  to  operations  varied  from  the  amount computed by applying the U.S.
federal  statutory  rate  as  a  result  of  the  following:

<TABLE>
<CAPTION>
                                               YEAR      THREE MONTHS     NINE MONTHS      YEAR
                                              ENDED          ENDED           ENDED        ENDED
                                             JUNE 29,    SEPTEMBER 29,     JUNE 28,      JUNE 27,
                                               2001          2001            2002          2003
                                            ----------  ---------------  -------------  ----------
                                                   PREDECESSOR CO.             SUCCESSOR CO.
                                            ---------------------------  -------------------------
<S>                                         <C>         <C>              <C>            <C>
     Computed "expected" tax expense
        (benefit). . . . . . . . . . . . .  $ (57,261)  $        6,010   $        473   $    (663)
     State income tax, net of federal tax
        benefit. . . . . . . . . . . . . .       (245)              --             --          --
     Nondeductible goodwill. . . . . . . .     11,746               --             --          --
     Nondeductible restructing cost. . . .        869            7,779            489          --
     Carry back of net operating loss
        recorded in equity . . . . . . . .     18,370               --             --          --
     Other, net. . . . . . . . . . . . . .      2,005            2,100            245         (20)
     Increase (decrease) in valuation
        allowance. . . . . . . . . . . . .     40,755          (15,869)          (960)        965
                                            ----------  ---------------  -------------  ----------
              Total. . . . . . . . . . . .  $  16,239   $           20   $        247   $     282
                                            ==========  ===============  =============  ==========
</TABLE>

     The  Job Creation and Worker Assistance Act of 2002 extended the loss carry
back  period  for  losses  generated  in fiscal 2001 and 2002.  Accordingly, the
Company  was  eligible for a refund of federal income taxes paid in fiscal years
1997  and  1998.  During the year ended June 28, 2002, the Company received such
refund  of approximately $18.4 million. The tax refund has been reflected in the
equity  section of the Consolidated Balance Sheet in accordance with Fresh-Start
accounting as an addition to Additional paid-in capital. The Company's remaining
net operating loss carry forward from the year June 28, 2002 was offset entirely
by  income  from  discharge  of  indebtedness  as  a  result  of  the  Company's
reorganization.


                                      F-18
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The  tax  effects  of  temporary  differences that give rise to significant
portions  of  the deferred tax assets and deferred tax liabilities are presented
below  (in  thousands):

<TABLE>
<CAPTION>
                                                           JUNE 28,    JUNE 27,
                                                             2002        2003
                                                          ----------  ----------
<S>                                                       <C>         <C>
Current deferred tax assets:
  Uniform capitalization of interest . . . . . . . . . .  $     128   $      62
  Inventory reserve. . . . . . . . . . . . . . . . . . .        252         160
  Allowance for doubtful accounts. . . . . . . . . . . .        270         235
  Liabilities not deductible until paid. . . . . . . . .      1,266       2,034
                                                          ----------  ----------
  Total before valuation allowance . . . . . . . . . . .      1,916       2,491
  Valuation allowance. . . . . . . . . . . . . . . . . .     (1,916)     (2,491)
                                                          ----------  ----------
     Current deferred tax assets . . . . . . . . . . . .  $      --   $      --
                                                          ==========  ==========

Noncurrent deferred tax assets (liabilities):
  Goodwill amortization and write-offs . . . . . . . . .  $  14,223   $  12,940
  Plant and equipment, principally due to differences in
    depreciation and estimated costs to dispose of
    manufacturing facilities . . . . . . . . . . . . . .     12,853       9,066
  Impairment of assets . . . . . . . . . . . . . . . . .          8          --
  Net operating loss carry forward . . . . . . . . . . .         --       5,468
                                                          ----------  ----------
  Total before valuation allowance . . . . . . . . . . .     27,084      27,474
  Valuation allowance. . . . . . . . . . . . . . . . . .    (27,084)    (27,474)
                                                          ----------  ----------
      Noncurrent deferred tax assets, net. . . . . . . .  $      --   $      --
                                                          ==========  ==========
</TABLE>

     The  Company  generated  a  net operating loss for tax purposes in the year
ended  June  27, 2003, of $15.6 million. This net operating loss is available to
offset  taxable  income  until  June  30,  2023.

     In  assessing  the realizability of deferred income tax assets, the Company
considers  whether  that  it is more likely than not that some portion or all of
the  deferred  income tax assets will not be realized.  The ultimate realization
of deferred income tax assets is dependent upon the generation of future taxable
income  during  the  periods  in  which  those temporary differences and the net
operating  loss  become  deductible.  Due  to  the  recent  historical operating
results  of  the Company, management is unable to conclude on a more likely than
not basis that all deferred income tax assets generated through operating losses
through  June  27,  2003  will  be  realized.   Accordingly,  the  Company  has
recognized a full valuation allowance to reduce the net deferred tax asset to an
amount  that  management  believes  will  more  likely  than  not  be  realized.



