SILVERLEAF'S 1998 VACATION OWNERSHIP SALES INCREASE 99%

Source: Silverleaf Resorts, Inc.

March 4, 1999
Silverleaf Resorts, Inc. (NYSE:SVR), having completed its first full year as a public company, this week reported its fourth quarter and fiscal 1998 results. Robert E. Mead, Silverleaf's Chairman and CEO, stated, "This year was one of major accomplishments for the Company. These accomplishments resulted in significant growth and diversification for Silverleaf, and provide a strong base for 1999 and beyond."

For the three month period ending December 31, 1998, total revenues were $41,346,000, an increase of 95 percent when compared to $21,187,000 for the same period in 1997. Vacation interval sales, the most significant contributor to Silverleaf's revenues, were $33,217,000, an increase of 99 percent over 1997 sales of $16,719,000. EBITDA for the quarter increased 101 percent to $9,408,000 from $4,678,000 in 1997. Net income for the quarter increased 70.4 percent to $3,883,000 or diluted net income per share of $0.30, compared to net income of $2,279,000 and diluted net income per share of $0.20 in 1997. First Call consensus estimates were $0.30 per share.

For the year ended December 31, 1998, total revenues were $160,756,000, an increase of 89 percent compared to $85,058,000 in 1997. Vacation Interval sales were $135,583,000, an increase of 97 percent, compared to $68,682,000 in 1997. EBITDA for the year increased 60 percent to $40,290,000 from $25,145,000 in 1997. Net income for the period was $18,378,000 or diluted net income per share of $1.45, compared to net income of $11,960,000 and diluted net income per share of $1.22 in 1997. First Call consensus estimates were $1.44 per share.

Mead continued, "In 1998 we accomplished our goals to geographically diversify the Company, strengthen our financial position and prepare for future growth. We completed 1998 with more than double the number of resorts we owned or managed at the end of 1997 and our owner base has increased to 78,000 from 35,000.""These results demonstrate the success of our growth strategy," emphasized Mead. "We have further strengthened our position in our core 'drive-to' markets and expanded our presence in destination locations. The effectiveness of Silverleaf's cross-marketing system from our drive-to resorts into our destinations is demonstrated by the strong results from these destination resorts."

At the time of the Company's IPO in June 1997, Silverleaf had seven resorts in Texas and Missouri with an owner base of 30,000. At the end of 1998, Silverleaf managed or owned resort locations in 11 states with 78,000 owners. Since its IPO, Silverleaf has launched new drive-to resorts near Chicago, St. Louis, and Atlanta, and new destination resorts in the Berkshire Mountains (upgraded from a drive-to resort in 1998) and Galveston, Texas. Silverleaf owns drive-to development property proximate to Kansas City and the Pennsylvania Poconos and additional destination resort development property in Las Vegas. In addition to its internal development program, in May 1998, Silverleaf acquired certain assets of Crown Resorts, LLC an operator of eight timeshare resorts located from Pennsylvania through the southern United States.

In April 1998, Silverleaf raised $46 million through a secondary offering of two million shares of common stock and also issued $75 million in Senior Subordinated Debt, providing the financial resources to accomplish its growth plan and strengthen its balance sheet. Silverleaf has a debt-to-equity ratio of .9 to 1 as of December 31, 1998.

"Industry analysts see strong expansion for the timeshare industry in the next decade," stated Mead, "and we feel Silverleaf is extremely well positioned to benefit from this trend. We intend to continue our growth through the following areas:

• Internal growth at existing resorts. Our existing resorts have room for expansion and the demand at these resorts remains strong. Additionally, the new resorts we added at the end of 1997 and in 1998 will continue to mature and contribute to sales.
• Internal growth through upgrade sales. Upgrade sales represent our highest margin sales, and with additional destination resorts and other upgrade opportunities such as our President's units, we have the opportunity to leverage our expanding owner base and increase our upgrade sales.
• Internal growth through new resorts. In January we opened the sales center at our Apple Mountain Resort near Atlanta and have just broken ground on the Silverleaf Seaside Resort in Galveston, Texas. We are in the predevelopment phase at our resort in the Poconos and in Las Vegas and own land near Kansas City.
• External growth through acquisition. On an opportunistic basis, we will assess acquisition opportunities that fit within our strategy."

Mead concluded, "1998 was a key year for proving the success of Silverleaf's business model. We have doubled the number of our resorts and reached critical geographic diversity. Our strategy going forward builds on the strength of our successful drive-to approach and leverages the opportunities and growth afforded by cross-marketing our destination resorts."