COACHMEN INDUSTRIES INC, 424B4, 1996-11-15

COACHMEN INDUSTRIES INC
424B4, 1996-11-15
MOTOR HOMES

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<PAGE> 1
333-14579
333-16097

Rule 424B4

1,800,000 SHARES

COA LOGO

COACHMEN INDUSTRIES, INC.
COMMON STOCK
------------------------

All 1,800,000 shares of Common Stock offered hereby are being sold by
Coachmen Industries, Inc. (the "Company"). The Company's Common Stock is listed
on the New York Stock Exchange and trades under the symbol "COA." The last
reported sale price of the Common Stock on the New York Stock Exchange on
November 13, 1996 was $24.50 per share.

SEE "INVESTMENT CONSIDERATIONS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Per Share.................................... $24.50 $1.185 $23.315
Total (3).................................... $44,100,000 $2,133,000 $41,967,000
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other information.
(2) Before deducting offering related expenses payable by the Company estimated
at $315,000.
(3) The Company has granted the Underwriters an option, exercisable within 30
days of the date hereof, to purchase up to an aggregate of 270,000
additional shares of Common Stock at the Price to Public per share, less
the Underwriting Discount, for the purpose of covering over-allotments, if
any. If the Underwriters exercise such option in full, the Price to Public,
Underwriting Discount and Proceeds to Company will be $50,715,000,
$2,452,950 and $48,262,050, respectively. See "Underwriting."

------------------------

The shares of Common Stock are offered by the Underwriters when, as and if
received and accepted by them, subject to their right to withdraw, modify,
cancel or reject orders in whole or in part and subject to certain other
conditions. It is expected that delivery of certificates representing the shares
will be made against payment on or about November 19, 1996 at the offices of
Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center, New York
10281.

------------------------

Oppenheimer & Co., Inc.

The date of this Prospectus is November 14, 1996
<PAGE> 2

[Picture of Coachmen Catalina Travel Trailer]

[Picture of Chevy Express Van Conversion by Coachmen Vans]

[Picture of Shasta Fifth Wheel Travel Trailer]

[Picture of Shasta Class C Mini Motorhome]

[Picture of Georgie Boy Cruise Air Class A Motorhome]

[Picture of The Charleston by All American Homes--Modular Home]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET, OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE> 3

AVAILABLE INFORMATION

Coachmen Industries, Inc. ("Coachmen" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements, the registration statement
related to this offering and other information filed by the Company may be
inspected and copied at the public reference facilities of the Commission
located at 450 Fifth Street N.W., Washington D.C. 20549 and at the Commission's
regional offices located at Seven World Trade Center, Suite 1300, New York, New
York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can also be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.
Washington, D.C. 20549. In addition, reports, proxy statements and other
information filed by the Company may be inspected at the offices of the New York
Stock Exchange (the "NYSE") upon which the Common Stock of the Company is
traded. The Commission maintains a Web site that contains reports, proxy
statements and other information that has been filed electronically by the
Company with the Commission. The address of the Commission's Web site is
http://www.sec.gov.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents have been filed with the Commission (File No.
1-7160) pursuant to the Exchange Act and are incorporated herein by reference
and made a part of this Prospectus:

1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;

2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996;

3. The Company's Current Report on Form 8-K dated August 6, 1996;

4. Description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A; and

5. Description of the Company's Common Share Purchase Rights contained
in the Company's Registration Statement on Form 8-A.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Company's common stock (the "Common
Stock") shall be deemed to be incorporated herein by reference and made a part
of this Prospectus from the respective filing dates of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

The Company will provide without charge a copy of any and all information
that has been incorporated by reference in the Registration Statement of which
this Prospectus is a part (other than exhibits to such information, unless such
exhibits are specifically incorporated by reference into such information) upon
written or oral request to the Company at its headquarters, 601 East Beardsley
Avenue, Elkhart, Indiana 46514, attention: Secretary (telephone number:
219-262-0123).

3
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the information
appearing elsewhere in this Prospectus and in the documents and financial
statements included and incorporated herein by reference. Unless otherwise
indicated, the information in this Prospectus does not give effect to the
exercise of the Underwriters' over-allotment option described under
"Underwriting." All share and per share data have been retroactively adjusted to
give effect to a two-for-one stock split effective August 28, 1996.

THE COMPANY

Coachmen is one of the largest full-line producers of recreational vehicles
("RVs") and is the largest builder of modular homes in the country. The
Company's RVs are marketed under various brand names including Coachmen, Shasta
and Viking through approximately 1,200 independent dealers located in 49 states
and internationally and six Company-owned dealerships. In 1995, according to the
Recreational Vehicle Industry Association ("RVIA"), RV manufacturers shipped
approximately 247,000 units (excluding van conversions) having an aggregate
retail value of approximately $6 billion. The Company's market share as measured
by wholesale unit shipments grew from 5.7% in 1992 to 7.5% in 1995. Modular
homes are manufactured by the Company's All American Homes operation which sells
homes through approximately 300 builder/dealers.

Recreational vehicles are either driven or towed and serve as temporary
living quarters for camping, travel and other leisure activities. Recreational
vehicles may be categorized as motorhomes, travel trailers, camping trailers or
truck campers. A motorhome is a self-powered mobile dwelling built on a special
heavy duty chassis. A travel trailer is a mobile dwelling designed to be towed
behind another vehicle. Camping trailers are smaller towed units constructed
with sidewalls that may be raised up and folded out. Truck campers are designed
to be mounted on the bed of a pickup truck. The Company also produces a number
of parts and supplies for the RV and other related industries. These components,
which are used in the Company's products as well as sold to other RV
manufacturers, include van tops, running boards and furniture. In addition, the
Company has developed a line of ergonomically designed office chairs. The
Company manufactures RVs and related components in Indiana, Michigan, Georgia
and Oregon.

The Company's factory-produced modular homes are designed to serve as
permanent living quarters and are constructed on a conventional wood floor
system, similar to those used in traditional site-built houses. Modular homes
are transported on special carriers to a permanent location where the home is
usually set by crane on a basement or crawl space foundation. The Company's
modular homes are produced on an assembly line basis in plants located in
Indiana, Iowa, North Carolina and Tennessee.

The table below sets forth the composition of the Company's net sales for
each of the last three years and the nine months ended September 30, 1995 and
1996 (dollar amounts in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS
-------------------------------------------------- ENDED SEPTEMBER 30,
--------------------------------
1993 1994 1995
-------------- -------------- -------------- 1995 1996
-------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Vehicles:
Motorhomes............. $159,057 48% $177,583 45% $279,917 54% $213,313 55% $255,990 55%
Travel Trailers........ 67,999 21 98,147 25 102,229 20 79,185 20 93,796 20
Camping Trailers....... 9,757 3 10,764 3 12,728 2 10,495 2 15,559 3
Truck Campers.......... 3,512 1 3,117 1 3,748 1 3,293 1 2,011 --
Parts and Supplies..... 25,724 8 31,397 8 33,991 7 25,961 7 30,625 7
Ambulances............. 15,035 4 6,423 1 -- -- -- -- -- --
-------- --- -------- --- -------- --- -------- --- -------- ---
Total Vehicles....... 281,084 85 327,431 83 432,613 84 332,247 85 397,981 85
Housing.................. 48,427 15 66,593 17 83,249 16 58,689 15 71,618 15
-------- --- -------- --- -------- --- -------- --- -------- ---
Total.............. $329,511 100% $394,024 100% $515,862 100% $390,936 100% $469,599 100%
======== === ======== === ======== === ======== === ======== ===
</TABLE>

4
<PAGE> 5

INDUSTRY DEMOGRAPHICS

The industry is currently experiencing favorable demographic trends.
According to a 1994 University of Michigan study sponsored by the RVIA (the
"Michigan Study"), approximately 8.2 million households owned RVs (including van
conversions) in 1993, up from 7.7 million households in 1988 and 5.8 million
households in 1980. Recreational vehicles are purchased by adults in all age
ranges, but the highest market penetration is with those in the 50 to 65 age
group. While the average RV owner is 48 years old, the typical motorhome and
travel trailer owners are 63 and 52 years old, respectively. According to the
Census Bureau of the U.S. Department of Commerce, the number of Americans aged
55 to 64 years old is projected to grow 12.1% from 1993 through the year 2000
compared to 7.1% for the overall population. Baby Boomers are defined as those
born between the years 1946 and 1964, thus the leading edge of the Baby Boom
generation began turning 50 years of age in 1996. As Baby Boomers enter and
travel through the important 50 to 65 age group, they represent the potential
for a secular uptrend in the RV industry.