                                      F-19
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(11) INVESTMENT  IN  AFFILIATED  COMPANIES

     Homestar  21, LLC ("Homestar 21") is 50% owned by the Company and 50% owned
by  21st  Mortgage, a company not affiliated with the Company.  Homestar 21 is a
finance company that specializes in providing chattel and land/home financing to
the  Company's customers. The Company accounts for its investment in Homestar 21
using  the  equity  method.  The  Company  invested  $2.4 million in Homestar 21
during  fiscal 2000. Summary financial information for Homestar 21, derived from
the  audited  financial statements of 21st Mortgage, as of the periods indicated
follows  (in  thousands):

<TABLE>
<CAPTION>
                                                                 JUNE 28,   JUNE 27,
                                                                   2002       2003
                                                                ---------  ---------
<S>                                                             <C>        <C>
     Total assets . . . . . . . . . . . . . . . . . . . . . . . $  17,494  $   7,110
                                                                =========  =========

     Total liabilities. . . . . . . . . . . . . . . . . . . . . $  11,147  $     191
     Shareholders' equity . . . . . . . . . . . . . . . . . . . $   6,347  $   6,919
                                                                =========  =========

     Total revenues . . . . . . . . . . . . . . . . . . . . . . $   2,706  $   3,119
     Net income . . . . . . . . . . . . . . . . . . . . . . . . $   1,107  $   1,016
                                                                =========  =========
</TABLE>

     In  May  2002,  the  Company  invested  $31,500  to provide one-half of the
initial  capitalization  of  American  Homestar  Mortgage,  L.P.  ("Homestar
Mortgage"),  a  joint  venture  owned  50%  by  the Company and 50% by Home Loan
Corporation  ("Home  Loan"), a Company not affiliated with the Company. Homestar
Mortgage  will  operate  as  a  mortgage  broker/loan  originator  for  ultimate
placement  with  Home  Loan and other mortgage banks. Homestar Mortgage will not
bear  any  lending  risk  on loans it originates. Homestar Mortgage obtained its
license  and  regulatory  approval  on  October  8, 2002 and began operations in
November  2002.  The  Company  accounts  for its investment in Homestar Mortgage
using the equity method. Summary of unaudited financial information for Homestar
Mortgage  as  of  and  for  the  period indicated, is as follows (in thousands):

<TABLE>
<CAPTION>
                                                              JUNE 28,   JUNE 27,
                                                                2002       2003
                                                             ---------  ---------
<S>                                                          <C>        <C>
     Total assets. . . . . . . . . . . . . . . . . . . . . . $      63  $     263
                                                             =========  =========

     Total liabilities . . . . . . . . . . . . . . . . . . . $      --  $       5
     Owners' equity. . . . . . . . . . . . . . . . . . . . . $      63  $     258
                                                             =========  =========

     Total revenues. . . . . . . . . . . . . . . . . . . . . $      --  $     544
     Net income. . . . . . . . . . . . . . . . . . . . . . . $      --  $     195
                                                             =========  =========
</TABLE>

     Subsequent  to  June 27, 2003 we reached agreement with our venture partner
in  Homestar  Mortgage  to  cease  operations  effective  July  31,  2003.


                                      F-20
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     In  March,  2003,  the  Company invested $50 for a 49.5% interest in Humble
Springs LTD, a land development joint venture. The other partners in the venture
are  a  land development company and certain of its affiliates, none of whom are
affiliated  with the Company.  Under the terms of the partnership agreement, the
land  developer  guarantees all debt of the partnership and the Company provides
for  the  cash  needs  of  the venture (to a maximum of $547,000) in the form of
additional  capital  contributions  for which it will receive a preferred return
when  the  development  project  is  completed.  As  of  June 27, 2003, American
Homestar  had  contributed  a  total  of $296,000.  The Company accounts for its
investment  in  Humble  Springs  LTD using the equity method.  Summary unaudited
financial  information for Humble Springs LTD as of and for the period indicated
is  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                                                              JUNE 28,   JUNE 27,
                                                                2002       2003
                                                             ---------  ---------
<S>                                                          <C>        <C>
     Total assets. . . . . . . . . . . . . . . . . . . . . . $      --  $     783
                                                             =========  =========

     Total liabilities . . . . . . . . . . . . . . . . . . . $      --  $     487
     Owners' equity. . . . . . . . . . . . . . . . . . . . . $      --  $     296
                                                             =========  =========

