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

                                    FORM 10-K

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934
          For  the  fiscal  year  ended  June  28,  2002

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

             Securities to be 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  [ ]   No  [X]

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  [ ].

The estimated aggregate market value of voting and non-voting common equity held
by  non-affiliates  of  the registrant is not determinable as there have been no
sales  and  no  quoted  bid and asked prices within 60 days prior to the date of
this  filing.

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 24, 2002 the registrant had 100 shares of Series M Common Stock,
par  value  $.01  per  share, and 3,922,280 shares of Series C Common Stock, par
value  $.01  per share, issued and outstanding, and 6,077,720 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.

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<PAGE>
<TABLE>
<CAPTION>
                                    TABLE OF CONTENTS


                                          PART I


                                                                                       PAGE
                                                                                       ----
<S>                                                                                    <C>
Item 1.     Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
Item 2.     Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 3.     Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 4.     Submission of Matters to a Vote of Security Holders . . . . . . . . . . .   9


                                          PART II

Item 5.     Market for Registrant's Common Equity and Related Shareholder Matters . .  10
Item 6.     Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . .  11
Item 7.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . .  12
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk. . . . . . . .  25
Item 8.     Financial Statements and Supplementary Data . . . . . . . . . . . . . . .  26
Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial
            Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

                                         PART III

Item 10.     Directors and Executive Officers of the Registrant . . . . . . . . . . .  27
Item 11.     Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . .  29
Item 12.     Security Ownership of Certain Beneficial Owners and Management . . . . .  34
Item 13.     Certain Relationships and Related Transactions . . . . . . . . . . . . .  35


                                          PART IV

Item 14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . .  36
</TABLE>


<PAGE>
                                     PART I


ITEM  1.  BUSINESS

GENERAL

     American  Homestar  Corporation ("American Homestar" or the "Company") is a
regional  vertically integrated manufactured housing company, with operations in
manufacturing,  retailing,  transportation, financing and insurance. The Company
was  incorporated  in Texas in July 1983. The Company currently operates two new
home manufacturing facilities and sells homes through its dedicated distribution
channels,  which  include  40  retail sales centers, a smaller sales center in a
manufactured housing community and approximately 20 independent retail locations
in  five  states.  A third manufacturing facility is currently used to refurbish
lender  repossessions.

     Starting  in  July 1994, the Company had undertaken a strategy of expanding
into  several  new  regional  markets  (outside  of  its  core Southwest base of
operations)  by  acquiring  manufacturing capacity and growing its Company store
network (through acquisition and new formation) to support its expanded regional
presence. Many of the Company's 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 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 its retail operations and diminishing
profitability  in  its  manufacturing  operations, the Company adopted a plan to
retract  its operations, with the goal of discontinuing Company store operations
in all non-core markets and focusing management and resources on what it defined
as  its  core  Southwest  market  (Texas  and  the  surrounding  states).

REORGANIZATION

     On  January  11,  2001, the Company 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, 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.  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 4,999,900 shares underlie options authorized
under  the  Company's 2001 Management Incentive Program.   Options for 4,949,900
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.

     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 coincides with
the  end  of  the  Company's  first  fiscal quarter.  The Company elected to use
September  29,  2001,  its quarter end, as its Fresh-Start Reporting date versus
the  Effective  Date  of  the Plan, October 3, 2001, as interim activity was not


                                        1
<PAGE>
material  to the Consolidated Fresh-Start Balance Sheet. Accordingly, all assets
and  liabilities  were  restated  to  reflect  their reorganization value, which
approximates  the fair value of the assets and liabilities at the Effective Date
and  its  capital  structure  was  recast  in  conformity  with  the  Plan.  The
adjustment  to  eliminate the accumulated deficits 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 (referred to 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 effects of Fresh-Start
Reporting  (referred  to  as  "Successor  Company"  for  periods  subsequent  to
September  29, 2001). As a result, the net income for the nine months ended June
28,  2002 is not comparable with prior periods and the net income for the fiscal
year  ended  June  28,  2002  is  divided into Successor Company and Predecessor
Company  and is also not comparable with prior periods. In addition, the Balance
Sheet  as  of  June  28, 2002 is not comparable to prior periods for the reasons
discussed  above.

     The  reorganization  value  of the Company's common equity of approximately
$30  million  at  September 29, 2001, 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 was allocated to various asset categories
pursuant  to  Fresh-Start  accounting  principles.

STRATEGY

     In  connection  with  its  reorganization,  the  Company  has significantly
downsized  its operations and has focused on its core Southwest market where the
Company  is  based  and where it has historically had its most favorable overall
results.  The  Company  currently operates 40 retail sales centers and a smaller
sales  center  in  a  manufactured housing community.  The Company also operates
three  manufacturing  plants,  two  of  which  produce new homes while the third
refurbishes  lender  repossessions.  Additionally,  the  Company  operates  an
insurance  agency,  which sells homeowner's insurance, credit life insurance and
extended  warranty  coverage  to  its  customers.  The  Company  also  has a 51%
ownership  interest  in  a  transport  company,  which  specializes  in  the
transportation  of manufactured and modular homes and offices.  In addition, the
Company  has a 50% interest in a finance company, which specializes in providing
chattel and land/home financing to the Company's customers. The Company recently
invested  in  a  50%  owned  mortgage  brokerage  business to allow it to better
control  the  placement  of  its  traditional mortgage business and to realize a
portion of the net profits relating to this business. Most recently, the Company
has  aligned  itself  with  several subdivision developments to meet an emerging
market segment in its market region and to gain greater market share. Management
believes that its regional vertical integration strategy, which derives multiple
profit  sources  from  each  retail  sale,  will  allow  the  Company to be more
successful,  over  time,  than  would  otherwise  be  the  case.

INDUSTRY

     A  manufactured  home is a 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 $9.4
billion  in  2001.  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,  and 2001 factory
shipments  declined  to  approximately 349,000, 251,000 and 193,000 respectively
and  estimated shipments for the year 2002 are expected to decline even further.
In  2001,  manufactured  homes  accounted  for  approximately  18%  of  all  new
single-family  homes  completed  in  the  United  States,  up  slightly  from
approximately  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 2001 was
$31.69  per  square  foot,  as  compared  to  $70.66  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 75% of the
manufactured  homes  produced  in  2001.


                                        2
<PAGE>
     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.

     In  addition  to  the  changes in the chattel lending environment described
above,  new  Texas legislation (HB 1869), effective January 1, 2002 requires any
land/home  package to be closed and financed in the same manner as a traditional
mortgage  financing for site-constructed housing.  Chattel financing can be used
only in cases where the home is being sited on leased land. This has resulted in
a  noticeable  shift  from  traditional  industry  lenders  to more conventional
mortgage  loan  providers  at  interest  rates  virtually  the  same  as  for
site-constructed  homes.  This  has  also  resulted in a significant increase in
potential  loan  providers and has afforded the manufactured housing industry in
Texas  with  continued  access  to  guaranteed loan programs of both the Federal
Housing Administration and the Department of Veterans Affairs as well as special
programs  offered  through  the  Federal  National  Mortgage Association and the
Federal  Home  Loan  Mortgage  Corporation.

     The  Company  believes  that  the recent significant changes in the lending
environment  described  above  and,  especially,  the  shift  toward traditional
mortgage  financing  sources  will  enhance  the  relative  affordability of its
products  as  compared  to  site-constructed  homes.

RETAIL  DISTRIBUTION

     The  Company  currently  sells  its  products  through  various  retail
distribution channels, primarily Company-operated retail sales centers, but also
including  independent  retailers  and  subdivisions.  Franchise operations were
discontinued as a part of the Company's reorganization. The following table sets
forth,  for  the  periods  indicated,  certain  data  for  shipments  of  homes
manufactured  by  the  Company  to  Company-operated retail sales centers and to
independent  retail  sales  centers,  including  franchisees,  and the number of
Company-operated  retail  sales  centers  and the number of joint venture retail
sales  centers:

<TABLE>
<CAPTION>
                                                    YEARS ENDED     THREE MONTHS    NINE MONTHS
                                                ------------------      ENDED          ENDED
                                                JUNE 30,  JUNE 29,  SEPTEMBER 29,    JUNE 28,
                                                  2000      2001        2001           2002
                                                --------  --------  -------------  -------------
                                                          PREDECESSOR CO.          SUCCESSOR CO.
                                                ---------------------------------  -------------
<S>                                             <C>       <C>       <C>            <C>
Manufacturing shipments to Company-operated
  retail sales centers . . . . . . . . . . . .     4,569     1,824            292          1,014
Manufacturing shipments to independent retail
  sales centers, (including franchisees for
  Predecessor Company) . . . . . . . . . . . .     5,830     1,832             51            162
                                                --------  --------  -------------  -------------
    Total homes shipped. . . . . . . . . . . .    10,399     3,656            343          1,176
                                                ========  ========  =============  =============

Company-operated retail sales locations and
  community sales centers at end of period . .       111        41             41             41
Joint venture retail sales centers . . . . . .        11        --             --             --
</TABLE>

     The  Company  employs  a distinct merchandising and selling strategy in its
distribution  channels.  At  each  Company-operated  retail sales center a broad
selection  of  fully  furnished  and  professionally  decorated  model  homes is
displayed  in  a  landscaped  setting.  The  Company's  professional sales staff
receives  continuous  training on all of the Company's products and services and
is  therefore  able  to provide customers with a positive buying experience. The
Company  also  provides merchandising support and uses regional print, radio and
occasional  television advertising to promote customer awareness and enhance the
Company's  quality  image.


                                        3
<PAGE>
     In  fiscal  2002,  70%  of  the  Company's  new  home  retail  sales  were
multi-section  homes and its average new home retail sales price was $53,584 for
Department  of Housing and Urban Development ("HUD") code homes, compared to the
industry  average of $48,800.  The Company currently operates 40 retail centers,
of  which 35 are in Texas, three are in Louisiana and two are in Oklahoma, along
with  a  small  sales  center  in  a  Texas  manufactured  housing  community.

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

<TABLE>
<CAPTION>
                                                    YEARS ENDED         THREE MONTHS      NINE MONTHS
                                               ----------------------      ENDED             ENDED
                                                JUNE 30,    JUNE 29,    SEPTEMBER 29,      JUNE 28,
                                                  2000        2001          2001             2002
                                               ----------  ----------  ---------------  ---------------
                                                          Predecessor Co.                Successor Co.
                                               ---------------------------------------  ---------------
<S>                                            <C>         <C>         <C>              <C>
Average new home sales price - HUD code . . .  $  55,095   $  54,823   $       51,403   $       53,584
Homes sold:
     New homes. . . . . . . . . . . . . . . .      5,831       2,499              373            1,001
     Previously-owned homes . . . . . . . . .      2,196         964              149              555
Percentage of new homes sold:
     Single-section . . . . . . . . . . . . .         28%         29%              34%              28%
     Multi-section. . . . . . . . . . . . . .         72%         71%              66%              72%
Percentage of new homes sold manufactured by:
     Company. . . . . . . . . . . . . . . . .         89%         98%             100%              99%
     Independent manufacturers. . . . . . . .         11%          2%               0%               1%
</TABLE>

     Independent Retailers.  The Company currently sells to approximately twenty
independent  retailers  located in Colorado, Louisiana, New Mexico, Oklahoma and
Texas.  The  Company  believes  its  relations  with  its  existing  independent
retailers  are good.  The Company has no written agreements with its independent
retailers  and  either  party  may  terminate  the relationship at any time. The
Company  generally  does  not  provide  inventory  financing  arrangements  for
independent  retailer  purchases,  nor does it consign homes. In accordance with
customary  business  practice  in the manufactured housing industry, the Company
has  entered  into repurchase agreements with various financial institutions and
other  credit  sources  under  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 their 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  losses.  At  June  28,  2002  the  Company was at risk to repurchase
approximately  $2.9 million of manufactured homes and has provided for estimated
net  repurchase  losses  of  approximately  $0.2  million.

MANUFACTURING

     The  Company  manufactures a broad selection of HUD code homes ranging from
traditional, lower-priced homes to distinctive, higher-priced homes. The Company
is  starting to produce modular homes in its core market area. The Company's HUD
code  homes  retail from $16,900 to $125,400, excluding land costs. By providing
such  a  broad  selection,  the  Company  believes it can meet the financial and
aesthetic  requirements  of  the full range of retail buyers.  Additionally, the
Company  believes  it offers high quality homes that incorporate more innovative
architectural  designs  and  features  than  are  typically  offered  by  its
competitors.  Over the past several years, as the demand for multi-section homes
has  increased,  the  Company  has  significantly  increased  its  production of
multi-section  homes  to 73% of total homes manufactured in fiscal 2002, up from
50%  in  fiscal  1994.


                                        4
<PAGE>
     The Company's manufacturing facilities generally operate on a one shift per
day,  five-day per week basis. At June 28, 2002, the Company's two operating new
home  production  facilities had the capacity to produce approximately 20 floors
per  day,  and the production rate was approximately 10 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>
                              YEARS ENDED      THREE MONTHS   NINE MONTHS
                           ------------------     ENDED          ENDED
                           JUNE 30,  JUNE 29,  SEPTEMBER 29,    JUNE 28,
                             2000      2001        2001           2002
                           --------  --------  -------------  -------------
                                   Predecessor Co.            Successor Co.
                           ---------------------------------  -------------
<S>                        <C>       <C>       <C>            <C>
Homes manufactured:
     Single-section . . .     2,225       535            111            306
     Multi-section. . . .     8,174     3,121            232            870
                           --------  --------  -------------  -------------
Total homes manufactured.    10,399     3,656            343          1,176
                           ========  ========  =============  =============

Total floors manufactured    19,160     6,777            575          2,046
                           ========  ========  =============  =============
</TABLE>

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

     The  Company  generally builds a home only after an order has been received
and  wholesale  retailer  financing  arrangements for payment 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  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. The
Company's backlog, as well as level of new orders, generally declines during the
winter  months  of  December  through  February.

FINANCING

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

     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  is  a mortgage broker/loan originator for ultimate loan placement with
Home  Loan and other mortgage banks. Homestar Mortgage will not bear any lending
risk on loans it originates. The Company accounts for its investment in Homestar
Mortgage  using  the  equity  method.

     To  ensure that the Company remains fully competitive and has access to all
retail  financing  products  available, the Company maintains 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 numerous sources. The Company believes that
these relationships afford it access to a broader range of competitive financing
programs  which,  in  turn,  may  result  in  increased  retail  sales.


                                        5
<PAGE>
INSURANCE

     Through  its  wholly-owned  subsidiary,  Western  Insurance  Agency,  Inc.
("Western"),  the  Company offers to its retail customers a variety of insurance
products,  including  property and casualty insurance, credit life insurance and
extended  service contracts. The Company acts as the agent and earns commissions
and  profit-sharing bonuses, in favorable loss years, from insurance written for
purchasers  of  its  manufactured  homes.