BUSINESS STRATEGY

The Company's business strategy is to consistently grow its earnings by
remaining focused primarily on the two major industries it currently serves: RVs
and housing. Management also intends to grow its parts and supply businesses,
which manufacture products related to the RV and similar industries.

The Company's objective is to reduce the impact of the cyclical nature of
its RV and modular home businesses by (i) emphasizing its long-standing
reputation for quality and customer service, and (ii) utilizing its financial
strength to opportunistically acquire other businesses, thereby increasing its
market share as a means of providing consistent earnings growth. The Company
seeks to increase its market share in both the RV and the modular housing
industries through growth in existing operations as well as through strategic
acquisitions and new plant openings.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company................ 1,800,000 shares
Common Stock Outstanding After the Offering........ 16,910,530 shares
Use of Proceeds.................................... For general corporate purposes,
including working capital requirements,
expenditures for plant and equipment,
and the potential acquisition of
compatible businesses
New York Stock Exchange Symbol..................... COA
</TABLE>

5
<PAGE> 6

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
(UNAUDITED)
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
CONSOLIDATED INCOME STATEMENT ---------------------------------------------------- -------------------------
DATA: 1991 1992 1993 1994(1) 1995(2) 1995(2) 1996
-------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales..................... $231,368 $292,790 $329,511 $394,024 $515,862 $390,936 $469,599
Cost of goods sold............ 205,192 250,609 281,822 335,567 444,627 337,752 401,329
-------- -------- -------- -------- -------- -------- --------
Gross profit.............. 26,176 42,181 47,689 58,457 71,235 53,184 68,270
-------- -------- -------- -------- -------- -------- --------
Operating expenses:
Selling and delivery........ 19,180 19,041 19,232 20,080 25,593 19,586 20,545
General and
administrative............ 19,843 15,302 15,789 15,877 18,983 14,429 16,152
-------- -------- -------- -------- -------- -------- --------
39,023 34,343 35,021 35,957 44,576 34,015 36,697
-------- -------- -------- -------- -------- -------- --------
Operating income (loss)... (12,847) 7,838 12,668 22,500 26,659 19,169 31,573
-------- -------- -------- -------- -------- -------- --------
Nonoperating income (expense):
Interest expense............ (3,573) (2,917) (2,028) (1,481) (3,142) (2,306) (1,239)
Interest income............. 495 435 474 667 1,306 891 979
Gain on sale of properties,
net....................... 2,362 402 225 889 793 786 728
Other, net.................. 282 2,504 1,357 237 2,341 714 958
-------- -------- -------- -------- -------- -------- --------
(434) 424 28 312 1,298 85 1,426
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes and
cumulative effect of
accounting change....... (13,281) 8,262 12,696 22,812 27,957 19,254 32,999
Income taxes.................. 153 125 -- 8,028 10,408 7,155 12,024
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
cumulative effect of
accounting change....... (13,434) 8,137 12,696 14,784 17,549 12,099 20,975
Cumulative effect of
accounting change........... -- -- -- -- -- -- 2,294
-------- -------- -------- -------- -------- -------- --------
Net income (loss)......... $(13,434) $ 8,137 $ 12,696 $ 14,784 $ 17,549 $ 12,099 $ 23,269
======== ======== ======== ======== ======== ======== ========
Weighted average number of
shares of Common Stock
outstanding(3).............. 14,327 14,362 14,608 14,744 14,882 14,871 15,029
======== ======== ======== ======== ======== ======== ========
Net income (loss) per share of
Common Stock(3)............. $ (.94) $ .57 $ .87 $ 1.00 $ 1.18 $ .81 $ 1.55
======== ======== ======== ======== ======== ======== ========
Cash dividends per share of
Common Stock(3)............. $ .04 $ .04 $ .095 $ .12 $ .14 $ .105 $ .135
======== ======== ======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, 1996
-------------------------
CONSOLIDATED BALANCE SHEET DATA: ACTUAL AS ADJUSTED(4)
-------- --------------
<S> <C> <C>
Working capital............................................................. $ 70,509 $112,161
Total assets................................................................ 187,919 229,571
Long-term debt.............................................................. 10,260 10,260(5)
Total shareholders' equity.................................................. 113,321 154,973
</TABLE>

- -------------------------
(1) The operating assets and business of the North Carolina division of Muncy
Building Enterprises, L.P. were acquired on September 23, 1994, and certain
assets and the business of Southern Ambulance Builders, Inc., were sold on
April 29, 1994. See Note 9 of Notes to Consolidated Financial Statements.
(2) Georgie Boy Mfg., Inc. was acquired on January 3, 1995. See Note 9 of Notes
to Consolidated Financial Statements.
(3) All share and per share data have been retroactively adjusted to give effect
to a two-for-one stock split effective August 28, 1996.
(4) Adjusted to give effect to this offering and the application of the net
proceeds therefrom. See "Use of Proceeds."
(5) This table does not reflect the issuance by a subsidiary of the Company on
November 13, 1996 of a $5,000,000 promissory note obligation in connection
with an industrial revenue bond.

6
<PAGE> 7

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Certain statements contained in this Prospectus, such as those concerning
the Company's business strategy, the expected future demand for RVs and modular
housing, capital requirements and other statements regarding matters that are
not historical facts are forward looking statements (as such term is defined in
the rules promulgated pursuant to the Securities Act of 1933, as amended (the
"Securities Act")). Because such forward looking statements include risks and
uncertainties, actual results may differ materially from those expressed in or
implied by such forward looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, those discussed
herein under "Investment Considerations," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business." The Company
undertakes no obligation to release publicly the results of any revisions to
these forward looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

INVESTMENT CONSIDERATIONS

Prospective investors should read the entire Prospectus carefully and
should consider, among other things, the investment considerations set forth
below.

CYCLICALITY OF BUSINESS; POTENTIAL FLUCTUATIONS IN OPERATING RESULTS

The RV and housing industries are highly cyclical. Companies within these
industries are subject to volatility in operating results due to external
factors such as economic, demographic and political changes. These factors
include fuel availability and fuel prices, overall consumer confidence and
general economic conditions, the level of discretionary consumer spending,
interest rates and unemployment. In addition, the Company's future sales and
operating results could fluctuate significantly from period to period due to
factors such as competition, the number of dealers, the mix of RVs sold, the
ability to utilize manufacturing resources efficiently, the timing of trade
shows and rallies, the introduction and consumer acceptance of new models and
designs by the Company and its competitors, the availability of alternative
housing, population growth and population aging. Due to the relatively high
selling prices of the Company's products, small variations in the number of RVs
and modular houses sold in any quarter can have a significant effect on sales
and operating results for that quarter. Accordingly, the results for any prior
period may not be indicative of results for any future period.

Seasonal factors, over which the Company has no control, also have an
effect on the demand for the Company's products. Demand in the RV and modular
housing industries generally declines during the winter season, while sales and
profits are generally highest during the spring and summer months. In addition,
unusually severe weather conditions in certain markets could delay the timing of
shipments from one quarter to another. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

POTENTIAL LIABILITIES UNDER REPURCHASE AGREEMENTS

The Company, as is common in the RV industry, enters into repurchase
agreements with the lending institutions which finance dealer purchases of the
Company's RV products. These agreements obligate the Company, under certain
circumstances, to repurchase its products in the dealer's inventory in the event
of a default by the dealer to its lender. If the Company were obligated to
repurchase a substantial number of vehicles in the future, it could result in
losses and could reduce new vehicle sales. See Note 10 of Notes to Consolidated
Financial Statements for the years ended December 31, 1993, 1994 and 1995.

AVAILABILITY AND PRICE OF GASOLINE

Many RVs produced by the Company require gasoline for their operation.
Gasoline has, at various times in the past, been difficult to obtain, and there
can be no assurance that the supply of gasoline will continue uninterrupted,
that rationing will not be imposed or that the price of, or tax on, gasoline
will not significantly increase in the future. Shortages of gasoline and
significant increases in gasoline prices have had a substantial adverse effect
on the demand for RVs in the past and could have a material adverse effect on
demand in the future.