     Total revenues. . . . . . . . . . . . . . . . . . . . . $      --  $      --
     Net income. . . . . . . . . . . . . . . . . . . . . . . $      --  $      --
                                                             =========  =========
</TABLE>


                                      F-21
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(12) NOTES  AND  FLOOR  PLAN  PAYABLE

     On  October  3,  2001, the Company entered into a floorplan credit facility
with  Associates Housing Financial LLC ("Associates") to finance the purchase of
its display models and inventory homes. The balance outstanding at June 28, 2002
was $20.7 million and the balance at June 27, 2003 was $6.8 million. The maximum
allowance  under  the  line of credit is $38 million with various sub-limits for
each  category  of  inventory  financed  and the line is contractually committed
until  October  2,  2004. Two liquidating lines, with a combined balance of $1.4
million,  were  paid off during the three-month period ended September 27, 2002.
As  the  Company  paid down the liquidating lines, additional borrowing capacity
became  available  under the revolving lines. The revolving portions of the line
carry  an annual interest rate of prime plus 1%. The liquidating portions of the
original  line carried no interest for the first six months (which expired April
3,  2002)  and  thereafter accrued interest at a rate of prime plus 1% per annum
(5.75%  at  June  28,  2002  and  5.0  %  at  June  27,  2003).

     In  June 2003, American Homestar amended this inventory financing agreement
with  the  lender to allow for a pay-down, using approximately $5.7 million held
by  the  lender  in  a  restricted  cash collateral account. Under the financing
agreement,  all  net  cash proceeds from the sale or lease of the Company's idle
facilities  have been deposited into the cash collateral account and those funds
have been otherwise unavailable to the Company. Proceeds from the future sale or
lease  of  idle  facilities  will  also be available for further debt reduction,
under certain circumstances, at the Company's option. As part of this amendment,
maximum borrowings under the inventory credit line were also voluntarily reduced
to  $12  million.

     The  floor  plan  payable  is secured by substantially all of the Company's
inventory,  real  estate and by certain other assets (including certain specific
cash  deposits,  approximately  $0.6  million  at  June  27,  2003  included  in
restricted cash). In addition to traditional subjective covenants, there are two
financial  covenant  tests  the Company is required to meet under its floor plan
agreements.  One  test is floor plan debt compared to total assets (as defined).
The  other  test  is a minimum cash balances requirements.  At June 27, 2003 and
for  all  prior  periods  as of and after September 29, 2001, the Company was in
compliance  with  all  covenants.

     Amounts due under the floor plan credit facility follows (in thousands):

<TABLE>
<CAPTION>
                                                                       JUNE 28,   JUNE 27,
                                                                         2002       2003
                                                                      ---------  ---------
<S>                                                                   <C>        <C>
     Floor plan payable . . . . . . . . . . . . . . . . . . . . . . . $  20,689  $   6,826
                                                                      =========  =========
</TABLE>


                                      F-22
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     A  summary  of  notes  payable,  all  to  non-financial institutions unless
otherwise  noted,  with  no  covenants  follows  (in  thousands):

<TABLE>
<CAPTION>
                                                                                  JUNE 28,   JUNE 27,
                                                                                    2002       2003
                                                                                  ---------  ---------
<S>                                                                               <C>        <C>
     Notes payable in monthly installment, including interest of 10.0% due
        through August 2008; secured by real property. . . . . . . . . . . . . .        306        276
     Note payable to Associates in monthly installments, principal only, due
        through July 2002; secured by lot signs and equipment. . . . . . . . . .         20          0
     Note payable in monthly installments, including interest of 10.0% due
        through November 2010; secured by real property. . . . . . . . . . . . .        131        121
     Note payable in monthly installments, including interest of 10.0%, due
        through September 2007; secured by real property . . . . . . . . . . . .        106         90
     Note payable to an individual and a financial institution in monthly
        installments, including interest of 9.5%, due through July 2012; secured
        by real property . . . . . . . . . . . . . . . . . . . . . . . . . . . .         91         85
     Note payable in monthly installments, including interest of 8.0%, due
        through July 2008; secured by real property. . . . . . . . . . . . . . .         79          0
     Bank revolving line of credit, bearing interest at prime plus 1% due
        June, 2003; secured by affiliate accounts receivable . . . . . . . . . .        250          0
     Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         31          0
                                                                                  ---------  ---------
                    Total. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   1,014  $     572
     Less current installments . . . . . . . . . . . . . . . . . . . . . . . . .        370         70
                                                                                  ---------  ---------
                    Notes payable, less current installments . . . . . . . . . .  $     644  $     502
                                                                                  =========  =========
</TABLE>

     The  aggregate  maturities  of notes payable for each of the five years and
thereafter  as  of  to  June  27,  2003  are  as  follows  (in  thousands):