     Through its wholly-owned subsidiary, Lifestar Reinsurance Ltd. ("Lifestar")
the Company underwrote the risk as to credit life policies it sold and shared in
the profits of the property and casualty insurance it sold in years where actual
loss  experience  was  favorable.  The  Company  elected  to cease operations in
Lifestar  in  May,  2002  because  the  life insurance underwriting activity was
producing  steadily  declining  returns.  Instead  the  Company  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  the  Company's  manufacturing
facilities.  Roadmasters  operates through independent owner-operators, allowing
operations  over  a  large geographic area with no investment in equipment.  The
Company believes that its controlling ownership interest in Roadmasters provides
it  with the ability to better control the delivery of homes to its retail sales
centers  and to independent retailers, especially during peak sales and delivery
periods,  as  well  as  to  profit  from  each  home  shipment.

COMPETITION

     The  manufactured  housing  industry  is highly competitive and the capital
requirements  for  entry  are relatively modest. Manufactured homes compete with
new  and  existing  site-built  homes,  apartments, townhouses and condominiums.
Competition  exists  at  both  the  manufacturing and retail levels and is based
primarily  on  price,  product  features,  reputation  for  service and quality,
location,  depth  of  field inventory, sales promotions, merchandising and terms
and  availability  of  dealer  and  retail  customer  financing.

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, establishing comprehensive
national  construction  standards.  These  regulations  cover  all  aspects  of
manufactured  home  construction,  including  structural integrity, fire safety,
wind  loads,  thermal  protection  and  ventilation. The Company's manufacturing
facilities  and the plans and specifications of its manufactured homes have been
approved  by  a  HUD-designated  inspection  agency.  The  Company's  homes  are
regularly  checked  by  an  independent,  HUD-approved  inspector for compliance
during  construction.  Failure  to  comply with applicable HUD regulations could
expose  the  Company to a wide variety of sanctions, including mandated closings
of Company manufacturing facilities. The Company believes its manufactured homes
meet  or  surpass  all  present  HUD  requirements.

     The  Company  is  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.  The
Company  believes  its  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


                                        6
<PAGE>
components of its homes. The CPSC, the Environmental Protection Agency and other
governmental  agencies  currently  are re-evaluating the allowable standards for
formaldehyde  emissions.  The  Company  uses materials in its manufactured homes
that meet the current HUD standards for formaldehyde emissions and believes that
it  otherwise  complies  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. The Company has established comprehensive programs for
complying with health and safety regulations. While the Company believes that it
operates  its  manufacturing  facilities  safely  and prudently, there can be no
assurance  that  accidents  will  not  occur  or that the Company will not incur
liability  in  connection  with  the  operation  of  its  business.

     The  Company's  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.  Manufactured  homes  in Texas that are not to be
placed  in  a manufactured home rental community are subject to Texas House Bill
1869,  which  requires  them to be closed and financed like traditional mortgage
loans.  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.

     The  Company  is also subject to the provisions of the Fair Debt Collection
Practices Act, which regulates the manner in which the Company collects payments
on  installment  sale  contracts,  and  the Magnuson-Moss Warranty-Federal Trade
Commission  Improvement  Act,  which regulates the descriptions of warranties on
products. The Company's 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.

     The  Company's 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. The Company is
not  aware  of  any pending litigation to which it is a party or claims that may
result  in significant contingent liabilities related to environmental pollution
or asbestos. In addition, the Company does not believe it will be required under
existing environmental laws and enforcement policies to expend amounts that will
have  a  material  adverse  effect  on  its  results  of operations or financial
condition.


                                        7
<PAGE>
     A  significant  portion of the Company's manufacturing labor force includes
persons who are not U.S. citizens, and the Company is subject to the regulations
of  the  Immigration  and Naturalization Service ("INS"). The Company adheres to
the procedures required for the prevention of the hiring of illegal aliens, but,
nonetheless,  the  Company has from time to time experienced losses of a portion
of  its  labor  force  due  to  INS  investigative operations, which 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 28, 2002, the Company employed 770 persons, compared to 727 persons
at June 29, 2001. The Company does not have any collective bargaining agreements
and  has  not  experienced any work stoppages as a result of labor disputes. The
Company  considers  its employee relations to be good.  A significant portion of
the  total  compensation  of 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 the Company's managers are participants in the option grants
of  Series  M common stock under the Company's 2001 Management Incentive Program
established  by  the  Plan.

OTHER  INFORMATION  ABOUT  THE  COMPANY

     The  Company  is  subject  to  the reporting requirements of the Securities
Exchange  Act of 1934. During its reorganization, the Company did not prepare or
file annual or quarterly reports with the Securities and Exchange Commission but
instead  filed  Monthly Operating Reports with the Bankruptcy Court, as required
by  the  Bankruptcy  Code. The Company also filed its Monthly Operating Reports,
its confirmed Plan and its audited Fresh-Start balance sheet with the Securities
and  Exchange  Commission.  The Company intends to file the annual and quarterly
reports  for  the periods during reorganization with the Securities and Exchange
Commission  as  soon  as practicable. 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.  The public 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 that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC at
http://www.sec.gov.  The  Company's  website  is  www.americanhomestar.com.


                                        8
<PAGE>
ITEM  2.  PROPERTIES

     At  June  28,  2002,  the  Company  operated  two  new  home  manufacturing
facilities and one refurbishment facility in Texas, 40 retail sales centers, one
small  sales  center  in  a manufactured housing community and an administrative
office.  Twenty-eight  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. The Company owns the
remaining  retail  sales  centers. The Company's 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. The Company's retail sales centers are located in
three states as follows: Louisiana (3), Oklahoma (2), and Texas (35), along with
one  small  sales  center  in  a  manufacturing  housing community in Texas. The
Company  believes that all facilities are adequately maintained and suitable for
their  present  use.

     The  Company  owns  all  of  its  manufacturing facilities (including those
classified  as  assets held for sale) and substantially all of its 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
  Vicksburg, Mississippi . . . . . . . . . . . . . .  September 1996      118,700
  Brilliant, Alabama . . . . . . . . . . . . . . . .  June 1997           127,500
  Guin, Alabama. . . . . . . . . . . . . . . . . . .  June 1997           136,400
  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  routine  litigation incidental to the business, which
management  believes  is  not  material  to its business or financial condition.

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

     None.


                                        9
<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  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  24,  2002,  there  were  76  specific record holders of the Company's
Series C common stock, which holders have been issued 3,922,280 shares of Series
C  common  stock.  The remaining 6,077,720 shares are being held in constructive
trust for the benefit of shareholders to be determined in name and amount as the
claims process is completed.   The Company anticipates that the 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 10 million shares are issued.

     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
24,  2002.  Additionally,  4,949,900  shares  of  Series M common stock underlie
options  granted to management under the 2001 Management Incentive Program 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.

     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

     The  Company  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 its 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

     The  following  unregistered sales of the Company's old par value $0.05 per
share  common  stock (the "Old Common Stock") were made in reliance upon Section
4(2)  of  the  Securities  Act of 1933 based on isolated sales by the Company in
connection with acquisitions of related businesses, all of which were made prior
to the Company's reorganization.  Under the Plan, all shares of Old Common Stock
were cancelled in connection with the Company's reorganization under Chapter 11.
Pursuant  to the exemption set forth in Section 1145 of the Bankruptcy Code, the
Company issued 10 million 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.

     On  September  30,  1999,  pursuant  to  certain earn out provisions of the
R-Anell  Custom Homes, Inc. stock purchase agreement, the Company issued 375,000
shares  of the Company's Series A convertible preferred stock (the "Old Series A
Stock").  Each share of Old Series A Stock was convertible into one share of the
Company's  Old  Common Stock from April 2, 2001 to October 1, 2001. These shares
were  cancelled  upon  the  effective  date  of  the  Plan.

     On  February  8, 2000, the Company entered into a settlement agreement with
DWP Management, Inc. pursuant to which, among other things, the Company acquired
the  remaining  20%  interest in Pacific Northwest Homes, Inc. The original note
payable was cancelled. The Company acquired the remaining 20% interest, for cash
and  134,167  of  the  Company's Old Series A Stock. These shares were cancelled
upon  the  effective  date  of  the  Plan.


                                       10
<PAGE>
ITEM  6.  SELECTED  FINANCIAL  DATA

     The  financial information set forth under Statement of Operations Data and
Balance Sheet Data for each of the fiscal years ended May 31, 1998 and 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 and nine months ended June 28, 2002 have been audited by Mann
Frankfort  Stein  &  Lipp CPAs, L.L.P, independent certified public accountants.
The  Consolidated Financial Statements as of June 30, 2000, June 29, 2001, three
month  period ended September 29, 2001 and nine month period ended June 28, 2002
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>
                                                                   ONE MONTH       YEARS ENDED       THREE MONTHS    NINE MONTHS
                                                  YEARS ENDED        ENDED    ---------------------      ENDED          ENDED
                                                    MAY 31,         JUNE 30,   JUNE 30,   JUNE 29,    SEPTEMBER 29,    JUNE 28,
                                                1998       1999       1999      2000        2001          2001          2002
                                              ---------  ---------  --------  ---------  ----------  --------------  -------------
                                                                       PREDECESSOR CO.                               SUCCESSOR CO.
                                              ------------------------------------------------------------------------------------
<S>                                           <C>        <C>        <C>       <C>        <C>         <C>             <C>
                                                                    (in thousands, except per share amounts)
STATEMENT OF OPERATIONS DATA:
Revenues:
  Net sales. . . . . . . . . . . . . . . . .  $481,947   $612,086   $49,272   $532,634   $ 217,375   $      21,107   $    64,234
  Other revenues . . . . . . . . . . . . . .    31,992     41,957     3,493     41,402      24,399           5,137        18,584
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
    Total revenues . . . . . . . . . . . . .   513,939    654,043    52,765    574,036     241,774          26,244        82,818
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------

Costs and expenses:
  Cost of sales. . . . . . . . . . . . . . .   381,435    477,717    40,214    446,378     174,999          16,086        52,184
  Selling, general and administrative. . . .    91,772    134,682    12,487    153,769      77,948          10,290        28,703
  Restructuring charges, goodwill and asset
    impairments(1) . . . . . . . . . . . . .        --         --        --     22,097     139,216              --            --
  Acquisition costs(2) . . . . . . . . . . .     2,425         --        --         --          --              --            --
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
      Total costs and expenses . . . . . . .   475,632    612,399    52,701    622,244     392,163          26,376        80,887
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
      Operating income (loss). . . . . . . .    38,307     41,644        64    (48,208)   (150,389)           (132)        1,931
Interest expense . . . . . . . . . . . . . .    (7,382)   (13,845)   (1,487)   (18,366)    (11,231)           (214)         (825)
Other income (expense) . . . . . . . . . . .       (50)       110        19       (566)        813              88           245
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
      Income (loss) before items shown
        below. . . . . . . . . . . . . . . .    30,875     27,909    (1,404)   (67,140)   (160,807)           (258)        1,351
Reorganization items:
  Fresh-Start adjustments. . . . . . . . . .        --         --        --         --          --          18,863            --
  Reorganization costs . . . . . . . . . . .        --         --        --         --      (2,796)         (1,433)           --
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
      Income (loss) before items shown
        below. . . . . . . . . . . . . . . .    30,875     27,909    (1,404)   (67,140)   (163,603)         17,172         1,351
Income tax expense (benefit) . . . . . . . .    13,546     11,472      (462)   (20,141)     16,239              20           247
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
      Income (loss) before items shown
        below. . . . . . . . . . . . . . . .    17,329     16,437      (942)   (46,999)   (179,842)         17,152         1,104
Earnings (losses) in affiliates. . . . . . .     1,211      1,602        49       (350)        492             145           409
Minority interest in income of consolidated
     subsidiaries. . . . . . . . . . . . . .      (223)       (98)      (20)      (242)        142             (50)         (249)
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
       Income (loss) before items shown
         below . . . . . . . . . . . . . . .    18,317     17,941      (913)   (47,591)   (179,208)         17,247         1,264
Extraordinary item, net of income tax
     benefit(3). . . . . . . . . . . . . . .      (634)        --        --         --          --         139,130            --
                                              ---------  ---------  --------  ---------  ----------  --------------  ------------
       Net income (loss) . . . . . . . . . .  $ 17,683   $ 17,941   $  (913)  $(47,591)  $(179,208)  $     156,377   $     1,264
                                              =========  =========  ========  =========  ==========  ==============  ============

Earnings (loss) per share before
     extraordinary item - basic and diluted.  $   1.01   $   0.96   $ (0.05)  $  (2.59)  $     N/A   $         N/A   $      0.13
Earnings (loss) per share - basic and
     diluted . . . . . . . . . . . . . . . .  $   0.98   $   0.96   $ (0.05)  $  (2.59)  $     N/A   $         N/A   $      0.13
Weighted average shares outstanding -
     basic and diluted . . . . . . . . . . .    18,135     18,669    18,586     18,423         N/A             N/A    10,000,100

BALANCE SHEET DATA (END OF FISCAL YEAR):
Working capital. . . . . . . . . . . . . . .  $ 58,867   $ 60,859   $   N/A   $ 39,993   $  27,094   $      11,797   $    32,134
Total assets . . . . . . . . . . . . . . . .   273,696    439,316       N/A    362,233      96,352          76,606        92,749
Total debt . . . . . . . . . . . . . . . . .   107,491    216,845       N/A    208,176      24,462          21,102        21,703
Shareholders' equity . . . . . . . . . . . .  $ 98,463   $135,465   $   N/A   $ 92,902   $ (91,327)  $      30,179   $    49,813
<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  changes,  goodwill  and  asset impairments related to the closing or idling of
        manufacturing plants and non-core  retail  operations  in  fiscal  2001.
(2)     Acquisition  costs  are  non-recurring  transaction  costs  related  to  acquisition.
(3)     Extraordinary  losses  on early extinguishments of debt in fiscal 1998 and extraordinary gain for forgiveness of debt in
        fiscal  2002.
</TABLE>


                                       11
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     This  Form 10-K contains certain forward-looking statements and information
relating  to  the  Company  that  are  based  on  the  beliefs  of the Company's
management as well as assumptions made by and information currently available to
the  Company's  management.  When used in this document, the words "anticipate,"
"believe,"  "estimate,"  "should,"  and "expect" and similar expressions as they
relate  to  the  Company  or  management of the Company are intended to identify
forward-looking  statements.  Such  statements  reflect the current views of the
Company  with  respect  to  future  events  and  are  subject  to certain risks,
uncertainties  and  assumptions,  including  the  risk  factors described in the
Company's  most  recently  filed  registration statement.  Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect,  actual  results  may  vary materially from those described herein as
anticipated,  believed,  estimated  or expected.  The Company does not intend to
update  these  forward-looking  statements.

