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                                                                    EXHIBIT 99.1

                 PALM HARBOR AGREES TO ACQUIRE NEWCO AFFILIATE


DALLAS, Texas (July 5, 1996) - Palm Harbor Homes, Inc. (Nasdaq/NM:PHHM) today
announced that an agreement of merger involving the acquisition of Newco Homes,
Inc., a Texas-based retailer of manufactured homes, has been signed.  Palm
Harbor co-founded Newco in 1986 and currently owns 41.6% of that company's
outstanding shares.  Under the terms of the transaction, Palm Harbor will
acquire the remaining 58.4% of Newco's shares for a combination of cash and
common shares of Palm Harbor valued at approximately $52 million.  Consummation
of the transaction remains subject to certain regulatory approvals, including
the provisions of the Hart-Scott-Rodino Act, and completion of certain due
diligence procedures.  Closing is expected to occur within approximately 30
days.

     Lee Posey, chief executive officer of Palm Harbor, remarked, "This
agreement represents not only an attractive financial opportunity for Palm
Harbor, but is also an important strategic step in our plan to increase sales
through company-owned superstores.  Newco's 21 superstores are principally
located in Texas and New Mexico, many of which operate under the name "Palm
Harbor Village."  These superstores have consistently generated sales volumes
two or three times greater than industry averages.  The addition of these
superstores should translate into incremental annual sales of approximately
$100 million."

     Palm Harbor reported net sales of $417.2 million for the fiscal year ended
March 29, 1996.

     Palm Harbor Homes is one of the nation's leading manufacturers and
marketers of multi-section manufactured homes.  The Company markets nationwide
through vertically integrated operations, encompassing manufacturing,
marketing, financing and insurance.