<TABLE>
<CAPTION>
<S>                                                            <C>
     2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70
     2005 . . . . . . . . . . . . . . . . . . . . . . . . . . .   76
     2006 . . . . . . . . . . . . . . . . . . . . . . . . . . .   85
     2007 . . . . . . . . . . . . . . . . . . . . . . . . . . .   94
     2008 . . . . . . . . . . . . . . . . . . . . . . . . . . .   83
     Thereafter . . . . . . . . . . . . . . . . . . . . . . . .  164
                                                                ----
                . . . . . . . . . . . . . . . . . . . . . . . . $572
                                                                ====
</TABLE>

(13) STOCKHOLDERS'  EQUITY

     Under  the  terms  of  the  Plan,  all equity interests in the Company were
cancelled  as  of  the  Effective Date, and all holders of outstanding shares of
Company  stock,  which  had  previously traded under the symbols HSTR and HSTRQ,
lost  all  rights  to equity interests in and to the reorganized Company.  Under
the Plan, the Company has the authority to issue 15 million shares of new Series
C  common  stock  and  is required to issue 10 million shares of Series C common
stock  to  its general unsecured creditors.  Pursuant to the exemption set forth
in  Section 1145 of the Bankruptcy Code, the Company issued new shares of Series
C  common  stock  to  persons  holding allowed unsecured claims in the Company's
bankruptcy  case  and  shares  of  Series  M common stock to management under an
incentive  program.  The Company has issued 10 million shares of Series C common
stock  and  100 shares of Series M common stock.  As of June 28, 2002, 3,922,280
shares  of  Series  C common stock had been issued to specific shareholders with
allowed  claims  and  6,077,720  shares  were held in constructive trust for the
benefit  of  shareholders  to  be  determined  in  name and amount as the claims
process  is  completed. As of June 27, 2003, 4,869,250 shares of Series C common
stock had been issued to specific shareholders with allowed claims and 5,130,750
shares  were  held  in  constructive trust for the benefit of shareholders to be
determined  in  name  and  amount  as  the  claims  process  is


                                      F-23
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


completed.  The  Company  also  has the authority to issue 7.5 million shares of
Series  M  common stock to management, 100 shares of which had been issued as of
June 28, 2002 and June 27, 2003 and 4,999,900 shares underlie options authorized
under  the Company's 2001 Management Incentive Program. At June 28, 2002 options
for 4,899,900 shares were approved and granted at an exercise price of $1.35 per
share. At June 27, 2003, options for 4,949,900 shares were approved land granted
at an exercise price of $1.35 per share. These options vest seven years from the
date  of  grant  and  may  vest  earlier  (up to 20% per year) if certain annual
performance  criteria  established by the Board of Directors are met. As of June
27,  2003,  options for 969,980 shares were vested. No options were exercised to
date.

     Activity under the Stock Option Plan was as follows:

<TABLE>
<CAPTION>
                                                                     WEIGHTED
                                                                     AVERAGE
                                                       OUTSTANDING   EXERCISE
                                                         OPTIONS       PRICE
                                                       ------------  ---------
<S>                                                    <C>           <C>
     Balance, June 30, 2001 . . . . . . . . . . . . . .          0          --
        Granted under the plan. . . . . . . . . . . . .  4,949,900   $    1.35

     Balance, June 28, 2002 . . . . . . . . . . . . . .  4,949,900        1.35
        Granted under the plan. . . . . . . . . . . . .     50,000        1.35
        Canceled. . . . . . . . . . . . . . . . . . . .   (100,000)       1.35

     Balance, June 27, 2003 . . . . . . . . . . . . . .  4,899,900        1.35
</TABLE>

     The  Company  accounts  for  grants  to  employees  and directors under the
provisions  of  APB Opinion No. 25 and related interpretations. Had compensation
expense  for  the  Plan  been  determined  based  upon  the fair value method as
prescribed  in  SFAS  No.  123,  the net income (loss) would have changed to the
following pro Forma amounts for the years ended June 28, 2002 and June 27, 2003,
respectively.

<TABLE>
<CAPTION>
                                                      YEAR ENDED    YEAR ENDED
                                                       JUNE 28,      JUNE 27,
                                                         2002          2003
                                                     ------------  ------------
<S>                                                  <C>           <C>
     Net income (loss), as reported                  $     1,264   $    (1,814)
     Deduct: total stock-based employee
        Compensation expense determined under
        fair value based method for all awards, net
        of related tax effects                              (255)         (174)
                                                     ------------  ------------

     Net income (loss), pro forma                    $     1,009   $    (1,988)
                                                     ============  ============

     Earnings per share
        As reported                                  $      0.13   $     (0.18)
        Pro forma                                           0.10         (0.20)
</TABLE>

     At  June  27, 2003, the Company had 4,899,9000 stock options at an exercise
price  of  $1.35  per  share  with  a  weighted  average  of 7.4 remaining years
contractual  life.