GENERAL

     American  Homestar is a regional vertically integrated manufactured housing
company  with  operations  in  manufacturing,  retailing,  home  transportation
services, home financing and insurance. The Company has its principal operations
in Texas, although it also sells its products in neighboring states. The Company
manufactures  a  wide  variety  of  manufactured  homes  from  two  of its three
manufacturing  facilities. The third manufacturing facility is primarily engaged
in  refurbishing  manufactured  homes  obtained  through  lender  repossessions.

     The  Company's  products  are sold through 40 Company-operated retail sales
centers in Texas, Louisiana and Oklahoma, one non-owned residential community in
Texas,  and  several  independent  dealers. In addition, the Company facilitates
installment  financing by purchasers of manufactured homes from its retail sales
centers.  The  Company  also  offers  retail  customers  a  variety of insurance
products,  including  property  casualty  insurance,  credit  life insurance and
extended  warranty  coverage  through  both  its  Company-operated  retail sales
centers  and  certain  independent  retailers.  The  Company  also  offers
transportation  services  to  its  customers.

REORGANIZATION

     On  January  11,  2001 (the "Petition Date"), American Homestar Corporation
(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 its ongoing business operations
primarily  in  Texas, Louisiana and Oklahoma, and continued sales to independent
dealers  in  New Mexico, Arkansas and Colorado. The Company continued to use its
manufacturing  facilities  in North Texas and to operate approximately 40 retail
store operations. 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
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.  The Company also has the authority to issue 7.5


                                       12
<PAGE>
million  shares  of Series M common stock to management, 100 shares of which had
been issued as of June 28, 2002 and 4,999,900 shares underlie options authorized
under  the  Company's 2001 Management Incentive Program.   Options for 4,949,900
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.

     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  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: 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). Certain of the
Company's  affiliates have discontinued or will discontinue doing business under
the terms of the Plan. Holders of unsecured claims against discontinued 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 will receive Series C common stock in
the  Company.  The  stock will be issued by the Company, without regard to which
subsidiary  actually  owing  the  claim.

     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
revolving  credit  facility  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 of approximately $4.2
million  at  June  28, 2002, which is included in restricted cash on the balance
sheet  included  in  the  Company  financial statements). The loan has a maximum
limit  of $38 million, although the available amount under the loan varies based
on various covenants and other requirements. The Company estimates that the loan
has  a  maximum  potential  advancement  of  $23  to $24 million, of which $20.7
million  was  advanced  as  of June 28, 2002.  In addition to this facility, the
secured  lender issued certain other shorter-term loan accommodations to provide
for  the  acquisition  of  certain  specified  inventory  by  the Company or its
affiliates.

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  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.


                                       13
<PAGE>
SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

PRINCIPLES  OF  CONSOLIDATION  AND  GENERAL

     The  consolidated  financial statements include the accounts of the Company
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 2002 presentation. The
Company  also owns a 50% interest in a joint venture (Homestar 21st, LLC), which
is  accounted  for  under the equity method of accounting.  The Company recently
formed a second 50% owned joint venture (American Homestar Mortgage), which will
also  be  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  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  the  Company's  Balance  Sheets:

          -    Property  Plant  and Equipment is reflected at its estimated fair
               market value at 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 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;


                                       14
<PAGE>
     -    there is a financial commitment (i.e. an approved floor plan source,
          cash or cashiers check received in advance);
     -    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.

     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 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. The
Company  has  six 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. 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 carrying values of such 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 2000 and 2001, the Company 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. 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.

     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. 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 2000 and
2001,  the Company recorded goodwill write-off of approximately $14.6 million in
fiscal  2000  and  approximatley  $63.9  million  in  fiscal  2001.


                                       15
<PAGE>
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 years ended June 30, 2000, June 29, 2001, the
three  months  ended September 29, 2001 and the nine months ended June 28, 2002,
warranty  and  service  costs  were $27.7 million, $ 10.6 million, $0.7 million,
$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  bid and asked prices for the 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.  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.


                                       16
<PAGE>
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 is effective for
fiscal  years  beginning  after  December  15,  2001,  and  we do not expect its
adoption  will  have  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 will be effective for financial
statements  issued for fiscal years beginning after June 15, 2002, and we do not
expect  its  adoption  will have 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 OperationsReporting 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  are  effective  for  financial  statements  issued  for  fiscal years
beginning after December 15, 2001, and we do not expect its adoption will have a
material  impact  on  our  financial  condition  or  results  of  operations.

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 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. As a result, the net
income  for  the  nine  months  ended June 28, 2002 is not comparable with prior
periods  and the net income for the twelve months ended June 28, 2002 is divided
into  Successor  Company  and  Predecessor  Company  periods  and  is  also  not
comparable  with  prior  periods.  In addition, the Balance Sheet as of June 28,
2002  is  not  comparable  to  prior  periods  for  the reasons discussed above.

     In  connection  with  its  reorganization,  the  Company  has significantly
downsized its operations and has focused on its core Southwest market, where the
Company  is  based  and where it has historically had its most favorable overall
results.  The  Company  currently  operates  40 retail sales centers and a sales
operation  in a manufactured housing community.  The Company also operates three
manufacturing  plants,  two  of which are producing new homes while the third is
used  to refurbish manufactured homes obtained through lender repossessions, and
an  insurance  agency,  which sells homeowner's insurance, credit life insurance
and  extended  warranty coverage to its customers.  In addition, from March 1995
to  May  2002  the  Company  operated a reinsurance company, which reinsures the
credit  life  and  extended  warranty  policies sold, and allowed the Company to
participate  in additional homeowner insurance profits in years where losses are
lower  than  expected.  The  Company  also  has  a  51%  ownership interest in a
transport  company,  which  specializes  in  the  transportation of manufactured
homes, modular homes and offices, and a 50% interest in a finance company, which
specializes  in  providing  chattel  and  land/home  financing  to the Company's
customers.  The Company also has a 50% interest in a mortgage brokerage business
which  is  currently  in  formation.  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  recent  events  have,  in  management's  opinion,  had  a
dampening  effect  on  new home sales and revenues for the six months ended June
28, 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


                                       17
<PAGE>
addition,  new  Texas  legislation  (HB  1869)  effective  January  1, 2002, now
requires  any  land/home  package  to be closed and financed in a fashion nearly
identical  to traditional mortgage financing for site-constructed housing.  This
legislation  has  led to a much longer and more complex credit approval and loan
closing cycle than existed prior to January 1, 2002.  While this change will not
necessarily  result in a lower overall demand for manufactured housing in Texas,
it  has  had  the effect of increasing 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  believes  that the Company realized less revenue during the
six  months ended June 28, 2002, than would have otherwise been the case without
lender  withdrawal  from  the industry and the Texas law change.  If the lending
environment  remains  stable,  management  believes that sales and revenues will
gradually  improve over current levels as its sales-in-process mature toward the
longer  closing  and  completion  cycle  and as its retail sales team adjusts to
these  new  lender  and  industry dynamics. Management believes that most of the
Company's  competition  in its core market region is experiencing similar market
pressures  and  is  reducing both retail and manufacturing capacity.  Management
believes that the Company is postured to take advantage of these changes because
it  is  reorganized  and  no  longer  distracted  by  the same relative leverage
positions  and  operational  challenges  as  its  competition.  While management
believes  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>
                                                           YEARS ENDED         THREE MONTHS      NINE MONTHS
                                                      ----------------------      ENDED             ENDED
                                                       JUNE 30,    JUNE 29,    SEPTEMBER 29,       JUNE 28,
                                                         2000        2001          2001             2002
                                                      ----------  ----------  ---------------  ---------------
                                                                 Predecessor Co.                Successor Co.
                                                      ---------------------------------------  ---------------
<S>                                                   <C>         <C>         <C>              <C>
Company-manufactured new homes sold at retail. . . .      5,193       2,447              373              994
Total new homes sold at retail . . . . . . . . . . .      5,831       2,499              373            1,001
Internalization rate (1) . . . . . . . . . . . . . .         89%         98%             100%              99%
Previously-owned homes sold at retail. . . . . . . .      2,196         964              149              555
Average retail selling price - new homes (HUD
     code) . . . . . . . . . . . . . . . . . . . . .  $  55,095   $  54,823   $       51,403   $       53,584
Company-operated retail sales centers and community
     sales centers at end of period. . . . . . . . .        111          41               41               41
Total manufacturing shipments. . . . . . . . . . . .     10,399       3,656              343            1,176
Manufacturing shipments to independent retail sales
     centers, including franchisees. . . . . . . . .      5,830       1,832               51              162
<FN>
_____________________
(1)     The proportion of new homes sold by Company-operated retail sales centers that are manufactured by the
        Company.
</TABLE>


                                       18
<PAGE>
     The  following table summarizes the Company's historical operating results,
expressed  as  a  percentage  of  total  revenues,  for  the  periods indicated:

<TABLE>
<CAPTION>
                                                  YEARS ENDED       THREE MONTHS     NINE MONTHS
                                              --------------------      ENDED           ENDED
                                              JUNE 30,   JUNE 29,   SEPTEMBER 29,      JUNE 28,
                                                2000       2001          2001            2002
                                              ---------  ---------  --------------  --------------
                                                       Predecessor Co.              Successor Co.
                                              ------------------------------------  --------------
<S>                                           <C>        <C>        <C>             <C>
Total revenues . . . . . . . . . . . . . . .     100.0%     100.0%          100.0%          100.0%
Gross profit . . . . . . . . . . . . . . . .      22.2%      27.6%           38.7%           37.0%
Selling, general and administrative expenses
     before acquisition costs. . . . . . . .      26.8%      32.2%           39.2%           34.7%
Restructuring costs. . . . . . . . . . . . .       3.8%      57.6%             --              --
Operating income . . . . . . . . . . . . . .     (8.4%)    (62.2%)          (0.5%)            2.3%
Income before income taxes and extraordinary
     item. . . . . . . . . . . . . . . . . .    (11.7%)    (67.7%)           65.4%            1.6%
Income before extraordinary item . . . . . .     (8.3%)    (74.1%)           65.7%            1.5%
Net income . . . . . . . . . . . . . . . . .     (8.3%)    (74.1%)          595.9%            1.5%
</TABLE>


     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 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 the Company's 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 recent exit of three retail lenders to
the industry are 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 the Company's 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 the Company's 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 products from the Company.  There were
very  few sales to independent dealers during the Company's reorganization (from
January  2001  through  October  2001).  Since  the  Company  emerged  from
reorganization  in  October  2001  and  has  re-established  relationships  with
industry  floor  plan  lenders,  sales  to  independent  dealers and subdivision
developers  have grown slowly.  The Company believes such sales will continue to
increase  gradually over time, aided by recent reductions of competitor capacity
in  the  Company's  regional  market  area.

     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  the  Company's  agency  and  reinsurance
operations  declined  approximately  $6.7  million (or 51%) primarily due to the


                                       19
<PAGE>
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,  the  Company's
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 the Company's
retail division declined nearly 5% for the nine months ended June 28, 2002.  The
most  significant factor in the decline was the Company's exit from all non-core
markets  by  mid-fiscal  year  2001.  Margins  in  the  non-core  markets  were
substantially lower than in the Company's 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 the Company was able to purchase
on  the  open market as well as from its secured lender as part of the Company's
reorganization.  While  the  number  of  such  discounted homes in the Company's
inventory  is  declining,  management  believes  that  similar  opportunities to
purchase  discounted  inventory  may  exist  in  the  future.

     Cost  of  sales  (expressed  as  a percentage of revenues) in the Company's
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  the  Company  was
undergoing  reorganization.

     Cost  of  sales  (expressed  as  a  percentage  of  revenues)  were largely
unchanged  in  the  Company's 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. Management
believes  that  the  short-term  maintenance  of  core market infrastructure and
capacity  will be met with greater demand and profitability as the Company gains
market  share  in  the  current  environment.

     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 the Company's
reorganization  and  attendant  debt  conversion  to equity, as well as slightly
lower  prevailing  and  average  interest  rates.

     Reorganization  Costs.  In connection with the Company's 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


                                       20
<PAGE>
expense  in  the  current  period relates to taxes attributable to the Company's
transportation  and  reinsurance  operations that file returns separate from the
Company's  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 the Company's transportation
and  reinsurance  operations  as  described  above.

     Earnings  in affiliates.  The Company's 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.  The Company owns 51% of its transportation operations
and  therefore  consolidates  (or includes 100% of) the transportation company's
results  in  its financial statements.  Because the Company only benefits by 51%
of  the  income,  the  remaining  49%  is  shown as a deduction on the Company's
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 28, 2001

     Net  Sales. Net sales of manufactured homes were $85.3 million for the year
ended  June  28,  2002,  compared  to $217.4 million for the year ended June 29,
2001.  The  61%  decline  in  sales  was primarily attributable to the Company's
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 the Company's 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  recent exit of three major retail lenders to the industry, were significant
factors  in  the  Company's  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 the Company's 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  product  from the Company.  There were very few sales to independent
dealers  during  the Company's reorganization (from January 2001 through October
2001).  Since  the  Company  emerged from reorganization in October 2001 and has
re-established  relationships  with  industry  floor  plan  lenders,  sales  to
independent  dealers  and subdivision developers have grown slowly.  The Company
believes  such  sales  will  continue  to increase gradually over time, aided by
recent  reductions of competitor capacity in the Company's regional market area.

     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  the Company's 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, the Company's
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


                                       21
<PAGE>
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 the Company's
retail division declined approximately 4% primarily as a result of the Company's
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  the  Company's  core  market  areas.  Another factor was higher
proportionate  sales  of  discounted  inventory  (both  new and used), which the
Company  was  able  to  purchase  on the open market as well as from its secured
lender  as  part  of  the  Company's  reorganization.  While  the number of such
discounted  homes  in  the Company's inventory is declining, management believes
that  similar  opportunities  to  purchase discounted inventory may exist in the
future.

     Cost  of  sales  (expressed  as  a percentage of revenues) in the Company's
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 the Company's reorganization. The
Company  also  implemented  a general price increase in February 2002, its first
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 the Company's 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 the Company's reorganization, a substantial number
of  sales  centers  and  manufacturing operations were closed or sold to others,
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 the Company's reorganization, interest expense on a substantial amount
of the Company's 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 the Company's 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
the  Company's  transportation  and reinsurance operations whose tax returns are
not  included  in  the  Company's consolidated tax returns. The most significant
source  of  the  2001  tax  expense  was the provision of a full ($15.8 million)
valuation  allowance  against  the  Company's deferred tax assets which arose in
prior  periods.  The  remainder  of  the tax expense for the year ended June 29,
2001 was attributable to the Company's transportation and reinsurance operations
described  above.


                                       22
<PAGE>
     Earnings  in Affiliates.  The Company's 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.  The Company owns 51% of its transportation operations
and  therefore  consolidates  (or includes 100% of) the transportation company's
results  in  its financial statements.  Because the Company only benefits by 51%
of  the  income,  the  remaining  49%  is  shown as a deduction on the Company's
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.