7
<PAGE> 8

COMPETITION

The markets for RVs and modular housing are highly competitive, and the
Company has numerous competitors and potential competitors in these industries.
Some of these competitors have greater financial and other resources than the
Company. Initial capital requirements for entry into the manufacture of RVs and
modular housing are relatively small. There can be no assurance that either
existing or new competitors will not develop products that are superior to the
Company's or that achieve better consumer acceptance, or that the Company will
continue to remain competitive. See "Business -- Competition."

POTENTIAL CHANGES IN CONSUMER PREFERENCES; NEW PRODUCT INTRODUCTIONS

There can be no assurance that historical consumer preferences for RVs in
general and for the Company's products in particular will remain unchanged. The
Company believes that, with respect to its RV operations, the introduction of
new features and new models will be critical to its future success. Delays in
the introduction of new models or product features or a lack of market
acceptance of new models or features could have a material adverse effect on the
Company's business. There also can be no assurance that product introductions in
the future will not disrupt revenues from existing models and adversely affect
operating results.

DEPENDENCE ON CERTAIN SUPPLIERS

The chassis for the Company's RVs are purchased from a limited number of
manufacturers. Chassis availability, from time to time, has constrained the
Company's production and no assurances can be given this will not occur in the
future. Limited chassis availability in the future could have a material adverse
effect on the Company's sales and operating results. See "Business --
Recreational Vehicles -- Production and Distribution."

ENVIRONMENTAL REGULATION

The Company's RV and modular housing operations are subject to a variety of
federal and state environmental regulations relating to the use, generation,
storage, treatment, emission, and disposal of hazardous materials and wastes and
noise pollution. Such laws and regulations are becoming more stringent, and it
is likely that future amendments to these environmental statutes and additional
regulations promulgated thereunder will be applicable to the Company, its
manufacturing operations and its products in the future. The failure of the
Company to comply with present or future regulations could result in fines being
imposed on the Company, potential civil and criminal liability, suspension of
production or operations, alterations to the manufacturing process or costly
cleanup or capital expenditures.

REGULATORY MATTERS

The Company, its products and its manufacturing operations are subject to a
variety of federal, state and local regulations, including the National Traffic
and Motor Vehicle Safety Act, and numerous state consumer protection laws and
regulations relating to the operation of motor vehicles, including so-called
"Lemon Laws." Amendments to these regulations and the implementation of new
regulations could significantly increase the costs of manufacturing, purchasing,
operating or selling the Company's products and could have a material adverse
effect on the Company's sales and operating results. The failure of the Company
to comply with present or future regulations could result in fines being imposed
on the Company, potential civil and criminal liability, suspension of sales or
production or cessation of operations.

Certain U.S. tax laws currently afford favorable tax treatment for the
purchase and sale of RVs which are financed through mortgage borrowings. These
laws and regulations have historically been amended frequently, and it is likely
that further amendments and additional regulations will be applicable to the
Company and its products in the future. Amendments to these laws and regulations
and the implementation of new regulations could have a material adverse effect
on the Company.

The Company is subject to regulations which may require the Company to
recall products with design or safety defects. Product defects may also result
in a large number of product liability or warranty claims. The Company's
operating results could be materially and adversely affected by a major product
recall or if warranty or product liability claims in any period exceed accrued
liabilities for future warranty claims.

8
<PAGE> 9

The Company's modular housing operations are subject to a variety of
federal, state and local laws and building and zoning codes. Amendments to these
laws and codes and the implementation of new regulations could significantly
increase the costs of manufacturing, purchasing, operating or selling the
Company's modular homes and could have a material adverse effect on the
Company's sales of these products. The failure of the Company to comply with
present or future regulations could result in fines being imposed on the
Company, potential civil and criminal liability, suspension of production or
cessation of operations.

The manufactured housing industry is an indirect competitor of the
Company's modular housing business. At present, the manufactured housing
industry is subject to U.S. Department of Housing and Urban Development ("HUD")
building regulations which require that manufactured homes be constructed on
steel frames, whereas the Company's modular homes are constructed with
conventional wood floor systems. Lobbyists for the manufactured housing industry
are actively trying to amend the HUD regulations to permit the use of
conventional wood floor systems in manufactured homes. To the extent that this
lobbying effort is successful, the Company will be subject to increased
competition from, and may lose market share to, the manufactured housing
industry.

LEGAL MATTERS

The Company has from time to time been subject to product liability claims,
although no material litigation is currently pending against the Company. To
date, the Company has been successful in obtaining product liability insurance
on terms the Company considers acceptable. The Company's current policies
jointly provide coverage against claims based on occurrences within the policy
periods up to a maximum of $27 million for each occurrence and $27 million in
the aggregate. In addition, the Company self-insures for the first $250,000 to
$500,000 per product liability claim and for worker's compensation. There can be
no assurance that the Company will be able to obtain insurance coverage in the
future at acceptable levels or that the costs of insurance will be reasonable.
Furthermore, successful assertion against the Company of one or a series of
large uninsured claims, or of one or a series of claims exceeding the applicable
insurance coverage, could have a material adverse effect on the Company's
operating results and financial condition.

POSSIBLE VOLATILITY OF STOCK PRICE

The market price of the Company's Common Stock has been and may continue to
be subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, changes in earnings estimates by analysts, announcements of
new products by the Company or its competitors, general conditions in the RV and
modular housing markets, general economic and political conditions, general
stock market conditions and other events or factors. In addition, the stocks of
many publicly held RV and modular housing companies have in the past experienced
price and volume fluctuations which have not necessarily been directly related
to such companies' operating performance, and the market price of the Company's
Common Stock has experienced and may in the future experience similar
fluctuations.

ANTI-TAKEOVER PROVISIONS

The Company's shareholder rights plan provides for a bundling of common
share purchase rights with all issuances of Common Stock. These common share
purchase rights could delay or prevent a change in control of the Company or
could impede a merger, consolidation, takeover or other business combination
involving the Company or discourage a potential acquiror from making a tender
offer or otherwise attempting to obtain control of the Company. See "Description
of Common Stock -- Shareholder Rights Plan."

The Company's bylaws contain a 60-day notice provision for director
nominations. This provision allows nominations for the election of directors to
be made by the Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations must be made by notice in writing not
less than 60 days prior to any meeting of the stockholders called for the
election of directors. This notice provision could delay or prevent a change in
control of the Company or could impede a merger, consolidation, takeover or
other business combination involving the Company or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control of
the Company.

9
<PAGE> 10

USE OF PROCEEDS

The Company estimates that the net proceeds from the sale of the Common
Stock offered hereby (after deducting the underwriting discount and the
estimated offering expenses) will be $41,652,000. The Company intends to use
such proceeds, together with cash on hand, for general corporate purposes,
including working capital requirements and expenditures for plant and equipment.
Such proceeds may also be used for the acquisition of compatible businesses. To
date, the Company has no understandings, arrangements or agreements with respect
to any acquisitions.

DIVIDEND POLICY

The Company has paid a quarterly cash dividend since the fourth quarter of
1982. The most recent quarterly cash dividend was $0.05 per share and was
declared on July 17, 1996. It is presently the intent of the Company to retain a
substantial portion of its earnings for general corporate purposes, including
business expansion, and for possible acquisitions. The declaration and payment
of future dividends will be at the sole discretion of the Board of Directors and
will depend on the Company's profitability, financial condition, capital needs,
future prospects and other factors deemed relevant by the Board of Directors.

CAPITALIZATION

The table below sets forth cash and temporary cash investments, current
maturities of long-term debt and total capitalization of the Company at
September 30, 1996, and as adjusted to give effect to the sale of the 1,800,000
shares of Common Stock offered hereby, and the application of the estimated
proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and temporary cash investments.................................... $ 26,853 $ 68,505
======== ========
Current maturities of long-term debt................................... $ 2,109 $ 2,109*
======== ========
Long-term debt......................................................... $ 10,260 $ 10,260*
Total shareholders' equity............................................. 113,321 154,973
-------- --------
Total capitalization.............................................. $123,581 $ 165,233
======== ========
</TABLE>

- -------------------------
* This table does not reflect the issuance by a subsidiary of the Company on
November 13, 1996 of a $5,000,000 promissory note obligation in connection
with an industrial revenue bond.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is listed on the NYSE (stock symbol -- COA). The
following table sets forth for the quarters indicated the high and low composite
per share sales prices as reported by the NYSE.