                                      F-24
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The  fair value of stock options granted in 2002 and 2003 were estimated on
the  date of grant using the "minimum value" method as the stock was not trading
during  the  years  ended June 28, 2002 and June 27, 2003 and was not trading on
September  23,  2003.  The  weighted average fair values and related assumptions
were:

     Weighted average fair value . . . . . . . . . . . . . . . .      $ 1.35
     Market interest rate. . . . . . . . . . . . . . . . . . . .        4.35%

(14) RELATED  PARTY  BALANCES  AND  TRANSACTIONS

     MOAMCO  Properties,  Inc.  (MOAMCO), an entity owned by the Company's Chief
Executive Officer, owns and leases to the Company, under operating leases, land,
improvements and buildings related to two sales centers at June 29, 2001 and one
sales center at June 28, 2002 and June 27, 2003.  During the year ended June 29,
2001, three months ended September 29, 2001, nine months ended June 28, 2002 and
the  year  ended  June  27, 2003, the Company paid MOAMCO approximately $91,000,
$22,000, $67,000 and $79,000, respectively, for these operating leases (see note
15).

(15) COMMITMENTS  AND  CONTINGENCIES

REPURCHASE  AGREEMENTS

     The  Company  has entered into repurchase agreements with various financial
institutions  and other credit sources pursuant to which the Company has agreed,
under  certain  circumstances,  to  repurchase  manufactured  homes  sold  to
independent  dealers in the event of a default by such independent dealer on its
obligation  to  such  credit  sources.  Under  the  terms  of  such  repurchase
agreements,  the  Company  agrees  to repurchase manufactured homes at declining
prices  over  the periods of the agreements (which generally range from 18 to 24
months).

     While  repurchase  activity  is  very  sporadic  and  cyclical, the Company
provides  for anticipated repurchase loses. As the Company had very few sales of
manufactured  homes  to  independent dealers between the Effective Date and June
29, 2001, there was no potential repurchase obligation at that date. At June 28,
2002 and June 27, 2003, the Company was at risk to repurchase approximately $2.9
million  and  $1.2  million of manufactured homes respectively, and has provided
for  estimated  net  repurchase losses at approximately $0.2 million at June 28,
2002  and  at  June  27,  2003.

LEGAL  MATTERS

     On  the Effective Date of the Plan, most pending claims were discharged and
an  injunction  was  issued  barring  any future claims arising from events that
occurred  prior  to  October  3,  2001.  In  a  few  cases,  litigation has been
reinstated  solely  for  the  purpose  of  determining  the  amount of a general
unsecured  claim  against  the  Company  or  a claim to be paid by the Company's
insurers.  Since  the  Effective  Date,  there  are  no  other  pending  legal
proceedings,  except  for  routine  litigation incidental to the business, which
management  believes  is  not  material  to its business or financial condition.

SAVINGS  PLAN

     The Company has adopted the American Homestar Corporation 401(k) Retirement
Plan  (the  "Savings  Plan")  whereby  all  employees  of  the  Company who have
completed  six months of service and have reached the age of twenty and one-half
are eligible to participate in the Savings Plan.  A Plan Administrator appointed
by  the Company administers the Savings Plan.  Eligible employees may contribute
a  portion  of  their annual compensation up to the legal maximum established by
the  Internal Revenue Service for each plan year.  No employee contributions are
invested  in  securities  issued by the Company or its subsidiary companies. The
Company has made no contributions to the Savings Plan since January 2001. During
the  year  ended  June 29, 2001 the Company contributed approximately $39,000 to
the  Savings  Plan.


                                      F-25
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


WORKERS  COMPENSATION  LIABILITY

     The  Company  has  rejected  the  insurance  coverage provided by the Texas
Workers'  Compensation  Act.  While  the  Company  maintains  excess  indemnity
insurance,  the  Company's  portion  of  self-insured  retention is $250,000 per
occurrence.  Management,  in  assessing loss experience, adjusts its reserve for
losses  through periodic provisions.  In states other than Texas, the Company is
insured  for  workers  compensation.

LEASES

     The  Company  is  obligated  under  various  noncancelable  operating lease
agreements  with  varying  monthly payments and varying expiration dates through
March, 2007.  Rental expense under operating leases for the years ended June 29,
2001,  the three months ended September 29, 2001, the nine months ended June 28,
2002  and the year ended June 27, 2003 were $4,973,000, $410,000, $1,472,000 and
$1,817,000,  respectively.