YEAR ENDED JUNE 29, 2001 COMPARED TO YEAR ENDED JUNE 30, 2000

     Net Sales. Net sales of manufactured homes were $217.4 million for the year
ended  June  29,  2001,  compared  to $532.6 million for the year ended June 30,
2000.  The  59%  decline  in  sales  was primarily attributable to the Company's
reorganization  and  downsizing including a significant reduction in the average
number  of  company sales centers and manufacturing facilities in the year ended
June  29,  2001,  as  compared  to  the  year  ended  June  30,  2000.

     Retail sales declined $186.2 million (or 57% in both units and dollars) due
to several factors. The most significant factor was a 35% decline in the average
number  of retail stores operating for the year ended June 29, 2001, compared to
the year ended June 30, 2000 (from 118 to 76).  Average new home sales per store
also  declined  21%  (from  76  to  60).  Same store sales in the Company's core
operations  also  declined 25% from an average of 56 new home sales per store in
the  year  ended  June 30, 2000, to an average of 42 new home sales per store in
the  year  ended  June  29,  2001.  The  Company's  retail  sales  activity  was
dramatically  affected  by the announcement of its reorganization, but gradually
improved  to  normal  levels  by  the  end  of  the  year  ended  June 29, 2001.

     Manufacturing  division sales to independent dealers were $76.9 million for
the year ended June 29, 2001, compared to $205.9 million for the year ended June
30,  2000,  a  decline  of  63%.  This significant decline was the result of two
principal  factors  related to the Company's reorganization.  One factor was the
reduction  in  average number of manufacturing facilities in operation (seven in
the  year  ended June 29, 2001, compared to 13 in the year ended June 30, 2000).
The other factor was a reduction in the number of independent dealers purchasing
products  from  the Company.  There were largely no sales to independent dealers
during  the  Company's  reorganization (from January 2001 through October 2001).

     Other  Revenues.  Other revenues were $24.4 million for the year ended June
29,  2001, compared to $41.4 million for the year ended June 30, 2000, a decline
of  $17  million  or  41%.  Other  revenues  in  the retail division (consisting
primarily  of  commissions  from  both  the  sale  of  insurance and the sale of
consigned  lender  repossessions as well as franchise-related revenues) declined
$10.8 million or 72%.  Insurance commission income declined proportionately with
retail sales, the sales of repossessions declined 45%, and the Company suspended
its  franchise  operations  in  mid-fiscal  year  2001  in  connection  with its
reorganization.

     Cost  of  Sales.  Cost of sales was $175.0 million (or 72% of revenues) for
the  year  ended  June 29, 2001, compared to $446.4 million (or 78% of revenues)
for  the  year ended June 30, 2000.  The 61% decline in dollar amount of cost of
sales  is  largely  attributable  to  the  58%  decline  in total revenues.  The
reduction  of  cost  of  sales (expressed as a percentage of total revenues) was
due,  in  large  measure,  to  the closing of all, lower margin, non-core retail
operations  during the year ended June 29, 2001, as well as higher proportionate
sales  of discounted inventory (both new and used) which the company was able to
purchase  on  the  open market as well as from its secured lender as part of the
company's  reorganization.

     Selling,  General  and  Administrative  Expenses.  Selling  general  and
administrative  expenses  were  $77.9  million (or 32% of revenues) for the year
ended  June  29,  2001,  compared to $153.8 million (or 27% of revenues) for the
year  ended June 30, 2000.  These expenses declined as the result of the decline
in revenues.  During the Company's reorganization, a substantial number of sales
centers  and manufacturing operations were closed or sold to others, giving rise
to  substantial  reductions  in  fixed  operating costs such as wages, benefits,
rents,  utilities  and  property  taxes.   The  Company retained the fixed costs
necessary  to  fund  its  core  market infrastructure during reorganization when
revenues  were  temporarily  disrupted.


                                       23
<PAGE>
     Restructuring  Charges.  Restructuring  charges for the year ended June 29,
2001  were $139.2 million, compared to $22.1 million for the year ended June 30,
2000.  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 $11.2 million for the year ended
June  29,  2001, compared to $18.4 million for the year ended June 30, 2000.  As
the  result  of  the Company's reorganization, interest expense on a substantial
amount  of  the  Company's  debt  ceased in the year ended June 29, 2001.  Lower
interest expense for the year ended June 29, 2001was the result of substantially
lower  average  debt  levels ($173.8 million in the year ended June 29, 2001, as
compared  to  $212.3  million  in  the  year  ended  June  30,  2000), and lower
prevailing  and  average  interest  rates  in  the  year ended June 29, 2001, as
compared  to  the  year  ended  June  30,  2000.

     Reorganization  Costs.  In connection with the Company's Chapter 11 filing,
reorganization  costs  of $2.8 million were incurred for the year ended June 29,
2001.  These  costs  related  primarily  to  professional  fees and similar type
expenditures  directly  related to the Chapter 11 proceedings. No reorganization
costs  are  reflected  for  the  year  ended  June  30,  2000.

     Income  Taxes.  Income  tax  expense  for  the year ended June 29, 2001 was
$16.2  million  (on  a pretax loss of $163.6 million) compared to tax benefit of
$20.1  million  (on  a pretax loss of $67.1 million) for the year ended June 30,
2000.  The  most  significant source was the provision of a full ($15.8 million)
valuation  allowance  against  the  Company's deferred tax assets which arose in
prior  periods.  The  remainder  of  the tax expense for the year ended June 29,
2001 was attributable to the Company's transportation and reinsurance operations
which  are  not  included  in  the  Company's consolidated tax returns.  The tax
benefit  for  the  year  ended June 30, 2000 related to the loss carry-backs and
carry-forwards  which the Company believed, at the time, it could fully utilize.

     Earnings  in Affiliates.  The Company's 50% share in the after-tax earnings
of  its  finance company joint venture (21st Mortgage, LLC) was $0.5 million for
the  year  ended  June 29, 2001, compared to a loss of $0.4 million for the year
ended  June  30, 2000.   The Company sold its interests in 21st Mortgage in June
2000  and  formed  a  new  joint venture (Homestar 21, LLC) to originate all new
business  from  July  1,  2000  forward.

     Minority  Interests.  The Company owns 51% of its transportation operations
and  therefore  consolidates  (or includes 100% of) the transportation company's
results  in  its financial statements.  Because the Company only benefits by 51%
of  the  income,  the  remaining  49%  is  shown as a deduction on the Company's
consolidated  income  statement.  This  deduction  was $0.2 million for the year
ended June 30, 2000, 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  profitable  during  the year ended June 30, 2000, had modest losses for the
year  ended  June 29, 2001, and was restored to profitability for the year ended
June  28,  2002.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  June  28,  2002, the Company had operating cash and cash equivalents of
$32.2 million, cash - reserved for claims of $6.2 million, and cash - restricted
of  $4.2  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 $4.2 million
held  in  a  cash  collateral  account,  which  secures the Company's floor plan
through  Associates  Housing  Financial  LLC  ("Associates").

     Under  the floor plan credit facility with Associates, although the maximum
line  of  credit  is  $38  million  with various sub-limits for each category of
inventory  financed, the Company estimates that the loan currently has a maximum
potential  advancement  of  $23  to  $24  million.  The  line  is  contractually
committed  until  October 2, 2004.  The balance outstanding at June 28, 2002 was
$20.7  million,  consisting  of $19.3 million in revolving debt and $1.4 million
under  liquidating  lines.  As  the  liquidating lines are paid down, additional


                                       24
<PAGE>
borrowing  capacity  is  added to the revolving lines. The revolving portions of
the  line  carry  an  annual  interest  rate  of prime plus 1%.  The liquidating
portions  of  the line carried no interest through April 3, 2002, and thereafter
accrue  interest at a rate of prime plus 1% per annum.  Management believes that
this  floor  plan  credit facility is sufficient to meet its inventory financing
needs  for  the  foreseeable  future.

     Under the Plan, the Company was required to make an initial distribution to
its  new  shareholders  of  approximately  $5.3  million.  A  distribution  of
approximately $2.1 million was made in April 2002 and approximately $3.2 million
is  held  in  escrow  for  the  remainder  of  the  distribution.

     Also  under  the  Plan,  the  Company  identified  certain  non-core assets
(principally  idle  factories  in  non-core  markets) where there are no current
intentions  to  reactivate  these facilities for future core operations. At June
28,  2002,  management  estimated  the  fair  market value of these assets to be
approximately  $5.4  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.

     In  accordance with customary business practice in the manufactured housing
industry,  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
their  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 losses.  At June 28, 2002, the Company was
at  risk  to repurchase approximately $2.9 million of manufactured homes and has
provided  for  estimated  net  repurchase  losses of approximately $0.2 million.

     The  Company  believes that its current cash position, along with its floor
plan  facility,  and  expected  cash  flow from operations will be sufficient to
support  the Company's cash and working capital requirements for the foreseeable
future.

INFLATION  AND  SEASONALITY

     Inflation  in  recent  years has been modest and has primarily affected the
Company's  manufacturing costs in the areas of labor, manufacturing overhead and
raw  materials  other  than lumber.  The price of lumber is affected more by the
imbalances  between  supply  and  demand  than  by inflation.  Historically, the
Company  believes  it  has  been  able  to  minimize the effects of inflation by
increasing  the  selling  prices  of  its  products, improving its manufacturing
efficiency and increasing its employee productivity.  In addition, the Company's
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.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURE  ABOUT  MARKET  RISK

     The  Company is exposed to market risks related to fluctuations in interest
rates  on its variable rate debt, which consists of its liability for floor plan
of  manufactured  housing  retail inventories. The Company does 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. The Company does 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 the Company would be required to refinance
it.  Based on the current level of variable rate debt, each one percentage point
increase  (decrease)  in  interest  rates occurring on the first day of the year
would  result  in  an  increase  in  interest  expense  for  the  coming year of
approximately  $0.2  million.


                                       25
<PAGE>
     The  Company's  financial  instruments are not currently subject to foreign
currency  risk or commodity price risk. The Company does not believe that future
market  interest  rate  risks  related  to  its  marketable  investments or debt
obligations  will  have  a  material impact on the Company or the results of its
future  operations.

     The  Company  has  no financial instruments held for trading purposes.  The
Company  originates  loans  through its 50% owned affiliate Homestar 21, most of
which  are  at  fixed  rates of interest, in the ordinary course of business and
periodically  securitizes  them  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.  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.

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 Advisors, Inc.
("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 have been 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.


                                       26
<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  24,  2002  are  set  forth  below.

<TABLE>
<CAPTION>
                                                                         YEAR TERM
                                                                         ---------
NAME                              AGE  POSITION                            ENDS
---------                         ---  --------                            ----
<S>                               <C>  <C>                               <C>
  Finis F. Teeter . . . . . . .    58  President, Chief Executive
                                       Officer and Director                   2004

  Craig A. Reynolds . . . . . .    53  Executive Vice-President, Chief
                                       Financial Officer and Secretary

  Charles N. Carney, Jr . . . .    47  Vice President, Chief Operating
                                       Officer-Retail Operations

  James J. Fallon . . . . . . .    62  Vice President, Chief Operating
                                       Officer-Manufacturing Operations

  Deborah H. Midanek (1) (2). .    47  Director, Chairman                     2004

  Richard N. Grasso (1) (2) . .    56  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 1982. Mr.
Reynolds  is  a  Certified  Public Accountant (inactive status) and holds an MBA
from  Florida Institute of Technology. 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.


                                       27
<PAGE>
     JAMES  J.  FALLON  has  served  as  Vice  President,  Chief  Operating
Officer-Manufacturing  Operations of the Company since July 2001.  Prior to that
period,  Mr.  Fallon  served as Director of Operations for the Central Region at
Fleetwood Homes, Inc. from May 2000 until June 2001.  Mr. Fallon briefly entered
retirement  from  January  2000  to May 2000.  From August 1993 through December
1999,  Mr.  Fallon was a Director of the Company.  Mr. Fallon has also served in
various  general  management  capacities  with  Oak  Creek, Kaufman & Broad Home
Systems,  Inc., Cavco, and Fleetwood Homes, Inc.  Mr. Fallon holds a Bachelor of
Science  in  electrical  engineering  from  Purdue  University.

     DEBORAH  H.  MIDANEK  has served as a director of the Company since October
2001.  Ms.  Midanek  serves  as  Chairman  of the Board of Directors and also as
Chairman  of  the  Compensation  Committee since December 2001. Ms. Midanek is a
Principal  of  Glass  &  Associates, a turnaround consulting firm, where she has
been  responsible  for  the  New  York practice of the firm since November 2000.
Glass  &  Associates  served  as a financial advisor to the Creditor's Committee
during  the  Company's  reorganization.  From  1997  to  2000,  Ms.  Midanek was
previously  a  Principal  with  Jay  Alix  &  Associates.  From 1993 to 1998 Ms.
Midanek  served  as CEO and Chairman of Solon Asset Management, LP. From 1996 to
1998  she also served as CEO of Standard Brands Paint Company. Ms. Midanek holds
an  MBA  from The Wharton School, and a BA from Bryn Mawr College, and spent the
early  part  of  her  career  at  Bankers  Trust  and  Drexel  Burnham

     RICHARD  N.  GRASSO  has  been  a  director of the Company since 2001, is a
member  of  the  Compensation  Committee  and  serves  as  Chairman of the Audit
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.,  a  supplier  to  the  Manufactured Housing Industry and a creditor of the
Company  prior to the Company's reorganization. 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.

     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.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     As  a  consequence  of  the Company's bankruptcy reorganization, all of its
equity  securities registered under Section 12 of the Securities Exchange Act of
1934,  as  amended, were cancelled in October 2001.  Under the Company's plan of
reorganization  two  new  series  of  common  stock, Series C and Series M, were
created.  The  Company  believes  that  its  executive  officers,  directors and
holders  of  10%  or  more  of  its  Series C and Series M common stock remained
subject  to  the  reporting  requirements  of  Section  16(a)  following  its
reorganization, even though its equity securities that were registered under the
Exchange  Act  were  cancelled  and  its  new  equity  securities  were  not  so
registered.  Accordingly,  based  solely  upon  a  review  of the copies of such
reports  furnished  to  the Company, the Company believes that Ms. Midanek filed
one  report  on  Form  3 on September 10, 2002, that was required to be filed on
October  13,  2001;  that Mr. Grasso filed one report on Form 3 on September 10,
2002,  that was required to be filed on October 13, 2001; that Mr. Dahlson filed
one  report  on  Form  3 on September 10, 2002, that was required to be filed on
October  13,  2001.


                                       28
<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  28,  2002  (collectively  the  "Named
Executives").