<TABLE>
<CAPTION>
HIGH LOW
--------------- ---------------
<S> <C> <C> <C> <C>
1994:
First quarter........................................................... $ 9 3/16 $ 7 1/4
Second quarter.......................................................... 8 15/16 6 1/4
Third quarter........................................................... 7 5/8 5 7/8
Fourth quarter.......................................................... 7 13/16 5 7/8
1995:
First quarter........................................................... $ 9 3/16 $ 7 7/16
Second quarter.......................................................... 9 1/4 6 11/16
Third quarter........................................................... 8 13/16 7 1/16
Fourth quarter.......................................................... 11 13/16 8 1/16
1996:
First quarter........................................................... $13 7/8 $ 9 7/16
Second quarter.......................................................... 19 9/16 12 7/8
Third quarter........................................................... 26 3/4 15 3/8
Fourth quarter(1)....................................................... 29 24 1/4
</TABLE>

- -------------------------
(1) Through November 13, 1996

10
<PAGE> 11

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The selected consolidated financial data set forth below for the years
ended December 31, 1991, 1992, 1993, 1994 and 1995, have been derived from the
Company's consolidated financial statements for such years which have been
audited by Coopers & Lybrand L.L.P., independent accountants. The selected
consolidated financial data for the nine months ended September 30, 1995 and
1996, have been derived from the Company's unaudited consolidated financial
statements and contain all adjustments necessary for a fair presentation of such
financial information. The data set forth below should be read in conjunction
with the Consolidated Financial Statements and Condensed Consolidated Financial
Statements and the notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
CONSOLIDATED INCOME STATEMENT ---------------------------------------------------- -------------------------
DATA: 1991 1992 1993 1994(1) 1995(2) 1995(2) 1996
-------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales..................... $231,368 $292,790 $329,511 $394,024 $515,862 $390,936 $469,599
Cost of goods sold............ 205,192 250,609 281,822 335,567 444,627 337,752 401,329
-------- -------- -------- -------- -------- -------- --------
Gross profit.............. 26,176 42,181 47,689 58,457 71,235 53,184 68,270
-------- -------- -------- -------- -------- -------- --------
Operating expenses:
Selling and delivery........ 19,180 19,041 19,232 20,080 25,593 19,586 20,545
General and
administrative............ 19,843 15,302 15,789 15,877 18,983 14,429 16,152
-------- -------- -------- -------- -------- -------- --------
39,023 34,343 35,021 35,957 44,576 34,015 36,697
-------- -------- -------- -------- -------- -------- --------
Operating income (loss)... (12,847) 7,838 12,668 22,500 26,659 19,169 31,573
-------- -------- -------- -------- -------- -------- --------
Nonoperating income (expense):
Interest expense............ (3,573) (2,917) (2,028) (1,481) (3,142) (2,306) (1,239)
Interest income............. 495 435 474 667 1,306 891 979
Gain on sale of properties,
net....................... 2,362 402 225 889 793 786 728
Other, net.................. 282 2,504 1,357 237 2,341 714 958
-------- -------- -------- -------- -------- -------- --------
(434) 424 28 312 1,298 85 1,426
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes and
cumulative effect of
accounting change....... (13,281) 8,262 12,696 22,812 27,957 19,254 32,999
Income taxes.................. 153 125 -- 8,028 10,408 7,155 12,024
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
cumulative effect of
accounting change....... (13,434) 8,137 12,696 14,784 17,549 12,099 20,975
Cumulative effect of
accounting change........... -- -- -- -- -- -- 2,294
-------- -------- -------- -------- -------- -------- --------
Net income (loss)......... $(13,434) $ 8,137 $ 12,696 $ 14,784 $ 17,549 $ 12,099 $ 23,269
======== ======== ======== ======== ======== ======== ========
Weighted average number of
shares of Common Stock
outstanding(3).............. 14,327 14,362 14,608 14,744 14,882 14,871 15,029
======== ======== ======== ======== ======== ======== ========
Net income (loss) per share of
Common Stock(3)............. $ (.94) $ .57 $ .87 $ 1.00 $ 1.18 $ .81 $ 1.55
======== ======== ======== ======== ======== ======== ========
Cash dividends per share of
Common Stock(3)............. $ .04 $ .04 $ .095 $ .12 $ .14 $ .105 $ .135
======== ======== ======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30, 1996
CONSOLIDATED BALANCE SHEET ---------------------------------------------------- -------------------------
DATA: 1991 1992 1993 1994 1995 ACTUAL AS ADJUSTED(4)
-------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Working capital............... $ 16,113 $ 26,071 $ 38,250 $ 51,334 $ 60,558 $ 70,509 $112,161
Total assets.................. 86,489 88,836 94,736 125,021 150,249 187,919 229,571
Long-term debt................ 6,807 5,336 3,750 7,023 12,118 10,260 10,260(5)
Total shareholders' equity.... 40,459 48,589 61,006 74,756 91,037 113,321 154,973
</TABLE>

(2) Georgie Boy Mfg., Inc. was acquired on January 3, 1995. See Note 9 of Notes
to Consolidated Financial Statements.

(3) All share and per share data have been retroactively adjusted to give effect
to a two-for-one stock split effective August 28, 1996.

(4) Adjusted to give effect to this offering and the application of the net
proceeds therefrom. See "Use of Proceeds."

(5) This table does not reflect the issuance by a subsidiary of the Company on
November 13, 1996 of a $5,000,000 promissory note obligation in connection
with an industrial revenue bond.
11
<PAGE> 12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Selected
Consolidated Financial Data, the Consolidated Financial Statements for the Years
Ended December 31, 1993, 1994 and 1995 and the Condensed Consolidated Financial
Statements for the Nine Months Ended September 30, 1995 and 1996, appearing
elsewhere herein.

OVERVIEW

The Company was founded in 1964 as a manufacturer of RVs and began
manufacturing modular homes in 1982. Since that time, the Company has evolved
into a market leader in both business segments through a combination of internal
growth and strategic acquisitions. As part of its continuing effort to focus on
its two core businesses, the Company acquired in January 1995 the third largest
Class A motorhome producer, Georgie Boy Mfg., Inc. (the "Georgie Boy
Acquisition"), which more than doubled the Company's market share in this sector
of the motorized RV market. In September 1994, the Company acquired the assets
of a modular home business, the North Carolina division of Muncy Building
Enterprises, L.P. (the "North Carolina Acquisition"), which enabled the Company
to enter a new geographic market, resulting in an increase in overall market
share.

The Company's new plant openings have been an important component of its
internal growth strategy. In May 1995, the Company opened a new modular housing
plant in Tennessee (the "Tennessee Plant Opening"). In February 1996, the
Company further increased its market share by opening a new fifth wheel and
conventional travel trailer plant in Oregon (the "Oregon Plant Opening"). The
Company plans to open an additional travel trailer plant in Indiana in December
1996 to capitalize on the growing market share of the value-priced travel
trailer segment of its RV business.

The Company's business segments are cyclical and subject to certain
seasonal demand cycles and changes in general economic and political conditions.
See "Investment Considerations." Demand in the RV and modular housing industries
generally declines during the winter season, while sales and profits are
generally highest during the spring and summer months. Inflation and changing
prices have had minimal direct impact on the Company in the past in that selling
prices and material costs have generally followed the rate of inflation.

RESULTS OF OPERATIONS

Comparison of the Nine Months Ended September 30, 1996 to the Nine Months Ended
September 30, 1995.

Consolidated net sales increased $78.7 million, or 20.1% to $469.6 million
during the first nine months of 1996 from $390.9 million during the first nine
months of 1995. The Company's vehicle segment, which includes the parts and
supply group of companies, experienced a net sales increase of 19.8% while the
housing segment had a net sales increase of 22.0%. Both vehicles and housing
experienced increases in unit sales and in the average sales price per unit
during the 1996 period.

Gross profit for the first nine months of 1996 increased to $68.3 million,
or 14.5% of net sales, from $53.2 million and 13.6% of net sales in the first
nine months of 1995. The increase in gross profit was primarily due to the net
sales increase in the first nine months of 1996 from the corresponding period in
1995. The increase in the gross profit percentage represents the spreading of
fixed costs over higher production volume. The housing segment continued
experiencing lower gross margins associated with the North Carolina Acquisition
and the Tennessee Plant Opening.

As a percentage of net sales, operating expenses, which include selling,
delivery, general and administrative expenses, were 7.8% and 8.7% for the first
nine months of 1996 and 1995. Selling expenses for the 1996 period represented a
decrease of 0.6%, primarily resulting from increased demand for the Company's
products. As a percentage of net sales, delivery expenses remained relatively
unchanged. General and administrative expenses were 3.4% of net sales for the
nine months compared to 3.7% in 1995 due to an increase in net sales. General
and administrative expenses increased during the 1996 period due to increased
incentive compensation earned as a result of increased profits.