     Aggregate annual rental payments due to independent and related parties, on
future  lease  commitments  at  June  27,  2003  were as follows (in thousands):

<TABLE>
<CAPTION>
                                     AMOUNTS DUE         AMOUNTS DUE     TOTAL LEASE
                                 INDEPENDENT PARTIES   RELATED PARTIES   COMMITMENTS
                                 --------------------  ----------------  ------------
<S>                              <C>                   <C>               <C>
            2004 . . . . . . . . $              1,208  $             72  $      1,280
            2005 . . . . . . . .                  419                 -           419
            2006 . . . . . . . .                   92                 -            92
            2007 . . . . . . . .                   62                 -            62
            2008 . . . . . . . .                   --                 -            --
            Thereafter . . . . .                   --                 -            --
                                 --------------------  ------------------------------
                                 $              1,781  $             72  $      1,853
                                 ====================  ==============================
</TABLE>


                                      F-26
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(16) BUSINESS  SEGMENTS

     The  Company  operates  primarily  in  three business segments - (i) retail
sales;  (ii)  manufacturing;  and  (iii)  corporate, which consists of financial
service,  transportation  services  and the corporate group. The following table
summarizes,  for  the  periods  indicated,  information about these segments (in
thousands):

<TABLE>
<CAPTION>
                                                                               ADJUSTMENTS/
                                      RETAIL     MANUFACTURING    CORPORATE    ELIMINATIONS     TOTAL
                                     ---------  ---------------  -----------  --------------  ----------
<S>                                  <C>        <C>              <C>          <C>             <C>

YEAR  ENDED JUNE 29, 2001

Revenues from external customers. .  $140,500   $       76,875   $   24,399   $          --   $ 241,774
Intersegment revenues . . . . . . .        --           59,405           --         (59,405)         --
Interest expense. . . . . . . . . .     7,179            2,211        6,421          (4,580)     11,231
Depreciation and amortization . . .     1,578            1,961        6,260              --       9,799
Segment profit (loss) before
   reorganization costs, income
   taxes and earnings in affiliates   (63,881)         (71,961)     (14,245)        (10,720)   (160,807)
Segment assets. . . . . . . . . . .    43,285           34,089      136,606        (117,628)     96,352
Expenditures for segment assets . .       171              735          333              --       1,239

THREE MONTHS ENDED SEPTEMBER
29, 2001

Revenues from external customers. .  $ 18,969   $        2,138   $    5,137   $          --   $  26,244
Intersegment revenues . . . . . . .        --            9,616           --          (9,616)         --
Interest expense. . . . . . . . . .       214               --           --              --         214
Depreciation and amortization . . .       445              274           29              --         748
Segment profit (loss) before
   income taxes and earnings in
   affiliates . . . . . . . . . . .      (712)             356         (246)            344        (258)
Segment assets. . . . . . . . . . .    32,810           26,676       42,714         (25,594)     76,606
Expenditures for segment assets . .        --               42           34              --          76

NINE MONTHS ENDED JUNE 28,
2002

Revenues from external customers. .  $ 58,022   $        6,212   $   18,584   $          --   $  82,818
Intersegment revenues . . . . . . .        --           33,059           --         (33,059)         --
Interest expense. . . . . . . . . .       824                1           --              --         825
Depreciation and amortization . . .       208              181           59              --         448
Segment profit (loss) before
   income taxes and earnings in a
   affiliates . . . . . . . . . . .        48            3,368       (1,169)           (896)      1,351
Segment assets. . . . . . . . . . .    35,749           27,020       61,191         (31,211)     92,749
Expenditures for segment assets . .       113                6           36              --         155


YEAR  ENDED JUNE 27, 2003

Revenues from external customers. .  $ 59,188   $       11,621   $   21,331   $          --   $  92,140
Intersegment revenues . . . . . . .         0           30,613           --         (30,613)         --
Interest expense. . . . . . . . . .       955               --           --              --         955
Depreciation and amortization . . .       292              245          105              --         642
Segment profit (loss) before
   income taxes and earnings in a
   affiliates . . . . . . . . . . .    (2,834)           3,664       (2,488)           (238)     (1,896)
Segment assets. . . . . . . . . . .    25,753           23,971       59,508         (38,297)     70,935
Expenditures for segment assets . .       219               38          150              --         407
</TABLE>


                                      F-27
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Intersegment  revenues  are primarily sales by the manufacturing segment to
the  retail  segment and are transferred at market price. Earnings in affiliates
in  the  consolidated statements of operations relates to the financial services
segment.  The  adjustment  to  intersegment  revenue  is  made  to  eliminate
intercompany  sales  between the manufacturing and retail segments. The interest
expense  adjustment  is  made  to  eliminate  intersegment  interest between the
corporate  and manufacturing and retail segments and to net the interest expense
on  the  floor  plan  credit  facility  against the interest earned. The segment
assets  adjustment  is  primarily  made  up  of  an  adjustment  to  eliminate
subsidiary's  equity  at  the  corporate  level,  a  reclass  of  the floor plan
participation  balance  and  the  elimination  of  intercompany  receivables.