<TABLE>
<CAPTION>
                                        Annual Compensation                       Long Term Compensation
                            ----------------------------------------------  ---------------------------------
                                                                                     Awards          Payouts
                                                                            -----------------------  --------
                                                                                        Securities
                                                                                        Underlying
                                                                            Restricted   Options/      LTIP     All Other
                                                             Other Annual     Stock        SARs       Payouts  Compensation
                              Year       Salary    Bonus     Compensation   Awards ($)   (Shares)       ($)          ($)
                            ----------------------------------------------  -----------------------------------------------
<S>                         <C>         <C>       <C>       <C>             <C>         <C>          <C>       <C>
Finis F. Teeter. . . . . .      2002    $288,771  $204,750  $           --          --    2,999,900  $     --  $         --
 Director, President and .      2001     334,632         0             (a)          --           --        --            --
 Chief Executive Officer .      2000     261,448         0             (a)          --           --        --            --

Craig A. Reynolds. . . . .      2002    $159,231  $154,675  $           --          --      250,000  $     --  $         --
 Executive Vice President,      2001     171,000    25,000             (a)          --           --        --            --
 Chief Financial Officer .      2000     180,000    62,500             (a)          --           --        --            --
 and Secretary

Charles N. Carney, Jr. . .      2002    $185,741  $154,675  $          (a)          --      250,000  $     --  $         --
 Vice President, Chief . .      2001     225,000    50,000             (a)          --           --        --            --
 Operating Officer-Retail.      2000     240,000   125,000             (a)          --           --        --            --
 Operations

James J. Fallon. . . . . .      2002    $191,153  $136,500  $           --          --      250,000  $     --  $         --
 Vice President, Chief . .      2001           0         0              --          --           --        --            --
 Operating Officer-. . . .      2000(b)   47,500   139,874             (a)          --           --        --            --
 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)  Partial year only
</TABLE>

OPTION/SAR  GRANTS  IN  THE  LAST  FISCAL  YEAR

     The following table provides information on option grants in fiscal 2002 to
the  Named  Executives.

<TABLE>
<CAPTION>
                                                                                     Potential Realizable Value at
                                                                                     Assumed Annual Rates of Stock
                                                                                        Price Appreciation for
                                        Individual Grants                                  Option Term  (1)
                        --------------------------------------------------------  ---------------------------------
                                         Percent of
                            Number of      Total
                           Securities   Options/SARs
                           Underlying    Granted to
                          Options/SARs   Employees     Exercise or
                            Granted      In Fiscal     Base Price
                            (Shares)       Year     Per Share   Expiration Date          5%              10%
                        --------------------------------------------------------  ---------------------------------
<S>                     <C>            <C>           <C>         <C>              <C>              <C>
Finis F. Teeter. . . .      2,999,900           61%  $     1.35        10/3/2011  $     2,219,926  $     5,489,817
Craig A. Reynolds. . .        250,000            5%        1.35        10/3/2011          185,000          457,000
Charles N. Carney, Jr.        250,000            5%        1.35        10/3/2011          185,000          457,000
James J. Fallon. . . .        250,000            5%        1.35        10/3/2011          185,000          457,000
<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, calculations of potential
realizable  value  cannot  be based upon prices at which the common equity is sold or at bid and asked prices. The
calculations  were  made  on  the basis of 5% and 10% appreciation of the exercise price per share of the options,
$1.35  per  share,  which  is  based  upon  the  fresh start accounting valuation of the Company established by an
independent  third  party  in  connection  with  the  Company's  emergence  from  bankruptcy.
</TABLE>


                                       29
<PAGE>
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
2002  by  the  Named  Executives  and  the  values of such officers' unexercised
options  at  June  28,  2002.

<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       --/2,999,900  $              --/--
Craig A. Reynolds. . .  N/A          N/A               --/250,000  $              --/--
Charles N. Carney, Jr.  N/A          N/A               --/250,000  $              --/--
James J. Fallon. . . .  N/A          N/A               --/250,000  $              --/--
<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>

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. The Chairman of the Board receives an additional annual retainer fee
of  $20,000,  payable in monthly installments of $1,667, and committee chairmen,
other  than a committee chair that is also the Chairman of the Board, receive an
additional  $4,000,  annually in quarterly installments of $1,000.  Directors of
the  Company  are  also  reimbursed  for  out-of-pocket  expenses  incurred  in
connection  with  attendance  at  Board  and  committee  meetings.

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 Deborah
Midanek  and  Richard Grasso, who serves as Chairman. The board of directors 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.

     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 four times during fiscal 2002.  Members of the Audit Committee met
with  both management and the Company's outside auditors, Mann Frankfort Stein &
Lipp  CPAs,  L.L.P.  ("Mann  Frankfort"),  to  review  and discuss all financial
statements prior to their issuance and to discuss significant accounting issues.
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".  The Audit Committee also discussed
with  Mann  Frankfort  matters  relating  to  their  independence, 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 they 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.


                                       30
<PAGE>
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 28, 2002 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 2003 fiscal year.

     The  members of the Audit Committee are not financial professionals engaged
in  the  practice of auditing or accounting and are not experts in these fields.
Members  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
                                    Deborah  Midanek


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  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.


                                       31
<PAGE>
COMPENSATION  COMMITTEE  REPORT  ON  EXECUTIVE  COMPENSATION

      The  Compensation  Committee  of  the  Board  of  Directors is composed of
non-employee  Directors  of  the Company and 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  in Chapter 11 cases (the
"Creditors Committee") and the Company established the overall framework for the
compensation  for Company employees during negotiations related to the Company's
reorganization.  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 during the negotiations related to the reorganization of
the Company. 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 are currently
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


                                       32
<PAGE>
levels  are  established  to  reflect  the  Company's  objectives)  and  (2) key
individual  performance  which contributes to achieving 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.  The Company and the Creditors Committee collectively
determined the initial ranges of discretionary bonuses, after seeking the advice
and  guidance  of an outside consulting firm during the Company's reorganization
process.

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
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.  See  "Option/SAR  Grants  in  Last  Fiscal  Year"  for  more  information.

     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 above 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 2002 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 2002 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:

                                    Deborah H. Midanek, Chairman
                                    Richard N. Grasso



                                       33
<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 June 28, 2002 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 who
is  known  by  the  Company  to  own  five  percent  or more of any class of the
Company's  voting  securities  at  the  end  of  fiscal  2002.


<TABLE>
<CAPTION>
 Name and Address of                              Amount and Nature of
 Beneficial Owner(1)        Title of Class      Beneficial Ownership(2)  Percent of Class(2)
-----------------------  ---------------------  -----------------------  -------------------
<S>                      <C>                    <C>                      <C>
Richard F. Dahlson                                                 None                   *

Richard N. Grasso                                                  None                   *

Deborah H. Midanek                                                 None                   *

Finis F. Teeter          Series M Common Stock        600,080 shares(3)                 4.0%

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

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

James J. Fallon          Series M Common Stock         50,000 shares(4)                   *
<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  Plan  of  Reorganization, effective October 3, 2001, the
Company  is  obligated  to  issue  10,000,000 shares of its Series C Common Stock to certain
former creditors of the Company (that were creditors prior to the Company's reorganization).
The Company is currently undergoing a claims resolution procedure to determine the number of
shares  of  Series C Common Stock that will be issued to each approved former creditor.  The
Company  cannot  make  an accurate determination of the former creditors that may ultimately
become  owners  of  at  least  5%  of  the  voting  securities  of  the  Company.

(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
599,880  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.
</TABLE>


                                       34
<PAGE>
EQUITY  COMPENSATION  PLAN  INFORMATION

     The  following  table  sets  forth  certain  information  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
                                 Number of securities      Weighted-average          remaining available
                                  to be issued upon        exercise price of         for future issuance
                               exercise of outstanding   outstanding options,     under equity compensation
                                       options,              warrants and        plans (excluding securities
       Plan Category             warrants and rights            rights             reflected in column (a)
-----------------------------  ------------------------  ---------------------  -----------------------------
<S>                            <C>                       <C>                    <C>
                                         (a)                     (b)                         (c)
Equity compensation plans
approved by shareholders                      4,949,900  $                1.35                         50,000

Equity compensation plans not
approved by shareholders                           None                    N/A                            N/A
                               ------------------------  ---------------------  -----------------------------
TOTAL                                         4,949,900  $                1.35                         50,000
                               ========================  =====================  =============================
</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 July 1, 2001 and June 28, 2002, the
Company  paid $88,894 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  expire  in  May  2003.

     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.


                                       35
<PAGE>
<TABLE>
<CAPTION>
                                                        PART IV

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

  (a)(1)  FINANCIAL  STATEMENTS

                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
Independent Auditors' Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Balance Sheets as of June 29, 2001 and June 28, 2002 . . . . . . . . . . . . . . . . . . . . .  F-4

Consolidated Statements of Operations for the years ended June 30, 2000, June 29, 2001,
     three months ended September 29, 2001 and nine months ended June 28, 2002. . . . . . . . . . . . . . .  F-5

Consolidated Statements of Shareholders' Equity (Deficit) for the years ended June 30, 2000, June 29, 2001
     three months ended September 29, 2001, September 29, 2001 (Fresh Start) and
     nine months ended June 28, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

Consolidated Statements of Cash Flows for the years ended June 30, 2000, June 29, 2001
     three months ended September 29, 2001 and nine months ended June 28, 2002. . . . . . . . . . . . . . .  F-7

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-8

     (2)   SUPPLEMENTARY SCHEDULE TO FINANCIAL STATEMENTS

Financial Statement Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . F-30
</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

     None.

 (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

3.4*  Charter for the Compensation Committee of the Company, dated September 18,
      2001

10.1* Employment  Agreement, effective as of October 3, 2001, by and between the
      Company  and  Finis  F.  Teeter

10.2* American Homestar Corporation 2001 Management Incentive Program, effective
      as  of  October  3,  2001


                                       36
<PAGE>
10.3* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Finis  F.  Teeter.

10.4* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Craig  A.  Reynolds.

10.5* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Charles  N.  Carney,  Jr.

10.6* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  James  J.  Fallon.

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

23.1* Consent  of  KPMG  LLP

99.1* Certification  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.

99.2* Certification  pursuant  to 18 U.S.C. Section 1350, as adopted pursuant to
      Section  906  of  the  Sarbanes-Oxley  Act  of 2002 for Craig A. Reynolds.

____________
*  Filed  herewith


                                       37
<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 24, 2002             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.


     Signature                  Title                               Date
     ---------                  -----                               ----

     /s/ FINIS F. TEETER        President,  CEO  and          September 24, 2002
     --------------------        Director
     Finis F. Teeter


     /s/ CRAIG A. REYNOLDS      Executive Vice President,     September 24, 2002
     ----------------------       Chief Financial Officer,
     Craig A. Reynolds            and Secretary
                                  (Principal  Financial
                                  and  Accounting  Officer)


     /s/ DEBORAH H. MIDANEK     Director                      September 24, 2002
     ----------------------
     Deborah H. Midanek


     /s/ RICHARD N. GRASSO      Director                      September 24, 2002
     ----------------------
     Richard N. Grasso


     /s/ RICHARD F. DAHLSON     Director                      September 24, 2002
     ----------------------
     Richard F. Dahlson


                                       38
<PAGE>
                          AMERICAN HOMESTAR CORPORATION


                   CERTIFICATION OF PERIODIC FINANCIAL REPORT
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     I, Finis F. Teeter, certify that:

          1.     I  have  reviewed  this  annual report on Form 10-K of American
Homestar  Corporation;

          2.     Based  on my knowledge, this annual report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in  light  of  the  circumstances  under which
statements  were made, not misleading with respect to the period covered by this
annual  report;

          3.     Based  on  my  knowledge,  the  financial  statements and other
financial  information  included  in  this  annual report, fairly present in all
material  respects the financial condition, results of operations and cash flows
of  the  registrant as of, and for, the periods presented in this annual report.

     Date:  September 24, 2002

                                       /s/  Finis F. Teeter
                                       --------------------------------------
                                       Finis F. Teeter
                                       President, Chief Executive Officer and
                                       Director
                                       (Principal Executive Officer)




     I, Craig A. Reynolds, certify that:

          1.     I  have  reviewed  this  annual report on Form 10-K of American
Homestar  Corporation;

          2.     Based  on my knowledge, this annual report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in  light  of  the  circumstances  under which
statements  were made, not misleading with respect to the period covered by this
annual  report;

          3.     Based  on  my  knowledge,  the  financial  statements and other
financial  information  included  in  this  annual report, fairly present in all
material  respects the financial condition, results of operations and cash flows
of  the  registrant as of, and for, the periods presented in this annual report.

     Date:  September  24,  2002

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


                                       39
<PAGE>
<TABLE>
<CAPTION>
                                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                                                           PAGE
                                                                                                           ----
<S>                                                                                                        <C>
Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Balance Sheets as of June 29, 2001 and June 28, 2002. . . . . . . . . . . . . . . . . . . . .  F-4

Consolidated Statements of Operations for the years ended June 30, 2000, June 29, 2001,
     three months ended September 29, 2001 and nine months ended June 28, 2002 . . . . . . . . . . . . . .  F-5

Consolidated Statements of Shareholders' Equity (Deficit) for the years ended June 30, 2000, June 29, 2001
     three months ended September 29, 2001, September 29, 2001 (Fresh Start) and
     nine months ended June 28, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

Consolidated Statements of Cash Flows for the years ended June 30, 2000, June 29, 2001
     three months ended September 29, 2001 and nine months ended June 28, 2002 . . . . . . . . . . . . . .  F-7

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-8

Financial Statement Schedule II - Valuation and Qualifying Accounts. . . . . . . . . . . . . . . . . . . . F-30
</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 28, 2002
(Successor  Company)  and  June  29,  2001 (Predecessor Company) and the related
consolidated  statements  of operations, shareholders' equity (deficit) and cash
flows  for  the  nine  months ended June 28, 2002 (Successor Company), the three
months  ended  September  29, 2001 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 Successor Company 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 28, 2002
and  the  consolidated  results of their operations and their cash flows for the
nine  months  ended  June  28,  2002,  in  conformity with accounting principles
generally  accepted  in  the  United  States.  Further,  in  our  opinion,  the
Predecessor  Company 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 29, 2001 and the
consolidated  results  of  their  operations  and their cash flows for the three
months  ended September 29, 2001 and the year ended June 29, 2001, in conformity
with  accounting  principles  generally  accepted  in  the  United  States.


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

Houston,  Texas
August  16,  2002


                                      F-2
<PAGE>
                          Independent Auditors' Report
                          ----------------------------

The  Board  of  Directors
American  Homestar  Corporation:

We  have audited the consolidated statements of operations, stockholders' equity
(deficit)  and  cash flows of American Homestar Corporation and subsidiaries for
the  year  ended  June  30,  2000.  In  connection  with  our  audit  of  these
consolidated  financial  statements,  we  also  audited  the financial statement
schedule  as  listed in the accompanying index for the year ended June 30, 2000.
These consolidated financial statements and financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  and financial statement
schedule  based  on  our  audits.