12
<PAGE> 13

Interest expense for the first nine months of 1996 decreased to $1.2
million, or 0.3% of net sales, from $2.3 million, or 0.6% of net sales, for the
first nine months of 1995, primarily as a result of a change to the cash
surrender value method of accounting for the Company's investment in life
insurance contracts. These life insurance contracts were purchased to fund
obligations under deferred compensation agreements with executives and other key
employees. The interest costs associated with deferred compensation obligations
and with the borrowings against the cash value of the insurance policies are now
partially offset by the increases in cash surrender values each accounting
period. Previously, the increases in cash surrender values were not recognized,
since the investment in life insurance contracts consisted only of the
capitalized insurance premiums.

Interest income for the first nine months of 1996 increased to $1.0 million
from $0.9 million for the comparable period in 1995, primarily due to the
amounts of cash and temporary cash investments in 1996 versus 1995. Increases in
cash and temporary cash investments were primarily generated from operating
activities.

Net gain on the sale of properties decreased to $728,000 for the first nine
months of 1996 from $786,000 for the first nine months of 1995. This variance is
the result of the amount of gain recognized upon the disposition of various
small properties. Assets are continually analyzed and every effort is made to
sell or dispose of properties that are determined to be unproductive.

Other income, net, represents income of $1.0 million for the 1996 nine
months compared to income of $0.7 million for the 1995 nine months. The most
significant variance was due to a final determination of insurance proceeds from
assets destroyed in a fire which consumed the Company's Prodesign production
facility in August 1995.

Income taxes for the first nine months of 1996 increased to $12.0 million,
or 2.6% of net sales, from $7.2 million, or 1.8% of net sales, for the first
nine months of 1995. The 1996 effective tax rate was 36.4% compared to 37.2% in
1995. The decrease in the effective tax rate for 1996 is attributable to an
increase in nontaxable income in 1996.

Net income for the nine months ended September 30, 1996 was $23.3 million
compared to $12.1 million for the nine months ended September 30, 1995, which
includes the $2.3 million cumulative effect of an accounting change. See Note C
of Notes to Condensed Consolidated Financial Statements for the nine months
ended September 30, 1995 and 1996.

Comparison of the Year Ended December 31, 1995 to the Year Ended December 31,
1994

Consolidated net sales for 1995 were $515.9 million, an increase of 30.9%
over $394.0 million reported in 1994. The Company's RV segment, which includes
the parts and supply businesses, experienced a sales increase of 32.1%, while
the housing segment of the Company's business increased by 25.0%. Recreational
vehicle segment sales were augmented by the sales resulting from the Georgie Boy
Acquisition. In addition, 1994 included the net sales of Southern Ambulance
Builders, Inc., which was sold on April 29, 1994. After eliminating the net
sales of Georgie Boy from 1995 and Southern Ambulance from 1994, the Company's
RV segment experienced a net sales increase of 8.2%. New product introductions
and aggressive pricing resulted in significant market share gains in most RV
product categories, while the industry as a whole experienced a reported sales
decline. The Company's increased capacity in the housing segment, resulting from
the North Carolina Acquisition and the Tennessee Plant Opening, enabled
continued growth and contributed to a substantial gain of market share. The
Company's RV and modular housing segments experienced increases in both the
number of units sold and the average sales price per unit. Historically, the
Company's first and fourth quarters are the slowest for sales in both the RV and
modular housing segments. Strong sales volume throughout 1995 allowed for more
efficient production through the normally slower winter months. See Note 12 of
Notes to Consolidated Financial Statements for unaudited interim financial
information.

Gross profit as a percentage of net sales for 1995 was 13.8% compared to
14.8% reported for 1994. This decrease reflects an industry wide sales decline
in van conversions and intensified competition in camping trailers, as well as
lower profitability levels attributable to the North Carolina Acquisition and
Tennessee Plant

13
<PAGE> 14

Opening. The Company expects that as these plants reach full capacity,
inefficiencies associated with the plant acquisition and opening should be
reduced and eventually eliminated. The industry decline in sales of van
conversions and increased competition in camping trailers has led to strong
pricing competition and underutilized capacity. The increase in motorized
product sales resulting from the Georgie Boy Acquisition contributed to a higher
cost of goods sold since motorized products generally have a higher cost of
goods manufactured as a percentage of net sales due to the chassis cost.

Operating expenses, consisting of selling and delivery and general and
administrative expenses, were $44.6 million or 8.6% of net sales in 1995
compared with $36.0 million or 9.1% of net sales in 1994. Selling and delivery
expenses were $25.6 million, or 5.0% of net sales, in 1995 compared with $20.1
million, or 5.1% in 1994. Delivery expenses tend to fluctuate with sales mix, as
well as changes in geographical areas to which products are delivered. The
overall decrease in selling and delivery expenses as a percentage of net sales
was primarily the result of increased demand for the Company's products. General
and administrative expenses were $19.0 million or 3.7% of net sales in 1995
compared with $15.9 million or 4.0% of net sales in 1994. The 0.3% reduction in
general and administrative expenses as a percentage of net sales was caused by
the spreading of the Company's relatively fixed expenses in this category over
increased net sales. The increase in general and administrative expenses in
absolute dollars was due to increases in the administrative salaries and payroll
taxes associated with the Georgie Boy Acquisition, the North Carolina
Acquisition and the Tennessee Plant Opening.

Operating income was $26.7 million in 1995 compared with $22.5 million in
1994, an increase of 18.5%. This increase was consistent with a $12.8 million
increase in gross profit and an overall decrease of 0.5% in operating expenses
as a percentage of net sales. The Company's RV segment produced operating income
of $18.1 million, or 4.2% of RV net sales, compared with operating income of
$15.4 million, or 4.7% of RV net sales in 1994, while the modular housing
segment generated 1995 operating income of $8.6 million, or 10.4% of modular
housing net sales, compared with 1994 operating income of $8.2 million, or 12.3%
of modular housing net sales. See Note 2 of Notes to Consolidated Financial
Statements. The decrease in operating income as a percentage of net sales for
the Company's housing segment was attributable to the North Carolina Acquisition
and Tennessee Plant Opening.

Interest expense increased in 1995 to $3.1 million from $1.5 million in
1994 as a result of increases in long-term debt associated with the Georgie Boy
Acquisition, the North Carolina Acquisition and the economic development bond
used to finance the Tennessee Plant Opening, as well as a general increase in
interest rates from 1994 to 1995. There were no borrowings on the Company's
short-term line of credit during 1995 or 1994.

Interest income increased from $0.7 million in 1994 to $1.3 million in 1995
due to the Company's cash and temporary investment activity in 1995 compared
with 1994, and a general rise in interest rates from 1994 to 1995.

The net gain on the sale of properties decreased to $793,000 in 1995 from
$889,000 in 1994. The net gain in 1995 resulted from the disposition of
investment and rental properties located in Florida, Georgia and Indiana, while
the net gain in 1994 reflected the disposition of idle properties located in
Georgia and Indiana.

Other nonoperating income increased $2.1 million in 1995 from $0.2 million
in 1994 to $2.3 million in 1995. This increase consisted primarily of estimated
insurance proceeds in excess of the net book value of assets destroyed in a fire
which consumed the Company's Prodesign production facility in August 1995. See
Note 11 of Notes to Consolidated Financial Statements. The assets were generally
insured at replacement value and the recognized gain offset the loss in
profitability suffered while the division was recovering.

The 1995 provision for income taxes represents an effective tax rate of
37.2% compared to 35.2% in 1994. During the first quarter of 1994, the federal
tax provision was reduced by a deferred tax credit of approximately $0.5
million, resulting from the elimination of a remaining valuation allowance.

Net income for the year ended December 31, 1995 was $17.5 million compared
to $14.8 million for the prior period.

