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Crown Group Reports 'Significant Increases' in Revenues and Earnings

December 12, 2000

Crown Group, Inc., which is primarily engaged in automotive retailing and specialty finance, has announced substantially higher revenues and earnings from operations for the second quarter and first half of FY2001.

For the three months ended Oct. 31, 2000, revenues increased 97 percent to $89.6 million, compared with $45.5 million in the second quarter of the previous fiscal year. Net income from ongoing operations for the most recent quarter increased 230 percent to $2,069,986, compared with $626,887 in the year-earlier period. Diluted earnings per share from ongoing operations increased 317 percent to $0.25 in the quarter ended Oct. 31, 2000, versus $0.06 in the quarter ended Oct. 31, 1999.

Including a one-time after-tax write-down of $520,000 associated with the Company's El Salvador gaming operations, which management expects to sell in the near future, earnings from operations for the second quarter of FY2001 totaled $1,549,986, or $0.19 per diluted share. Earnings per share were calculated using approximately 8.3 million average diluted shares outstanding in the most recent quarter, compared with approximately 10.0 million average diluted shares outstanding in the prior-year period. The decrease in average shares outstanding was attributable to the company's repurchase of shares in the open market and in private transactions throughout the past year.

Revenues for the second quarter of FY2001 were derived as follows (before intercompany eliminations): Automotive Sales and Finance -- $84.9 million; Precision IBC -- $1.8 million; Concorde Acceptance -- $2.3 million; and Other -- $0.9 million.

"We were very pleased with the overall performance of our subsidiaries for the second fiscal quarter," said Edward R. McMurphy, president and CEO of Crown Group. "Our automotive subsidiaries turned in strong performances this quarter, as we maintained our focus on providing customers with dependable used cars at affordable prices.

"Precision IBC performed in line with management expectations, while Concorde Acceptance came in slightly below projections due largely to timing differences associated with revenue recognition. As we stated in the Fiscal 2000 annual report, we expect to sell our El Salvador gaming operations before fiscal year-end and, therefore, elected to write down this investment in the second quarter."

Revenues increased 83 percent to $172.0 million in the six months ended Oct. 31, 2000, compared with revenues of $94.1 million in the six months ended Oct. 31, 1999. Net income from ongoing operations rose 51 percent to $4,837,128 in the most recent six-month period, versus $3,205,000 in the corresponding period of the previous fiscal year. Diluted earnings per share from ongoing operations increased 84 percent, to $0.57 in the first half of FY2001, compared with $0.31 in the six months ended Oct. 31, 1999.

Earnings from ongoing operations exclude a $7.0 million after-tax gain on the sale of Casino Magic Neuquen during the first half of FY2000, and a $520,000 after-tax charge in connection with the write-down of El Salvador assets in the first half of FY2001. Earnings per share were calculated using 8,440,688 average diluted shares outstanding in the first half of FY2001, compared with 10,277,549 average diluted shares outstanding in the prior-year period. The decrease in average shares outstanding was attributable to the Company's repurchase of shares in the open market and in private transactions.

"We are optimistic regarding the second half of our fiscal year, despite predictions of a slowdown in the economy," McMurphy said. "Unlike the new car retail industry, the used car industry is inherently counter-cyclical and typically performs well under weak economic conditions. Over the remainder of the fiscal year, we will remain highly focused upon improving the performance of the loan portfolios at our automotive subsidiaries while continuing to expand into new markets. During the first half of Fiscal 2001, Car-Mart opened four new dealerships, including two in Kentucky, marking its initial entry into that market. Paaco also added another dealership in Houston this year, where it has experienced considerable success in selling quality used cars to a growing Latino population segment."

Through its automotive subsidiaries, Crown Group, Inc. currently owns and operates 71 dealerships in seven states and is the second largest automotive retailer focused exclusively on the "buy here - pay here" used-car market. The company's America's Car-Mart subsidiary operates 46 dealerships in primarily rural areas throughout the Southwestern and Midwestern United States, and is considered one of the largest buy here - pay eere franchises in the country.

Smart Choice Automotive Group operates 12 dealerships under the First Choice brand name in Florida and 13 dealerships and 3 collision and repair centers under the Paaco name in Texas, all of which operate in large metropolitan areas. All of the company's dealerships sell only used cars and light trucks to predominantly non-banked customers.

Both Car-Mart and Smart Choice finance approximately 98 percent of the vehicles they sell and perform all underwriting, financing and servicing duties related to these retail installment contracts. The primary objective of both Car-Mart and Smart Choice is to provide quality vehicles, courteous service, flexible payment arrangements and a friendly atmosphere to their customers, according to McMurphy.

For additional information, contact Edward R. McMurphy, CEO, or Harlan Foster, VP Corporate Development at 972/717-3423 or RJ Falkner & Company, Investor Relations Counsel at 800/377-9893 or via e-mail at info@rjfalkner.com.

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