(17) SELECTED  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)

     The  following  presents  a  summary  of  the unaudited quarterly financial
information  for the years ended June 28, 2002 and June 27, 2003 (in thousands):

<TABLE>
<CAPTION>
                                     FIRST        SECOND      THIRD     FOURTH
                                    QUARTER       QUARTER    QUARTER   QUARTER     TOTAL
                                ---------------  ---------  ---------  --------  ---------
<S>                             <C>              <C>        <C>        <C>       <C>
                                        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2002                            PREDECESSOR CO.                SUCCESSOR CO.
-----------------------------------------------  -----------------------------------------
    Revenues . . . . . . . . .  $       26,244   $ 29,057   $ 25,377   $ 28,384  $109,062
    Operating income (loss)               (132)     1,086        111        734     1,799
    Net income (loss). . . . .      156,377 (1)       981       (104)       387   157,641
    Earnings (loss)  per
      share-basic and diluted.             N/A   $   0.10   $  (0.01)  $   0.04  $0.13 (2)

2003                                                     UCCESSOR CO.
                                ----------------------------------------------------------
    Revenues . . . . . . . . .  $       25,354   $ 21,143   $ 22,849   $ 22,794  $ 92,140
    Operating income (loss). .            (138)    (1,039)      (381)       254    (1,304)
    Net income (loss). . . . .            (455)    (1,169)      (455)       265    (1,814)
    Loss per share-basic
       and diluted . . . . . .  $        (0.05)  $  (0.12)  $  (0.05)  $   0.03  $  (0.18)
<FN>
_______________________________
(1)  Includes  Fresh-Start adjustment gain of $19 million and extraordinary gain
     of  $139  million  related  to  debt  forgiveness
(2)  Based  on  net  income of $1.3 million for nine month period ended June 28,
     2002
</TABLE>


                                      F-28
<PAGE>
<TABLE>
<CAPTION>
                              AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES                     SCHEDULE II
                                      VALUATION AND QUALIFYING ACCOUNTS
                                               (IN THOUSANDS)


                                             ADDITIONS
                                            -------------------------------------
                               BALANCE AT   CHARGED TO        CHARGED TO                         BALANCE AT
                                BEGINNING    COSTS AND           OTHER                             END OF
DESCRIPTION                       YEAR       EXPENSES          ACCOUNTS    OTHER    DEDUCTIONS      YEAR
------------------------------------------  -----------       -----------  ------  ------------  -----------
<S>                            <C>          <C>          <C>  <C>          <C>     <C>           <C>
Year ended June 29, 2001
   Warranty and service costs  $     8,749  $    10,587       $        --  $   --  $    16,701   $     2,635
   Restructuring reserve       $     7,458  $       565       $        --  $   --  $     8,023   $        --
   Reorganization costs        $        --  $   179,942  (1)  $        --  $   --  $   176,538   $     3,404

Three months ended
   September 29, 2001
   Warranty and service costs  $     2,635  $       678       $        --  $   --  $     1,168   $     2,145
   Reorganization costs        $     3,404  $        --       $        --  $   --  $     1,527   $     1,877

Nine months ended June 28,
   2002
   Warranty and service costs  $     2,145  $     2,016       $        --  $   --  $     2,343   $     1,818
   Reorganization costs        $     1,877  $        --       $        --  $   --  $    (1,749)  $     3,626

Year ended June 27, 2003
   Warranty and service costs  $     1,818  $     2,024       $        --  $   --  $     1,893   $     1,687
   Reorganization costs        $     3,626  $        --       $        --  $   --  $     2,357   $     1,269
<FN>
_______________________________
(1)  Amount  represents  reorganization costs related to liquidation of non-core
     operational  and  Plan  obligation  costs  accrued  in  December  2000.
</TABLE>


                                      F-29
<PAGE>
                                  EXHIBIT INDEX

     2.1       Debtors'  Third  Amended  and  Restated  Plan  of  Reorganization
               (Incorporated  by  reference  to  Exhibit  99.2  to the Company's
               Current  Report  on  Form  8-K  filed  on  January  8,  2002)

     3.1       Amended  and  Restated  Articles  of Incorporation of the Company
               (Incorporated  by  reference  to  Exhibit  3.1  to  the Company's
               Quarterly  Report  on  Form  10-Q  filed  on  May  10,  2002)