14
<PAGE> 15

LIQUIDITY AND CAPITAL RESOURCES

The Company generally relies on funds from operations as its primary source
of working capital and liquidity. In addition, the Company maintains an
unsecured committed line of credit, which totaled $30 million at September 30,
1996, to meet its seasonal working capital needs. There were no borrowings
against this line of credit during 1994, 1995 or the first nine months of 1996.
The Company's major source of cash was from operating activities during 1994,
1995 and the first nine months of 1996. The most significant items in this
category for all three periods, were net income, depreciation, and in 1994,
increases in accounts payable and other accrued expenses. These increases were
offset in 1994 by increases in receivables and inventories, and in 1995 by
increases in receivables and decreases in accounts payable. For the first nine
months of 1996, significant increases in receivables and inventories were
largely offset by increases in accounts payable and accrued expenses, including
income taxes. In 1994 the principal sources of cash flow from investing
activities were proceeds from the sale of investments, the sale of subsidiaries
and the collection of notes receivable, offset by $5.1 million of investment in
property and equipment and $1.4 million for the North Carolina Acquisition. In
1995, the principal sources from investing activities were from the sale of
properties and the use of unexpended industrial revenue bond proceeds. At the
same time, the Company invested $15.2 million in property and equipment,
primarily in connection with the expansion of its capacity in the housing
segment and $4.3 million for the Georgie Boy Acquisition. For the first nine
months of 1996, the principal use of cash in investing activities was $12.1
million for property and equipment, including construction in progress for a new
housing facility in North Carolina (financed in part by a $5,000,000 industrial
revenue bond issued in November 1996) and the Oregon Plant Opening. In 1994, the
Company experienced positive cash flow financing activities primarily from an
increase in long-term debt associated with the economic development bond used to
finance the Tennessee Plant Opening. The negative cash flow in 1995 and the
first nine months of 1996 for financing activities was primarily caused by the
payment of cash dividends and the repayment of long-term debt.

The Company's profitability has strengthened its financial position during
all three periods. In 1995 working capital increased $9.3 million, from $51.3
million to $60.6 million. At September 30, 1996, working capital increased $9.9
million from December 31, 1995 to $70.5 million. The $12.6 million increase in
current assets at December 31, 1995 versus 1994, was due to increased
receivables and inventories primarily associated with the Georgie Boy
Acquisition. The $3.3 million increase in current liabilities is substantially
the result of increases in other liabilities, primarily insurance and warranty
accruals. The $26.8 million increase in current assets at September 30, 1996
versus December 31, 1995, was primarily due to increased receivables, cash and
inventories. The $16.8 million increase in liabilities is substantially due to
increased trade payables, as well as insurance accruals.

The Company anticipates that available funds, together with anticipated
cash flows generated from future operations, amounts available under its bank
line of credit, the $5,000,000 bond financing in November 1996, and the
application of the proceeds of this offering will be sufficient to fund its
planned capital expenditures and other operating cash requirements through the
end of 1997.

15
<PAGE> 16

BUSINESS

OVERVIEW

Coachmen is one of the largest full-line producers of RVs and is the
largest builder of modular homes in the country. The Company's RVs are marketed
under various brand names including Coachmen, Shasta and Viking through
approximately 1,200 independent dealers located in 49 states and internationally
and six Company-owned dealerships. In 1995, according to the RVIA, RV
manufacturers shipped approximately 247,000 units (excluding van conversions)
having an aggregate retail value of approximately $6 billion. The Company's
market share as measured by wholesale unit shipments grew from 5.7% in 1992 to
7.5% in 1995. Modular homes are manufactured by the Company's All American Homes
operation which sells homes through approximately 300 builder/dealers.

The Company's factory-produced modular homes are designed to serve as
permanent living quarters and are constructed on a conventional wood floor
system, the same as those used for traditional site-built houses. Modular homes
are transported on special carriers to a permanent location where the home is
usually set by crane on a basement or crawl space foundation. The Company's
modular homes are produced on an assembly line basis in plants located in
Indiana, Iowa, North Carolina and Tennessee.

The table below sets forth the composition of the Company's net sales for
each of the last three years and the nine months ended September 30, 1995 and
1996 (dollar amounts in thousands):

<TABLE>
<CAPTION> NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
-------------------------------------------------- --------------------------------

1993 1994 1995 1995 1996
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Vehicles:
Motorhomes......... $159,057 48% $177,583 45% $279,917 54% $213,313 55% $255,990 55%
Travel Trailers.... 67,999 21 98,147 25 102,229 20 79,185 20 93,796 20
Camping Trailers... 9,757 3 10,764 3 12,728 2 10,495 2 15,559 3
Truck Campers...... 3,512 1 3,117 1 3,748 1 3,293 1 2,011 --
Parts and
Supplies........ 25,724 8 31,397 8 33,991 7 25,961 7 30,625 7
Ambulances......... 15,035 4 6,423 1 -- -- -- -- -- --
-------- --- -------- --- -------- --- -------- --- -------- ---
Total
Vehicles...... 281,084 85 327,431 83 432,613 84 332,247 85 397,981 85
Housing.............. 48,427 15 66,593 17 83,249 16 58,689 15 71,618 15
-------- --- -------- --- -------- --- -------- --- -------- ---
Total...... $329,511 100% $394,024 100% $515,862 100% $390,936 100% $469,599 100%
======== === ======== === ======== === ======== === ======== ===
</TABLE>

RECREATIONAL VEHICLES

INDUSTRY OVERVIEW

The term "recreational vehicle" encompasses a wide range of product types,
including folding camping trailers, truck campers, fifth wheel trailers,
conventional travel trailers and Class A, B and C motorhomes and van
conversions. Although the retail prices of these vehicles range from $3,000 for
the simplest folding

16
<PAGE> 17

camping trailers to over $750,000 for certain highly customized Class A
motorhomes, the 1995 industry average retail price for each product type is as
follows:

<TABLE>
<S> <C>
Folding Camping Trailers............................................ $ 4,752
Truck Campers....................................................... 9,994
Fifth Wheel Trailers................................................ 20,694
Conventional Travel Trailers........................................ 12,979
Class A Motorhomes.................................................. 82,951
Class B Motorhomes.................................................. 40,110
Class C Motorhomes.................................................. 41,800
Van Conversions..................................................... 27,792
</TABLE>

Source: RVIA 1995 Recreational Vehicle Profile

According to the Michigan Study, approximately 8.2 million households owned
RVs (including van conversions) in 1993, up from 7.7 million households in 1988
and 5.8 million households in 1980. Recreational vehicles are purchased by
adults in all age ranges, but the highest market penetration is with those in
the 50 to 65 age group. While the average RV owner is 48 years old, the typical
motorhome and travel trailer owners are 63 and 52 years old, respectively.
According to the Census Bureau of the U.S. Department of Commerce, the number of
Americans aged 55 to 64 years old is projected to grow 12.1% from 1993 through
the year 2000 compared to 7.1% for the overall population. Baby Boomers are
defined as those born between the years 1946 and 1964, thus the leading edge of
the Baby Boom generation began turning 50 years of age in 1996. As Baby Boomers
enter and travel through the important 50 to 65 age group, they represent the
potential for a secular uptrend in the RV industry.

Historically, wholesale RV shipments have fluctuated. According to the
RVIA, the number of units shipped (excluding conversion vehicles) has increased
steadily since 1991, reaching a 15-year peak of 259,200 in 1994. While 1995 unit
shipments dropped 4.7% to 247,000, which was the second largest number of
shipments in the last decade, the total retail value of 1995 shipments increased
by 3.6% from approximately $5.7 billion in 1994 to approximately $5.9 billion in
1995.

INDUSTRY PRODUCTS

Recreational vehicles provide simple to luxurious living quarters for
traveling, camping, outdoor sports and other leisure-time pursuits. An
increasing number of people are also using RVs for business travel and for
full-time RVing. RVs are broadly classified as "towable" (folding camping
trailers, conventional travel trailers, fifth wheel travel trailers and truck
campers) and "motorized" (full-size Class A motorhomes, Class B van campers,
Class C mini-motorhomes and van conversions).

Towables

Folding camping trailers are constructed with collapsible "tent" sidewalls
which fold for easy towing. When opened, camping trailers provide nearly all the
comforts of conventional travel trailers, with beds, dinettes and fully
functional kitchenettes.

Conventional travel trailers have solid sidewalls and solid interior walls.
Like folding camping trailers, these RVs are towed by a bumper or frame hitch
attached to the towing vehicle.

Fifth wheel trailers are transported by a pickup truck equipped with a
device known as a fifth-wheel hitch. They are distinguished by their raised
forward section which extends over the bed of the pickup truck to form a
spacious and functional bi-level floorplan.

Truck campers slide into the bed of a pickup truck. They can be unloaded
and parked at home or at the campsite, enabling owners to use the truck with or
without the camper. Truck campers are especially suited for hunting, fishing and
other off-the-beaten-path activities.