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

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations of American Homestar
Corporation  and  subsidiaries  and their cash flows for the year ended June 30,
2000,  in conformity with accounting principles generally accepted in the Untied
States  of  America.  Also,  in  our  opinion,  the  related financial statement
schedule,  when  considered  in  relation  to  the  basic consolidated financial
statements  taken  as  a  whole,  presents fairly, in all material respects, the
information  set  forth  therein.



/S/  KPMG LLP


Houston,  Texas
August 14, 2000, except as to notes 1 and 8
which are as of October 11, 2000


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


                                                                                    PREDECESSOR CO.   SUCCESSOR CO.
                                                                                       JUNE 29,          JUNE 28,
                                                                                         2001              2002
                                                                                   -----------------  --------------
<S>                                                                                <C>                <C>
ASSETS
Current assets:
     Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . .  $         22,177   $       32,250
     Cash - reserved for claims . . . . . . . . . . . . . . . . . . . . . . . . .                --            6,244
     Cash - restricted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             8,453            4,190
     Accounts receivable - trade, net . . . . . . . . . . . . . . . . . . . . . .             3,413            2,692
     Accounts receivable - other, net . . . . . . . . . . . . . . . . . . . . . .               566              287
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            26,037           27,006
     Prepaid expenses, notes receivable and other current assets. . . . . . . . .             3,465              792
                                                                                   -----------------  --------------
               Total current assets . . . . . . . . . . . . . . . . . . . . . . .            64,111           73,461
                                                                                   -----------------  --------------

     Notes receivable and other assets. . . . . . . . . . . . . . . . . . . . . .               609              555
     Investments in affiliates, at equity                                                     2,892            3,205
     Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . .            22,697           10,149
     Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . .             6,043            5,379
                                                                                   -----------------  --------------
               Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .  $         96,352   $       92,749
                                                                                   =================  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Floor plan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $         23,097   $       20,689
     Current installments of notes payable. . . . . . . . . . . . . . . . . . . .               125              370
     Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             4,628            1,315
     Warranty reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             2,635            1,818
     Accrued other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .             4,561            7,265
     Liquidation and plan reserve . . . . . . . . . . . . . . . . . . . . . . . .             1,971            3,626
     Claims reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                --            3,067
     Initial distribution payable . . . . . . . . . . . . . . . . . . . . . . . .                --            3,177
                                                                                   -----------------  --------------
               Total current liabilities. . . . . . . . . . . . . . . . . . . . .            37,017           41,327
                                                                                   -----------------  --------------

     Notes payable, less current installments . . . . . . . . . . . . . . . . . .             1,240              644
     Minority interest in consolidated subsidiary . . . . . . . . . . . . . . . .               666              965
     Liabilities subject to compromise under reorganization proceedings . . . . .           148,756               --
     Commitments and contingencies. . . . . . . . . . . . . . . . . . . . . . . .                --               --

SHAREHOLDERS' EQUITY (DEFICIT)
     Old preferred stock, no par value; 5,000,000 shares authorized; 134,167
          shares issued and outstanding at June 29, 2001. . . . . . . . . . . . .             1,610               --
     Old common stock, $0.05 par value; 50,000,000 shares authorized; 18,423,707
          shares issued and outstanding  at June 29, 2001 . . . . . . . . . . . .               921               --
     Common stock series C, par value $0.01; 15,000,000 shares authorized,
          10,000,000 shares issued and outstanding at June 28, 2002 . . . . . . .                --              100
     Common stock series M, par value $0.01; 7,500,000 shares authorized, 100
          shares issued and outstanding at June 28, 2002. . . . . . . . . . . . .                --               --
     Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . .            62,519           48,449
     Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . . . .          (156,377)           1,264
                                                                                   -----------------  --------------
               Total shareholders' equity (deficit) . . . . . . . . . . . . . . .           (91,327)          49,813
                                                                                   -----------------  --------------
               Total liabilities and shareholders' equity (deficit) . . . . . . .  $         96,352   $       92,749
                                                                                   =================  ==============
<FN>

See  accompanying  notes  to  consolidated  financial  statements
</TABLE>


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

                                                                            THREE MONTHS    NINE MONTHS
                                                        YEAR ENDED             ENDED           ENDED
                                                   JUNE 30      JUNE 29,    SEPTEMBER 29,     JUNE 28,
                                                     2000         2001          2001            2002
                                                 ------------  ----------  ---------------  -------------
                                                      PREDECESSOR CO.                       SUCCESSOR CO.
                                                 -----------------------------------------  -------------
<S>                                              <C>           <C>         <C>              <C>
Revenues:
  Net sales . . . . . . . . . . . . . . . . . .  $   532,634   $ 217,375   $       21,107   $    64,234
  Other revenues. . . . . . . . . . . . . . . .       41,402      24,399            5,137        18,584
                                                 ------------  ----------  ---------------  ------------
      Total revenues. . . . . . . . . . . . . .      574,036     241,774           26,244        82,818
Costs and expenses:
  Cost of sales . . . . . . . . . . . . . . . .      446,378     174,999           16,086        52,184
  Selling, general and administrative . . . . .      153,769      77,948           10,290        28,703
  Restructuring charges, goodwill and asset
    impairment. . . . . . . . . . . . . . . . .       22,097     139,216               --            --
                                                 ------------  ----------  ---------------  ------------
      Total costs and expenses. . . . . . . . .      622,244     392,163           26,376        80,887
                                                 ------------  ----------  ---------------  ------------
      Operating income (loss) . . . . . . . . .      (48,208)   (150,389)            (132)        1,931
                                                 ------------  ----------  ---------------  ------------

Interest expense. . . . . . . . . . . . . . . .      (18,366)    (11,231)            (214)         (825)
Other income (expense). . . . . . . . . . . . .         (566)        813               88           245
                                                 ------------  ----------  ---------------  ------------
      Income (loss) before items shown below. .      (67,140)   (160,807)            (258)        1,351
                                                 ------------  ----------  ---------------  ------------

Reorganization items:
  Fresh-Start adjustments . . . . . . . . . . .           --          --           18,863            --
  Reorganization costs. . . . . . . . . . . . .           --      (2,796)          (1,433)           --
                                                 ------------  ----------  ---------------  ------------
      Income (loss) before items shown below. .      (67,140)   (163,603)          17,172         1,351
                                                 ------------  ----------  ---------------  ------------
  Income tax expense (benefit). . . . . . . . .      (20,141)     16,239               20           247
                                                 ------------  ----------  ---------------  ------------
      Income (loss) before items shown below. .      (46,999)   (179,842)          17,152         1,104
                                                 ------------  ----------  ---------------  ------------

Earnings (losses) in affiliates . . . . . . . .         (350)        492              145           409
Minority interests. . . . . . . . . . . . . . .         (242)        142              (50)         (249)
                                                 ------------  ----------  ---------------  ------------
      Income (loss) before items shown below. .      (47,591)   (179,208)          17,247         1,264
                                                 ------------  ----------  ---------------  ------------

Extraordinary item:
      Gain on forgiveness of debt . . . . . . .           --          --          139,130            --
                                                 ------------  ----------  ---------------  ------------
      Net income (loss) . . . . . . . . . . . .  $   (47,591)  $(179,208)  $      156,377   $     1,264
                                                 ============  ==========  ===============  ============

Earnings (loss) per share - basic and diluted:
  Income (loss) . . . . . . . . . . . . . . . .        (2.59)  N/A         N/A              $      0.13
                                                 ============  ==========  ===============  ============
Weighted average shares
  Outstanding - basic and diluted . . . . . . .   18,423,000   N/A         N/A               10,000,100
                                                 ============  ==========  ===============  ============
<FN>

See accompanying notes to consolidated financial statements
</TABLE>


                                      F-5
<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>
BALANCES AT JUNE 30, 1999              --   $    --     18,416,707   $       921   $    62,484   $      71,159     $    134,564
Exercise of stock options              --        --          7,000            --            35              --               35
Issuance of preferred stock       509,167     6,110             --            --            --              --            6,110
Payment of preferred stock
  dividends                            --        --             --            --            --            (216)            (216)
Net loss                               --        --             --            --            --         (47,591)         (47,591)
                                 ---------  --------  -------------  ------------  ------------  --------------    -------------

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
<FN>
________________________
(1) Net loss before fresh-start adjustments and extraordinary item relating to gain on forgiveness of debt.

See accompanying notes to consolidated financial statements
</TABLE>


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (in thousands)

                                                                            YEARS ENDED        THREE MONTHS     NINE MONTHS
                                                                      -----------------------      ENDED           ENDED
                                                                       JUNE 30,    JUNE 29,    SEPTEMBER 29,      JUNE 28,
                                                                         2000        2001          2001             2002
                                                                                PREDECESSOR CO.                SUCCESSOR CO.
                                                                      ---------------------------------------  -------------
<S>                                                                   <C>         <C>         <C>              <C>
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . .  $ (47,591)  $(179,208)  $      156,377   $      1,264
    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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .         --          --               --         18,370
    Loss on sale of assets . . . . . . . . . . . . . . . . . . . . .         --          --               --             18
    Depreciation and amortization. . . . . . . . . . . . . . . . . .     16,493       9,799              748            448
    Minority interests in income of consolidated subsidiaries. . . .        (43)       (141)              50            249
    Loss on sale of affiliate. . . . . . . . . . . . . . . . . . . .        246          --               --             --
    Losses (earnings) in affiliates. . . . . . . . . . . . . . . . .        350       1,427             (145)          (409)
    Restructuring charges, goodwill and asset
      impairments. . . . . . . . . . . . . . . . . . . . . . . . . .     28,120     102,751               --             --
    Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . .    (11,601)     15,753               --             --
    Change in assets and liabilities:
      Change in receivables. . . . . . . . . . . . . . . . . . . . .     14,999      34,216            1,396           (396)
      Change in inventories. . . . . . . . . . . . . . . . . . . . .     32,550      64,444              584         (4,122)
      Change in prepaid expenses, notes receivable and
        other current assets . . . . . . . . . . . . . . . . . . . .      5,498       2,841              903          1,770
      Changes in notes receivable and other assets . . . . . . . . .         --      11,426              (95)           149
      Change in accounts payable . . . . . . . . . . . . . . . . . .      1,058     (24,245)          (2,216)        (1,097)
      Change in accrued expenses and other liabilities . . . . . . .    (24,606)    (22,308)           1,527         (3,294)
      Payment of Plan obligations. . . . . . . . . . . . . . . . . .         --          --               --           (309)
      Change in long term debt and floor plan. . . . . . . . . . . .         --    (156,365)              --             --
      Change in liabilities subject to compromise under
        reorganization proceedings . . . . . . . . . . . . . . . . .         --     148,756               --             --
                                                                      ----------  ----------  ---------------  -------------
        Net cash provided by operating activities. . . . . . . . . .     15,473       9,146            1,136         12,641
                                                                      ----------  ----------  ---------------  -------------
Cash flows from investing activities:
  Payment for purchase of acquisitions, net of cash acquired . . . .       (958)         --               --             --
  Net proceeds from sale of investment affiliate . . . . . . . . . .      4,012          --               --             --
  Proceeds from sale of property, plant and equipment. . . . . . . .         --       4,701               --              3
  Proceeds from sale of assets held for sale . . . . . . . . . . . .         --          --               --            581
  Purchases of property, plant and equipment . . . . . . . . . . . .     (8,850)     (1,239)             (76)          (155)
  Dividends from unconsolidated affiliate. . . . . . . . . . . . . .         --          --               --            272
  Investment in affiliate. . . . . . . . . . . . . . . . . . . . . .         --          --               --            (31)
                                                                      ----------  ----------  ---------------  -------------
        Net cash provided by (used in) investing activities. . . . .     (5,796)      3,462              (76)           670
                                                                      ----------  ----------  ---------------  -------------
Cash flows from financing activities:
  Participation in floor plan payable. . . . . . . . . . . . . . . .     20,402      21,503               --             --
  Borrowings under floor plan payable. . . . . . . . . . . . . . . .    157,830      76,198            9,368         22,382
  Repayments of floor plan payable . . . . . . . . . . . . . . . . .   (189,123)   (118,217)         (12,843)       (21,315)
  Proceeds from long-term debt borrowings. . . . . . . . . . . . . .      1,630           4              214            275
  Principal payments of long-term debt . . . . . . . . . . . . . . .     (4,386)     (1,171)             (99)          (299)
  Change in restricted cash. . . . . . . . . . . . . . . . . . . . .     (1,156)     (7,297)          (4,563)         2,582
  Redemption of preferred stock. . . . . . . . . . . . . . . . . . .         --      (4,500)              --             --
  Payment of preferred stock dividends . . . . . . . . . . . . . . .       (216)       (521)              --             --
  Exercise of stock options. . . . . . . . . . . . . . . . . . . . .         35          --               --             --
                                                                      ----------  ----------  ---------------  -------------
      Net cash provided by (used in) financing
        activities . . . . . . . . . . . . . . . . . . . . . . . . .    (14,984)    (34,001)          (7,923)         3,625
                                                                      ----------  ----------  ---------------  -------------
Net increase (decrease) in cash and cash equivalents . . . . . . . .     (5,307)    (21,393)          (6,863)        16,936
Cash and cash equivalents at beginning of year . . . . . . . . . . .     48,877      43,570           22,177         15,314
                                                                      ----------  ----------  ---------------  -------------
Cash and cash equivalents at end of year . . . . . . . . . . . . . .  $  43,570   $  22,177   $       15,314   $     32,250
                                                                      ==========  ==========  ===============  =============
Supplemental Cash Flow Information
  Income taxes paid. . . . . . . . . . . . . . . . . . . . . . . . .  $   1,073   $      64   $           25   $        296
  Interest paid  . . . . . . . . . . . . . . . . . . . . . . . . . .     17,851       7,031              233            850
                                                                      ==========  ==========  ===============  =============
Non-cash investing and financing activities:
  Sale of assets in exchange for debt reduction. . . . . . . . . . .  $      --   $   5,666   $           --   $        442
  Stock issuance recorded as reduction in paid in capital. . . . . .         --          --               --            100
                                                                      ==========  ==========  ===============  =============
<FN>

See accompanying notes to consolidated financial statements.
</TABLE>


                                      F-7
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  REORGANIZATION  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
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.  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 4,999,900 shares underlie options authorized
under  the  Company's 2001 Management Incentive Program.   Options for 4,949,900
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.

     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: 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: 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-8
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


     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,  which is included in restricted cash on the balance sheet included in the
Company's  financial  statements).  The loan has a maximum limit of $38 million,
although  the  available  amount  varies  based  on  various covenants and other
requirements.  The  Company  estimates  that  the  loan  has a maximum potential
advancement  of  $23  to  $24 million, of which $20.7 million was advanced as of
June  28,  2002. In addition to this facility, the secured lender issued certain
other shorter-term loan accommodations to provide for the acquisition of certain
specified  inventory  by  the  Company  or  its  affiliates.