     3.2       Amended  and  Restated  Bylaws  of  the  Company (Incorporated by
               reference  to  Exhibit  3.1  to the Company's Quarterly Report on
               Form  10-Q  filed  on  May  10,  2002)

     3.3       Charter  for  the Audit Committee of the Company, dated September
               19,  2001  (Incorporated  by  reference  to  the Company's Annual
               Report  on  Form  10-K  filed  on  September  24,  2002)

     3.4       Charter  for  the  Compensation  Committee  of the Company, dated
               September  18,  2001  (Incorporated by reference to the Company's
               Annual  Report  on  Form  10-K  filed  on  September  24,  2002)

     10.1      Employment  Agreement,  effective  as  of October 3, 2001, by and
               between  the  Company  and  Finis  F.  Teeter  (Incorporated  by
               reference  to  the  Company's Annual Report on Form 10-K filed on
               September  24,  2002)

     10.2      American  Homestar Corporation 2001 Management Incentive Program,
               effective as of October 3, 2001 (Incorporated by reference to the
               Company's Annual Report on Form 10-K filed on September 24, 2002)

     10.3      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  Finis  F.  Teeter
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.4      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  Craig  A.  Reynolds
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.5      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and Charles N. Carney, Jr.
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.6      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002,  by  and  between  the  Company  and  James  J.  Fallon
               (Incorporated by reference to the Company's Annual Report on Form
               10-K  filed  on  September  24,  2002)

     10.7      Non-Qualified  Stock Option Agreement, effective as of October 3,
               2002, by and between the Company and Jackie Holland (Incorporated
               by reference to the Company's Annual Report on Form 10-K filed on
               September 23, 2003)

     14.1      American  Homestar  Corporation  Code  of  Business  Conduct  and
               Ethics,  adopted  on December 17, 2002 (Incorporated by reference
               to  the  Company's  Quarterly Report on Form 10-Q filed on May 2,
               2003)

     16.1      Letter Regarding Change in Certifying Accountant (Incorporated by
               reference to Exhibit 16.1 to the Company's Current Report on Form
               8-K  filed  on  January  25,  2002)

     21.1*     Subsidiaries  of  American  Homestar  Corporation

     31.1*     Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a))
               for  Finis  F.  Teeter,  Chief  Executive Officer of the Company.

     31.2*     Certification pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a))
               for  Craig  A.  Reynolds,  Chief  Financial  Officer


<PAGE>
     32.1**    Certifications  pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant  to  Section  906  of the Sarbanes-Oxley Act of 2002 for
               Finis  F. Teeter, Chief Executive Officer, and Craig A. Reynolds,
               Chief  Financial  Officer  of  the  Company.


_______________
*     Filed  herewith
**    Furnished  herewith


<PAGE>
                                                                    Exhibit 21.1

                   AMERICAN HOMESTAR CORPORATION SUBSIDIARIES
                   ------------------------------------------


                   ACTIVE SUBSIDIARIES:
                   --------------------
                   American Homestar Financial Services, Inc.
                   American Homestar Mortgage, LLP   (50% - owned)
                   American Homestar of Burleson, LP
                   American Homestar of Lancaster, LP
                   Homestar 21, LLC   (50% - owned)
                   HSTR General Holdings, Inc.
                   HSTR Manufacturing Holdings, Inc.
                   HSTR Retail Holdings, Inc.
                   Humble Springs Ltd. (49.5% - owned)
                   Nationwide Housing Properties, LP
                   Nationwide Housing Systems, LP
                   Oak Creek Homes, LP
                   Oak Creek Housing Properties, LP
                   Roadmasters Transport Company, Inc.   (51% - owned)
                   Western Insurance Agency, Inc.

                   INACTIVE SUBSIDIARIES:
                   ----------------------
                   Amcorp Management Service Company
                   American Homestar of Alabama, Inc.
                   American Homestar of North Carolina, Inc.
                   American Homestar West, Inc.
                   Associated Retailers Group, LP
                   Associated Retailers Holdings, Inc.
                   Brilliant Carriers, Inc.
                   First Value Homes, Inc.
                   Gold Medal Homes, Inc.
                   Gold Medal NC, Inc.
                   Homexpress, Inc.
                   Lifestar Reinsurance Limited
                   Nationwide NC Homes, Inc.
                   Nationwide of Alabama, Inc.
                   Nationwide West, LP
                   Pacific II Northwest Homes, Inc.
                   Pacific Northwest Homes, Inc.
                   Paradise Mortgage, Inc.
                   R-Anell Custom Homes, Inc.


All entities are 100% owned except where indicated to the contrary.


<PAGE>