17
<PAGE> 18

Motorized

Class A motorhomes are built on specially designed motor vehicle chassis,
and the RV manufacturer constructs the driving compartment as well as the
"house" portion of the motorhome. Because of their expansive interior and
exterior storage space, Class A motorhomes can be used for full-time living and
provide the ultimate in RV travel. These models are bus-style motorhomes
equipped with a wide range of kitchen and bathroom appliances, stereo,
television and other amenities, including one or more bathrooms, separate
bedrooms, deluxe carpeting and fabrics, couches, dining tables, air
conditioners, closets and other luxurious options.

Class B motorhomes, also known as van campers, are automotive vans that are
transformed by the RV manufacturer to provide sleeping, kitchen and toilet
facilities. They offer maximum mobility and are believed to be growing in
popularity among experienced RV users as well as newcomers to the RV lifestyle.

Class C motorhomes are constructed on a chopped van chassis. Retaining the
cab section of the van, RV manufacturers add the body section with complete
living quarters including various amenities such as full bathrooms, separate
bedrooms, full kitchens with a choice of appliances and other options.

Van conversions are automotive vans converted by van upfitters to include
such features as entertainment centers, ultra-comfortable seating and luxurious
window treatment and lighting. Van conversions typically serve their owners as a
spacious, elegantly appointed second car.

COMPANY PRODUCTS

The RV group is comprised of six divisions: Coachmen Recreational Vehicle
Company, Georgie Boy Mfg., Inc., Shasta Industries, Travelmaster, Coachmen Vans,
and Viking Recreational Vehicles, Inc.

Coachmen Recreational Vehicle Company ("Coachmen RV") is the Company's
largest operating division, with manufacturing facilities in Indiana, Georgia
and Oregon. Coachmen RV manufactures and markets all types of RVs, including
fold-down camping trailers, truck campers, travel trailers, fifth wheel
trailers, Class C and Class A motorhomes. Models at multiple price points are
offered in each RV type to appeal to entry-level buyers through upscale repeat
owners. Well known Coachmen product names include Catalina, Santara, Leprechaun,
Maxxum and Destiny.

The keys to Coachmen RV's success are its innovative customer-oriented
product development efforts and its commitment to its dealer organization.
Coachmen RV was recognized as one of the best manufacturers in the 1995
Recreational Vehicle Dealer Association Dealer Satisfaction Index poll.

In recognition of the need to add capacity to meet future demand, Coachmen
RV recently purchased a 60,000 square foot facility in Grants Pass, Oregon to
supply its western dealers more quickly and at significantly reduced delivery
costs. Coachmen RV also plans to open an additional travel trailer plant in
Goshen, Indiana in December 1996.

Georgie Boy Mfg., Inc. ("Georgie Boy"), which was acquired in January 1995,
is the nation's third largest Class A motorhome manufacturer. Georgie Boy's
brand names include Cruise Air and Encounter in the upper mid-price range,
Cruise Master and Swinger in the mid-price range and Pursuit and Swinger Custom
in the low-priced category. The Pursuit and Swinger Custom, which accounted for
approximately 35% of Georgie Boy's 1995 unit sales, appeal to younger buyers and
to consumers who would otherwise consider purchasing a late model used
motorhome. In late 1995, Georgie Boy entered the Class C market with the
introduction of the Maverick brand mini-motorhome. The Maverick is built in an
existing facility which had been previously under-utilized, therefore, the
Company has only experienced nominal increases in overhead from the new product
line.

Shasta Industries ("Shasta"), produces Class C motorhomes, travel trailers
and fifth wheel trailers in the low to mid-price range. Shasta, one of the
oldest names in the RV industry (having just celebrated its 55th anniversary)
recently improved its manufacturing capabilities and updated its product mix. It
introduced numerous new models in 1995 including many with slide-out rooms that
increase living areas.

18
<PAGE> 19

Travelmaster Class C mini-motorhomes are manufactured by Shasta, but
marketed through a separate dealer organization. Positioned at the mid-priced
segment, Travelmaster mini-homes feature distinctive exterior graphic designs
and upscale interiors.

Coachmen Vans, a leading name in luxurious van conversions and value-packed
van campers, sells products through franchised automotive dealers. The
Challenger targets the mid-price range and offers many standard features and
luxurious comfort, while the more elegant Countess sells in the mid-high price
range. The Class B Van Camper and Saratoga motorhomes are built on Ford, GM and
Dodge 19-foot length chassis and provide sleeping accommodations, fully equipped
kitchens, bathroom facilities, wardrobe and storage space and are designed for
easy handling. These motorhomes are marketed toward Baby Boomers who wish to
combine camping with a second family vehicle. In 1995, Coachmen Vans entered the
growing pickup truck conversion market, offering exciting design options for
Ford, Chevy and Dodge trucks. Interior treatments include walnut wood trim and
accessories, upgraded fabrics and optional leather seating. Exteriors are
customized with flared fenders, running boards, multi-color accent graphics, and
vinyl and fiberglass tonneau bed covers.

Viking Recreational Vehicles, Inc. makes and markets folding camping
trailers which are popular with first time buyers. The vehicles are designed for
young families or other camping enthusiasts offering compact, light-weight tent
campers that are easily towed and set-up. Typical features in these products
include a stainless steel sink, built-in icebox, cooktop range, queen beds and
air conditioners.

Other brand names the Company has protected and used and anticipates using
in the future include Sportscoach, Normandy, Cross Country, Pathfinder and
Frolic.

PARTS AND SUPPLY GROUP

The Company's parts and supply group is composed of Viking Formed Products
and The Lux Company, Inc., which provide a variety of products to the
recreational vehicle and automotive industries, as well as other industries.

Viking Formed Products ("Viking") is a diversified manufacturer of
fiberglass and thermoplastic parts, including fiberglass van camper tops and
raised roofs for van conversions, and conducts ground effects production through
its Prodesign operations. These stylized molded parts add aesthetics and
aerodynamics to vans, light trucks and sport utility vehicles. Types of products
produced include plastic and fiberglass flaired fenders, running boards and
lower front and rear moldings. In addition, Viking supplies exterior fiberglass
caps and bumpers for recreational vehicles.

Viking's and Prodesign's broad proprietary product line covers over 200
different styles. These products are designed for a wide range of automotive
offerings, including most vans, sport utility vehicles and pickup trucks, as
well as medium duty trucks. Viking also supplies aftermarket restylers with
similar ground effects packages.

The Lux Company, Inc. ("Lux") manufactures seating products for the RV,
office and healthcare industries. Lux utilizes a sales network of national
independent representatives which, together with innovative new products, has
helped fuel its growth. The largest portion of Lux's sales are in the RV seating
category, including sofa beds, convertible pit groups, swivel chairs and
ergonomic pilot seats, complete with monogramming. Lux recently introduced the
INLINE series of office managerial, conference, guest and high-back executive
chairs. The Company believes these ergonomically designed chairs meet today's
office seating requirements, while keeping in mind fixed office budgets and
modern styling demands. Lux healthcare products encompass end-opening sofas and
task chairs for laboratory and emergency care workers.

PRODUCTION AND DISTRIBUTION

The Company currently produces RVs on an assembly line basis in Indiana,
Michigan, Georgia and Oregon. Components used in the manufacture of RVs are
primarily purchased from outside sources. However, in some cases (such as
cushions, fiberglass products and furniture) where it is profitable for the
Company to do so, or where the Company has experienced shortages of supplies,
the Company has undertaken to manufacture its own supplies. The Company depends
on the availability of chassis from a limited number of manufacturers.
Occasionally, chassis unavailability has limited the Company's production. See
Note 10 of

19
<PAGE> 20

Notes to Consolidated Financial Statements for information concerning the use of
converter pool agreements to purchase vehicle chassis.

The Company prides itself on being customer driven. Sales and service
representatives regularly visit dealers in their regions, and respond quickly to
questions and suggestions. Divisions host dealer advisory groups and conduct
informative dealer seminars and specialized training classes in areas such as
sales and service. Open forum meetings with owners are held at campouts,
providing ongoing focus group feedback for product improvements. Engineers and
product development team members are encouraged to travel and vacation in
Company RVs to gain a complete understanding and appreciation for the products.