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 (referred to as "Predecessor
Company")  and  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. As a result, the net income for
the nine months ended June 28, 2002 is not comparable with prior periods and the
net  income  for the twelve months ended June 28, 2002 is divided into Successor
Company  and  Predecessor Company and is also not comparable with prior periods.
In  addition,  the  Balance Sheet as of June 28, 2002 is not comparable to prior
periods  for  the  reasons  discussed  above.

     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-9
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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):

<TABLE>
<CAPTION>
                                                                 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-10
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


(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
2002  presentation.  The  Company  also  owns  a 50% interest in a joint venture
(Homestar  21st,  LLC),  which  is  accounted  for  under  the  equity method of
accounting.  In  2002  the  Company  formed  a  second  50%  owned joint venture
(American  Homestar Mortgage), which will also be 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  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  the  Company's  Balance  Sheets:

     -    Property Plant and Equipment is reflected at its estimated fair market
          value  at  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  that  are  still  under warranty.


                                      F-11
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


     -    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 (i.e. an approved floor plan source,
          cash  or  cashiers  check  received  in  advance);
     -    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.

     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 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  six 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.


                                      F-12
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


     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. 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 2000 and
2001,  the  Company  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. 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.

     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. 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 2000 and
2001,  the Company recorded goodwill write-off of approximately $14.6 million in
fiscal  2000  and  approximatley  $63.9  million  in  fiscal  2001.

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 years ended June 30, 2000, June 29, 2001, the
three  months  ended September 29, 2001 and the nine months ended June 28, 2002,
warranty  and  service  costs  were $27.7 million, $ 10.6 million, $0.7 million,
$2.0  million  respectively.


                                      F-13
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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.  Optons  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 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.  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 is effective for
fiscal  years  beginning after December 15, 2001, and management does not expect
its adoption will have a material impact on the Company's 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 will be effective for financial
statements issued for fiscal years beginning after June 15, 2002, and management
does  not  expect  its  adoption  will  have  a material impact on the Company's
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  are  effective  for  financial  statements  issued  for  fiscal years
beginning  after  December 15, 2001, and management does not expect its adoption
will  have  a material impact on the Company's financial condition or results of
operations.


                                      F-14
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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.

     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
                         =================================================================
</TABLE>

------------------------
     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.


     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.

Fiscal  2000  Restructuring.

     As  a  result of the industry downturn during fiscal 2000, the Company made
decisions  to  close  and  idle  two manufacturing plants in the first and third
quarters  of  fiscal  2000.  In  the  fourth  quarter  of  fiscal  2000, another
manufacturing  plant  was idled and a significant restructuring of the Company's
retail  operations  occurred.  The  restructuring  plan called for conversion of
non-core  retail  sales  centers  from  Company-owned to franchise operations or
closure  if  conversion  was  not  possible.  Concurrent  with  the  retail
restructuring,  the Company evaluated the ability of two North Carolina entities
(First  Value  Homes,  Inc.  and Nationwide NC Homes, Inc. to produce sufficient
cash  flows to support the carrying value of associated intangible and long-term
assets.


                                      F-15
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     This  year-long  review of the Company's operations in fiscal 2000 resulted
in  the  following  special  pre-tax charges that were reflected in a variety of
captions  within the Company's consolidated statement of operations for the year
ended  June  30,  2000:

<TABLE>
<CAPTION>
                          MANUFACTURING        RETAIL        IMPAIRMENT
                          RESTRUCTURINGS    RESTRUCTURING    EVALUATIONS    TOTAL
                         ---------------------------------------------------------
<S>                      <C>               <C>              <C>            <C>
Cost of sales            $      3,869 (1)  $     6,036 (2)  $         --   $ 9,905
Selling, general and
  administrative                      --               --        11,573(3)  11,573
Restructuring costs,              970 (4)        1,733 (5)            --
  goodwill write-off,
    and                               --        14,639 (6)            --
  long-term asset
    impairments                 1,908 (7)        2,847 (8)            --    22,097
                         ---------------------------------------------------------
        Total            $         6,747   $       25,255   $     11,573   $43,575
                         =========================================================
</TABLE>

---------------------
     1)   Special warranty and repossession loss accruals established for
          manufacturing markets as well as inventory write-downs related to
          manufacturing plants that were closed or idled during the first, third
          and fourth quarter of fiscal 2000.
     2)   Inventory write-downs from sales centers scheduled to be converted to
          franchise operations or closed if conversion is not possible.
     3)   Impairment of goodwill related to the North Carolina retail operations
          (First Value Homes, Inc. and Nationwide NC Homes, Inc.).
     4)   Severance obligations related to manufacturing plants closed or idled
          during fiscal 2000.
     5)   Expected severance obligations and unfavorable operating lease
          commitments for retail sales centers subject to the restructuring
          plan.
     6)   Goodwill associated with retail sales centers scheduled to be
          converted or closed.
     7)   Fair value adjustment to property held for sale related to the closure
          of the Vicksburg, Mississippi manufacturing plant.
     8)   Asset impairments related to retail sales centers that are subject to
          conversion or disposal.

     During fiscal 2000, the plants that were either closed or idled contributed
$40.0  million  in  revenues  and  had an operating loss of $5.1 million. During
fiscal  2000,  the  retail  sales  centers  affected by the retail restructuring
contributed $65.3 million in revenues and had an operating loss of $7.8 million.
Approximately  910  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 twelve-month period ended June 29,
2001  and  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-16
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(6)  INVENTORIES

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

<TABLE>
<CAPTION>
                                                     JUNE 29,   JUNE 28,
                                                      2001       2002
                                                    ---------  ---------
<S>                                                 <C>        <C>
     Manufactured homes:
      New. . . . . . . . . . . . . . . . . . . . .  $  22,442  $  22,987
      Used . . . . . . . . . . . . . . . . . . . .      1,282      1,995
     Furniture and supplies. . . . . . . . . . . .         --        468
     Raw materials and work-in-process . . . . . .      2,314      1,556
                                                    ---------  ---------
       Total . . . . . . . . . . . . . . . . . . .  $  26,037  $  27,006
                                                    =========  =========
</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 29,   JUNE 28,
                                                       LIVES       2001       2002
                                                     ----------  ---------  ---------
<S>                                                  <C>         <C>        <C>
     Land . . . . . . . . . . . . . . . . . . . . .           -  $   7,131  $   7,017
     Buildings. . . . . . . . . . . . . . . . . . .  5-30 years     12,042      2,573
     Machinery and equipment. . . . . . . . . . . .  5-10 years      2,816        430
     Furniture and equipment. . . . . . . . . . . .     5 years      3,326        432
     Vehicles . . . . . . . . . . . . . . . . . . .     3 years      1,346         26
     Leasehold improvements . . . . . . . . . . . .  5-13 years      9,206        287
                                                                 ---------  ---------
         Total                                                      35,867     10,765
     Less accumulated depreciation and amortization                 13,170        616
                                                                 ---------  ---------
         Property, plant and equipment, net                      $  22,697  $  10,149
                                                                 =========  =========
</TABLE>

(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 29, 2001 and June 28, 2002 to be
approximately  $6.0  million  and  $5.4  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.


                                      F-17
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(9)  PREPAID  EXPENSES,  NOTES  RECEIVABLE  AND  OTHER  ASSETS

     A  summary  of  other  assets  follows  (in thousands):

<TABLE>
<CAPTION>
                                                             JUNE 29,   JUNE 28,
                                                              2001       2002
                                                            ---------  ---------
<S>                                                         <C>        <C>
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .  $     756  $     568
Notes receivable . . . . . . . . . . . . . . . . . . . . .        748        453
Deposits . . . . . . . . . . . . . . . . . . . . . . . . .        345        251
Deposit with Associates. . . . . . . . . . . . . . . . . .        478         --
Net cash surrender value of company-owned life insurance .         75         75
Insurance funds withheld for claims reserve. . . . . . . .        551         --
Repossessed assets from 21st Mortgage. . . . . . . . . . .      1,000         --
Other. . . . . . . . . . . . . . . . . . . . . . . . . . .        121         --
                                                            ---------  ---------
    Total. . . . . . . . . . . . . . . . . . . . . . . . .      4,074      1,347
Less current portion . . . . . . . . . . . . . . . . . . .      3,465        792
                                                            ---------  ---------
  Prepaid expenses, notes receivable and other assets less
    current portion. . . . . . . . . . . . . . . . . . . .  $     609  $     555
                                                            =========  =========
</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>
                                         YEARS ENDED       THREE MONTHS     NINE MONTHS
                                    ---------------------     ENDED            ENDED
                                     JUNE 30,   JUNE 29,   SEPTEMBER 29,      JUNE 28,
                                       2000       2001          2001           2002
                                    ----------  ---------  --------------  -------------
                                             PREDECESSOR CO.               SUCCESSOR CO.
                                    -------------------------------------  -------------
<S>                                 <C>         <C>        <C>             <C>
Federal-current expense (benefit).  $  (7,834)  $      --  $           --  $          --
Federal-deferred expense (benefit)    (11,101)     16,239              20            247
State-current expense (benefit). .       (706)         --              --             --
State-deferred expense (benefit) .       (500)         --              --             --
                                    ----------  ---------  --------------  -------------
    Total. . . . . . . . . . . . .  $ (20,141)  $  16,239  $           20  $         247
                                    ==========  =========  ==============  =============
</TABLE>


                                      F-18
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     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>
                                             YEARS ENDED        THREE MONTHS     NINE MONTHS
                                       ----------------------      ENDED            ENDED
                                        JUNE 30,    JUNE 29,    SEPTEMBER 29,      JUNE 28,
                                          2000        2001          2001            2002
                                       ----------  ----------  ---------------
                                                 PREDECESSOR CO.                SUCCESSOR CO.
                                       ---------------------------------------  -------------
<S>                                    <C>         <C>         <C>              <C>
Computed "expected" tax expense
   (benefit). . . . . . . . . . . . .  $ (23,499)  $ (57,261)  $        6,010   $       473
State income tax, net of federal tax
   benefit. . . . . . . . . . . . . .       (784)       (245)              --            --
Nondeductible goodwill. . . . . . . .      3,207      11,746               --            --
Tax gain on sale of unconsolidated
   subsidiary . . . . . . . . . . . .      1,330          --               --            --
Nondeductible restructing cost. . . .         --         869            7,779           489
Carry back of net operating loss
   recorded in equity . . . . . . . .         --      18,370               --            --
Other, net. . . . . . . . . . . . . .       (394)      2,005            2,100           245
Increase (decrease) in valuation
   allowance. . . . . . . . . . . . .         --      40,755          (15,869)         (960)
                                       ----------  ----------  ---------------  ------------
     Total. . . . . . . . . . . . . .  $ (20,141)  $  16,239   $           20   $       247
                                       ==========  ==========  ===============  ============
</TABLE>

     The  Job  Creation  and  Worker Assistance Act of 2002, among other things,
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 will be offset
entirely  by  income from discharge of indebtedness as a result of the Company's
reorganization.

                                      F-19
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     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 29,    JUNE 28,
                                                             2001        2002
                                                          ----------  ----------
<S>                                                       <C>         <C>
Current deferred tax assets:
  Uniform capitalization of interest . . . . . . . . . .  $     245   $     128
  Inventory reserve. . . . . . . . . . . . . . . . . . .      3,999         252
  Allowance for doubtful accounts. . . . . . . . . . . .      1,870         270
  Liabilities not deductible until paid. . . . . . . . .      1,193       1,266
  Net operating loss carry forward . . . . . . . . . . .      3,016          --
                                                          ----------  ----------
  Total before valuation allowance . . . . . . . . . . .     10,323       1,916
  Valuation allowance. . . . . . . . . . . . . . . . . .    (10,323)     (1,916)
                                                          ----------  ----------
      Current deferred tax assets. . . . . . . . . . . .  $      --   $      --
                                                          ==========  ==========

Noncurrent deferred tax assets (liabilities):
  Goodwill amortization and write-offs . . . . . . . . .  $  15,577   $  14,223
  Plant and equipment, principally due to differences in
    depreciation and estimated costs to dispose of
    manufacturing facilities . . . . . . . . . . . . . .       (281)     12,853
  Impairment of assets . . . . . . . . . . . . . . . . .      9,835           8
  Net operating loss carry forward . . . . . . . . . . .     10,373          --
                                                          ----------  ----------
  Total before valuation allowance . . . . . . . . . . .     35,504      27,084
  Valuation allowance. . . . . . . . . . . . . . . . . .    (35,504)    (27,084)
                                                          ----------  ----------
      Noncurrent deferred tax assets, net. . . . . . . .  $      --   $      --
                                                          ==========  ==========
</TABLE>

     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  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 28,
2002  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-20
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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, which 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 29,   JUNE 28,
                                              2001       2002
                                           ---------  ---------
<S>                                        <C>        <C>
     Total assets . . . . . . . . . . . .  $  13,089  $  17,494
                                           =========  =========

     Total liabilities. . . . . . . . . .  $   7,305  $  11,147
     Shareholders' equity . . . . . . . .  $   5,784  $   6,347
                                           =========  =========

     Total revenues . . . . . . . . . . .  $   1,425  $   2,706
     Net income . . . . . . . . . . . . .  $     984  $   1,107
                                           =========  =========
</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. The Company accounts for its
investment  in  Homestar  Mortgage  using  the  equity  method.

(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 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. The
balance  outstanding  at  June  28,  2002  was  $20.7  million,  consisting  of
approximately  $19.3  million  in  revolving  debt  and  $1.4  million under two
liquidating  lines. As the liquidating lines are paid down, additional borrowing
capacity  is  added  to  the revolving lines. The revolving portions of the line
carry  an annual interest rate of prime plus 1%. The liquidating portions of the
line  carried  no  interest  for  the first six months (until April 3, 2002) and
thereafter  accrues interest at a rate of prime plus 1% per annum (7.75% at June
29,  2001  and  5.75%  at  June  28, 2002). 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 $4.2 million at
June  28,  2002  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  28,  2002  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):


                                                  JUNE 29,     JUNE 28,
                                                    2001        2002
                                                -----------  ---------
     Floor plan payable . . . . . . . . . .     $    23,097  $  20,689
                                                ===========  =========


                                      F-21
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


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

<TABLE>
<CAPTION>
                                                                            JUNE 29,   JUNE 28,
                                                                              2001       2002
                                                                            --------------------
<S>                                                                         <C>        <C>
Note payable in monthly installments, including interest of 7.25%, due
  through March 2009; secured by real property . . . . . . . . . . . . . .  $     512  $      --
Notes payable in monthly installment, including interest of 10.0% due
  through August 2008; secured by real property. . . . . . . . . . . . . .        345        306
Note payable to Associates in monthly installments, principal only, due
  through July 2002; secured by lot signs and equipment. . . . . . . . . .         --         20
Note payable in monthly installments, including interest of 10.0% due
  through November 2010; secured by real property                                 144        131
Note payable in monthly installments, including interest of 10.0%, due
  through September 2007; secured by real property                                126        106
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                                                                 98         91
Note payable in monthly installments, including interest of 8.0%, due
  through July 2008; secured by real property                                      86         79
Bank revolving line of credit, bearing interest at prime plus 1% due
  June, 2003; secured by affiliate accounts receivable                             --        250
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         54         31
                                                                            ---------  ---------
     Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   1,365  $   1,014
Less current installments. . . . . . . . . . . . . . . . . . . . . . . . .        125        370
                                                                            ---------  ---------
     Notes payable, less current installments. . . . . . . . . . . . . . .  $   1,240  $     644
                                                                            =========  =========
</TABLE>

     The  aggregate  maturities  of notes payable for each of the five years and
thereafter  subsequent  to  June  28,  2002  are  as  follows  (in  thousands):

<TABLE>
<CAPTION>
<S>                                                              <C>
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  370
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      76
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      84
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      92
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     102
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . .     290
                                                                  ------
                                                                  $1,014
                                                                  ======
</TABLE>

     Following  is  a description of the notes payable classified as liabilities
subject  to  compromise  at  June  29,  2001:

     On  July  15,  1997,  the  Company  completed  the private placement of $61
million  of 8.32% Senior Unsecured Notes with an average life of 7.5 years and a
final  maturity  in July 2007.  The Company used the net proceeds from this debt
to  repay  approximately  $25  million in existing secured bank indebtedness and
approximately  $6  million  in  secured  debt  of  Brilliant  Carriers,  Inc.
Consequently,  the  Company  recorded  an extraordinary loss of $634,000 (net of
income  tax  benefit),  which represents the write-off of unamortized debt issue
costs as well as a prepayment penalty associated with the early repayment of the
bank  debt.

