Monaco Finance, Inc. Discontinues Carmart Operations As Part Of Strategic Refocus On Core Lending Business; Sub-Prime Auto Lender Forecasts Profit From Continuing Operations In 1995

Business Wire, Feb 13, 1996

DENVER, Colo.--(BUSINESS WIRE)--Feb. 13, 1996--Monaco Finance, Inc. (Nasdaq National Market: MONFA) announced today that it intends to discontinue its CarMart retail used car sales and the associated financing operations related to its CarMart business as of February 29, 1996. As a result, the Company expects to report a $1.9 million loss, net of taxes, in 1995 from discontinuing and disposing of the CarMart sales and financing operations including costs incurred during 1996 related thereto. The Company will reallocate approximately $2 million of capital previously used to finance its CarMart automobile inventory to its core business of purchasing and serving sub-prime automobile installment sales contracts.

The Company estimates that income from continuing operations, net of taxes, for the year ended December 31, 1995 was approximately $525,000 or $.10 per share, and that shareholders' equity at December 31, 1995 was approximately $22.7 million, up from $14.2 million at December 31, 1994. The increase in shareholders' equity in 1995 primarily is due to the issuance of 1,949,000 Class A common shares upon the exercise of outstanding stock purchase warrants and the issuance of 360,000 Class A common shares upon conversion of certain of the Company's debentures.

Morris Ginsburg, Chairman, President and CEO of Monaco, commented, "Discontinuing our retail operations enables us to focus our energies and capital on what Monaco does best -- purchasing and servicing sub-prime automobile installment contracts. Although the CarMart retail sales and financing business had been profitable in prior years, the changing economics of the used car market no longer make sense for us to compete with the franchise dealerships and the used car 'superstores' that are entering the market."

Commenting further, Mr. Ginsburg said, "We believe that the opportunities for growth are much greater in our core auto lending business. We have intensified our efforts to increase our indirect loan purchase programs in 1996 by hiring 4 additional sales representatives in January and February and we intend to add others throughout the year." Monaco currently is conducting business in 22 states through 13 representatives.

Mr. Ginsburg concluded, "With the combination of our strong capital structure and investing over $1 million in the development of state-of-the-art management information systems, the Company is poised to continue meeting the needs of the sub-prime automobile finance industry in 1996 and thereafter."

Monaco is a leading indirect lender to car buyers who cannot obtain bank financing. Under its specialized automobile finance programs it acquires sub-prime automobile installment sales contracts primarily from franchised car dealerships.

CONTACT: MONACO FINANCE, INC.

Morris Ginsburg (303) 592-9411

or

MWW/Strategic Communications, Inc.

Media: Michael W. Kempner - (mkempner@mww.com)

Investors: Ronald Stack - (rstack@mww.com)

(201) 507-9500