     On  September  30, 1998, the Company completed the private placement of $46
million  of  7.25%  Series  A  Senior  Unsecured Notes and $5.0 million of 7.14%
Series  B Senior Unsecured Notes with an average life of eight years and a final
maturity  in  September  2008. Such notes required semi-annual interest payments
and  equal  annual principal reductions to have begun in 2004. Proceeds from the
notes  were used to fund acquisitions and expansions with the remainder used for
general  corporate  purposes.



                                      F-22
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     The Company's amended loan agreements related to the 8.32% Senior Unsecured
Notes  issued  in  July  1997  and  the 7.25% Series A and 7.14% Series B Senior
Unsecured Notes described above contained certain requirements as to net working
capital,  consolidated  net  worth,  disposition of assets, additional long-term
debt,  redemption  of  common  stock,  payment  of  dividends  and prepayment of
subordinated  debt.  The terms of the agreements, as amended during fiscal 2000,
provide  for  quarterly,  rather  than semi-annual, payments of interest and for
maintenance  of certain financial covenants as well as possible increases in the
interest rate based on levels of the fixed charge coverage ratio. Because of the
operating  losses  reported by the Company during fiscal 2000, the Company would
not  have  been  in compliance with the fixed charge coverage requirement during
fiscal  2000  had the noteholders not granted waivers of such technical defaults
through September 29, 2000. In addition, based on actual charge coverage ratios,
an additional 35, 60 and 125 basis points was added to the interest rate for the
second,  third  and  fourth  quarter,  respectively,  of  fiscal  2000.

     Subsequent  to  year  end June 30, 2000, the Company reached agreement with
the  noteholders  as  to  a  temporary  amendment, which covered the period from
September  30,  2000 through, and including September 29, 2001.  Under the terms
of  this  amendment,  the  Company  was  required  to  meet  certain  financial
performance  and  condition  tests  based on its fiscal 2001 Business Plan.  The
tests  include  meeting  certain  interest  coverage  ratios, the maintenance of
minimum  levels  of  net  worth  and  limitations  on the amount of net debt the
Company  was  allowed to carry, expressed both in absolute terms and in relation
to  shareholders'  equity.  In  exchange,  the  Company  agreed  to  additional
quarterly  interest  payments of 1.75% per annum, above the stated rates on each
note.  An  additional  interest  charge  of  3.50% per annum was accrued for the
one-year  amendment period.  At September 30, 2001, the Company could have elect
to  pay  the  additional 3.5% interest or add it to the principal balance of the
original  debt.  In  addition, the Company was required to grant warrants, which
would  have  been exchangeable for common stock, beginning in January 2005.  The
warrants, which represent a total of 10% of the outstanding stock of the Company
(plus  warrants to purchase 10% of currently outstanding options and convertible
securities,  the  same  are exercised or converted), were exercisable at the par
value  ($0.05  per  share)  of  the  common  stock.  The  warrants  also  had
anti-dilution  protection  and  registration rights.  While the warrants had not
been  valued,  the  Company  estimated  that  all  these  changes  increased the
effective  cost  of  the  senior  notes  from  an  original  average  rate  of
approximately  7.8%  to  an  effective average rate of as much as 13.8 %, adding
approximately $ 6.7 million in interest charges for the period of the amendment.
The  Company  was  also  required  to  hire  a  consultant or advisor during the
one-year  amendment  period  to  assist  in  improving  overall  performance.

     The  Company  also  had  a  note  payable originating in March 1999 with an
original  principal balance of $4.4 million that had been reduced to a principal
balance  of  $2.9  million. The note required annual principal installments plus
interest  at  prime.

     The  notes  discussed  above  were  classified  as  liabilities  subject to
compromise  as  of  June 29, 2001. Interest was paid or accrued through December
2000.  Had the Company not filed for bankruptcy, contractual interest related to
the  notes  for  the  six-month  period  ended  June  29,  2001  would have been
approximately  $7.4  million.


                                      F-23
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(13) LIABILITIES  SUBJECT  TO  COMPROMISE

     Liabilities  subject  to compromise consist of the following as of June 29,
2001  (in  thousands):

<TABLE>
<CAPTION>
<S>                                                    <C>
Secured liabilities:
  Floor plan payable. . . . . . . . . . . . . . . . .  $  9,443
Unsecured liabilities:
  Senior notes payable. . . . . . . . . . . . . . . .   112,000
  Notes payable . . . . . . . . . . . . . . . . . . .     2,930
  Other payables and accrued expenses . . . . . . . .    24,383
                                                       --------
     Total. . . . . . . . . . . . . . . . . . . . . .  $148,756
                                                       ========
</TABLE>

     These  liabilities  subject  to compromise were discharged on the Effective
Date,  by  operation of the Plan, including forgiveness of debt of $139 million.

(14) 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.  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 4,999,900 shares underlie options authorized
under  the  Company's 2001 Management Incentive Program.   Options for 4,949,900
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.

     In  2001,  the  Company  adopted  the  American  Homestar  Corporation 2001
Management  Incentive  Program  (the  "Stock Option Plan") under which 4,999,900
shares  of  the  Series  M  common  stock  are available through the issuance of
nonqualified  stock  options to certain members of management and key employees.
At  June 28, 2002, options for 4,949,900 shares have been granted at an exercise
price  of  $1.35.  No  options  were  exercised  or vested during the period. No
options  were  granted  during  2001.

     The  Company  applies  APB  Opinion  25  and  related  Interpretations  in
accounting  for  stock options. In compliance with SFAS No. 123, the Company has
elected  to  provide the pro forma disclosure. As such, the Company's net income
and  earnings per share for nine months ended 2002 adjusted to reflect pro forma
amounts  are  indicated  below:

<TABLE>
<CAPTION>
                                                               NINE MONTHS
                                                                  ENDED
                                                              JUNE 28, 2002
                                                             ---------------
<S>                                                          <C>
Net income
  As reported. . . . . . . . . . . . . . . . . . . . . . . .  $        1,264
  Pro forma. . . . . . . . . . . . . . . . . . . . . . . . .  $        1,009

Earnings per share
  As reported. . . . . . . . . . . . . . . . . . . . . . . .  $         0.13
  Pro forma. . . . . . . . . . . . . . . . . . . . . . . . .  $         0.10
</TABLE>


                                      F-24
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     The  fair  value of stock options granted in 2002 was estimated on the date
of  grant  using  the  "minimum value" method as the stock was not trading as of
August  16, 2002. The weighted average fair values and related assumptions were:

<TABLE>
<CAPTION>
                                                                  NINE MONTHS
                                                                     ENDED
                                                                 JUNE 28, 2002
                                                                ---------------
<S>                                                             <C>
     Weighted average fair value . . . . . . . . . . . . . . .  $         1.35
     Market interest rate. . . . . . . . . . . . . . . . . . .            4.41%
</TABLE>


(15) 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 30, 2000, June
29, 2001 and one sales center at June 28, 2002.  During the years June 30, 2000,
June  29, 2001, three months ended September 29, 2001 and nine months ended June
28,  2002,  the  Company paid MOAMCO approximately $86,000, $91,000, $22,000 and
$67,000,  respectively,  for  these  operating  leases  (see  note  16).

(16) 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,  the  Company  was  at  risk  to  repurchase approximately $2.9 million of
manufactured  homes  and  has  provided  for  estimated net repurchase losses at
approximately  $0.2  million.

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  30,  2000  and  June  29,  2001  the Company contributed
approximately  $129,000  and  $39,000  to  the  Savings  Plan.


                                      F-25
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


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 30,
2000,  June  29,  2001,  the  three months ended September 29, 2001 and the nine
months ended June 28, 2002 were $6,558,000, $4,973,000, $410,000 and $1,472,000,
respectively.

     Aggregate  annual  rental  payments  that  include  amounts  due to related
parties,  on  future  lease  commitments  at  June  28, 2002 were as follows (in
thousands):

<TABLE>
<CAPTION>
                                           TOTAL LEASE     AMOUNTS DUE
                                           COMMITMENTS   RELATED PARTIES
                                          ------------  ----------------
<S>                                       <C>           <C>
            2003 . . . . . . . . . . . .  $      1,622  $             91
            2004 . . . . . . . . . . . .           579                --
            2005 . . . . . . . . . . . .           180                --
            2006 . . . . . . . . . . . .            80                --
            2007 . . . . . . . . . . . .            62                --
            Thereafter . . . . . . . . .            --                --
                                          ------------  ----------------
                                          $      2,523  $             91
                                          ============  ================
</TABLE>


                                      F-26
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(17) 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 30, 2000
Revenues from external customers .  $352,472   $      205,836   $   15,728   $          --   $ 574,036
Intersegment revenues. . . . . . .      (194)         158,932       10,804        (169,542)         --
Interest expense . . . . . . . . .    14,505            4,465        9,953         (10,557)     18,366
Depreciation and amortization. . .     9,014            5,876        1,603              --      16,493
Segment profit (loss) before
Income taxes and earning in
affiliates . . . . . . . . . . . .   (45,052)          (2,389)     (22,500)          2,801     (67,140)
Segment assets . . . . . . . . . .   194,104          149,743      267,836        (262,657)    362,233
Expenditures for segment assets. .     4,339            3,736          799              --       8,874

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              773           --              --         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
</TABLE>


                                      F-27
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     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.

(18) SELECTED  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)

     The  following  presents  a  summary  of  the unaudited quarterly financial
information  for the years ended June 29, 2001 and June 28, 2002 (in thousands):

<TABLE>
<CAPTION>
                                              FIRST         SECOND      THIRD     FOURTH
                                             QUARTER        QUARTER     QUARTER   QUARTER     TOTAL
                                        -----------------  ----------  ---------  ---------  ----------
                                             (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2001                                                     PREDECESSOR CO.
                                        ---------------------------------------------------
<S>                                     <C>                 <C>         <C>        <C>       <C>
  Revenues . . . . . . . . . . . . . .  $        120,323    $  72,242   $ 16,689   $ 32,520  $ 241,774
  Operating income (loss). . . . . . .           (3,783)     (143,906)    (5,089)     2,389   (150,389)
  Net income (loss). . . . . . . . . .           (9,290)     (164,604)    (6,171)       857   (179,208)
  Earnings per share-basic
  and diluted . . . . . . . . . . . . .             N/A           N/A        N/A        N/A        N/A

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
  Loss  per share-basic
    and diluted. . . . . . . . . . . .              N/A     $    0.10   $  (0.01)  $   0.04  $ 0.13 (2)
</TABLE>


---------------------
(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


                                      F-28
<PAGE>
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


                          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 28, 2002
(Successor  Company)  and  June  29,  2001 (Predecessor Company) and the related
consolidated  statements  of operations, shareholders' equity (deficit) and cash
flows  for  the  nine  months ended June 28, 2002 (Successor Company), the three
months  ended  September  29, 2001 and the year ended June 29, 2001 (Predecessor
Company)  and  have  issued  our  report thereon dated August 16, 2002 (included
elsewhere  in  this  Annual  Report on Form 10-K).  Our audits also included the
financial  statement  schedule as of June 28, 2002 and June 29, 2001 and for the
nine  months  ended  June  28,  2002 (Successor Company), the three months ended
September  29,  2001  and the year ended June 29, 2001 (Predecessor Company), as
listed  in  Item  14  of  this Annual Report on Form 10-K.  This schedule is the
responsibility of the Company's management.  Our responsibility is to express an
opinion  based  on our audits.  In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial statements
taken  as  a whole, presents fairly in all material respects the information set
forth  therein.



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


Houston, Texas
August 16, 2002


                                      F-29
<PAGE>
                                                                     SCHEDULE II
                 AMERICAN HOMESTAR CORPORATION AND SUBSIDIERIES
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                            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 30, 2000
  Warranty and service costs  $     8,368  $    25,867       $        --  $1,874  (1)  $    27,360   $     8,749
  Restructuring reserve       $         -  $         -       $        --  $7,458  (2)  $         -   $     7,458

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  (3)  $        --  $   --       $   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  $        --       $        --  $   --       $    (1,774)  $     3,651
</TABLE>

---------------------
(1)  Amount represents additional restructuring reserve for warranty and service
     costs.
(2)  Amount represents restructuring reserve.
(3)  Amount represents reorganization costs related to liquidation of non-core
     operational and Plan obligation costs accrued in December 2000.


                                      F-30
<PAGE>
                                Index 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

3.4*  Charter for the Compensation Committee of the Company, dated September 18,
      2001

10.1* Employment  Agreement, effective as of October 3, 2001, by and between the
      Company  and  Finis  F.  Teeter

10.2* American Homestar Corporation 2001 Management Incentive Program, effective
      as  of  October  3,  2001

10.3* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Finis  F.  Teeter.

10.4* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Craig  A.  Reynolds.

10.5* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  Charles  N.  Carney,  Jr.

10.6* Non-Qualified  Stock Option Agreement, effective as of October 3, 2002, by
      and  between  the  Company  and  James  J.  Fallon.

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

23.1* Consent  of  KPMG  LLP

99.1* Certification  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.

99.2* Certification  pursuant  to 18 U.S.C. Section 1350, as adopted pursuant to
      Section  906  of  the  Sarbanes-Oxley  Act  of 2002 for Craig A. Reynolds.

____________
*  Filed  herewith


<PAGE>