The Company believes it has the ability to respond promptly to changes in
market conditions. Most of the manufacturing facilities can be changed over to
the assembly of other existing products in two to six weeks. In addition, these
facilities may be used for other types of light manufacturing or assembly
operations. This flexibility enables the Company to adjust its manufacturing
capabilities in response to changes in demand for its products.

Recreational vehicles are generally manufactured against orders received
from the Company's dealers. Sales are seasonal with the highest level of sales
occurring during the spring and summer months. Coachmen's RVs are distributed
through approximately 1,200 independent dealers located in 49 states and
internationally and six Company-owned dealers. Agreements with most of its
dealers are cancelable on short notice, provide for minimum inventory levels and
establish sales territories. No dealer accounts for more than 5% of the
Company's net sales.

Most dealers' purchases of RVs from the Company are financed through "floor
plan" arrangements. Under these arrangements, a bank or other financial
institution agrees to lend the dealer all or most of the purchase price of its
RV inventory, collateralized by a lien on such inventory. The Company generally
executes repurchase agreements at the request of the financing institution.
These agreements provide that, for up to twelve months after a unit is financed,
the Company will repurchase a unit which has been repossessed by the financing
institution for the amount then due to the financing institution, which is
usually less than 100% of the dealer's cost. Risk of loss resulting from these
agreements is spread over the Company's numerous dealers and is further reduced
by the resale value of the products repurchased. See Note 10 of Notes to
Consolidated Financial Statements. In addition, the Company guarantees certain
obligations of some dealers to a financial institution for purchases of the
Company's products. The Company's annual aggregate obligations under this
arrangement are limited to 2% of the average annual outstanding floor plan
obligations to the financial institution which currently approximate $35
million. Over the past three years, the Company has not reported any significant
losses from the repurchase agreements or the guarantee arrangement. The Company
does not finance retail consumer purchases of its products, nor does it
generally guarantee consumer financing.

MODULAR HOUSING

INDUSTRY OVERVIEW

Modular housing is a small but rapidly growing segment of the housing
industry. Modular homes are built to the same local building codes as site-built
homes by skilled craftsmen in a factory environment unaffected by weather
conditions. Nearly complete when they leave the plant, modular homes are
delivered to their final location, typically in two to five sections, and are
crane set onto a waiting basement or crawl space foundation. Often homes are
ready for the builder and customer within one or two days of arriving at the
site. Because modular homes are built to local codes, they are less subject to
the zoning restrictions often encountered by manufactured housing and are
virtually indistinguishable from site-built homes.

Builders who purchase modular homes are often former site builders who find
they can increase sales volume and have fewer management difficulties with
modular homes. The local builder usually works with the final customer to select
the style of home and either modify one of the manufacturer's standard floor
plans or design a custom home. Most modular home manufacturers use CAD systems
that allow them to customize floor plans and produce drawings for the production
line. Production takes place on an assembly line, with components moving from
workstation to workstation for framing, electrical, plumbing, drywall, roofing,
and cabinet setting, among other operations. An average two-module home can be
produced in just a few days.

20
<PAGE> 21

COMPANY PRODUCTS

The Company's housing group, which is the largest producer of modular homes
in the country, is composed of four All American Homes ("All American")
operations strategically located in Decatur, Indiana, Dyersville, Iowa, Forest
City, North Carolina and Springfield, Tennessee. Together these plants serve
approximately 300 builder/dealers in 18 states. In 1995, All American delivered
1,850 new homes to residential neighborhoods.

The Company offers homes that appeal to a wide range of buyers, including
first time buyers, those moving up to a larger home, and "empty nesters"
returning to a more modest design. All American offers over 100 floorplans and
variations of the Ranch, Cape Cod, and full two-story home designs ranging in
size from 900 to 2,900 square feet. Buyers enjoy the All American advantage,
which provides them with the opportunity to customize their home with variations
to floorplans, kitchens, floor coverings, windows and other features.

All American's homes are constructed inside large manufacturing facilities,
reducing weather-related problems and pilferage. Quality is enhanced because
building materials are always dry, and homes, which meet local and state
building codes, are constructed within an environmentally-controlled facility.

The Company regularly conducts builder meetings to review the latest in new
design options and component upgrades. These meetings provide an opportunity for
valuable builder input and suggestions from their customers at the planning
stage.

COMPETITION

The RV and housing industries are highly competitive, and the Company has
numerous competitors and potential competitors in each of its classes of
products, some of whom have greater financial and other resources. Initial
capital requirements for entry into the manufacture of recreational vehicles or
housing are comparatively small; however, codes, standards and safety
requirements introduced in recent years may deter potential competitors.

In the RV sector, the Company generally competes in the lower to mid-price
range markets. The Company believes it is a leader in the RV industry in its
focus on quality. A quality product and a strong commitment to competitive
pricing are emphasized by the Company in the markets it serves. The Company
estimates that its current share of the RV market is in excess of 7%.

EMPLOYEES

At September 30, 1996, Coachmen employed 3,829 persons, of whom 688 were
employed in office and administrative capacities. The Company provides group
life, dental, hospitalization, and major medical plans under which the employee
pays a portion of the cost. In addition, employees can participate in a stock
purchase plan and certain employees can participate in a stock option plan. The
Company considers its relations with employees to be good.

PROPERTIES

The Company owns 2,754,783 square feet of plant and office space, located
on 1,183 acres and leases 220,820 square feet of plant and office space, located
on 48 acres. Of these properties, 1,951,641 square feet are used for
manufacturing, 221,318 square feet are used for warehousing and distribution,
41,675 square feet are used for research and development, 92,138 square feet are
used for customer service, 142,450 square feet are offices, 92,078 square feet
are leased to others and 213,483 square feet are available for sale or lease.
The Company believes that its present facilities, consisting primarily of steel
clad, steel frame or wood frame construction, and the machinery and equipment
contained therein, are well maintained and in good condition.

LEGAL PROCEEDINGS

From time to time, the Company is involved in certain litigation arising
out of its operations in the normal course of business. The Company believes
that there are no claims or litigation pending, the outcome of which will have a
material adverse effect on the financial position of the Company.

21
<PAGE> 22

MANAGEMENT

The following table sets forth the executive officers and directors of the
Company, as of October 22, 1996:

<TABLE>
<CAPTION>
NAME POSITION
- ------------------------------------ ------------------------------------------------------
<S> <C>
Thomas H. Corson.................... Chairman of the Board and Chief Executive Officer
Claire C. Skinner................... Vice Chairman of the Board
Keith D. Corson..................... President, Chief Operating Officer and Director
Gary L. Groom....................... Executive Vice President, Finance, Secretary and
Director
Gene E. Stout....................... Executive Vice President, Corporate Development
James P. Skinner.................... Senior Vice President, Parts and Supply Group
John T. Trant....................... Senior Vice President, Housing Group
William M. Angelo................... Corporate Controller
Philip C. Barker.................... Director
R. James Harring.................... Director
William P. Johnson.................. Director
William G. Milliken................. Director
Philip G. Lux....................... Director
</TABLE>

THOMAS H. CORSON (age 69) has served as Chairman of the Company since it
was incorporated in 1964 and has been actively involved in the management and
direction of the Company since that date.

CLAIRE C. SKINNER (age 42) has served as Vice Chairman of the Company since
May, 1995, and served as Executive Vice President from 1990 to 1995. Since 1987
through the present, Ms. Skinner has been the President of Coachmen RV, the
Company's largest division. Prior to that, she held several management positions
in operations and marketing since 1983.

KEITH D. CORSON (age 61) has served as President and Chief Operating
Officer of the Company since November 1991. From June 1991 to November 1991 he
served in the position of Office of the President after rejoining the Company.
Mr. Corson was owner and President of Koszegi Products, a soft case
manufacturer, for the eight years prior to June 1991. He was a co-founder of the
Company in 1964, and served in several senior management positions from 1964
until 1982, including President of the Company from 1978 until 1982.

GARY L. GROOM (age 50) has served as Executive Vice President, Finance and
Secretary of the Company since May 1983 and served as Senior Vice President,
Finance and Secretary from 1980 to 1983. He was Corporate Controller from 1975
through 1980. From 1972 to 1975 he was Assistant Controller.

GENE E. STOUT (age 63) has served as Executive Vice President, Corporate
Development of the Company since May 1983. From April 1982 to May 1983 he was
Senior Vice President Corporate Planning and Industry Relations. Between 1971
and 1982 he held various management positions with the Company.

JOHN T. TRANT (age 57) has served as the Company's Senior Vice President,
Housing Group since January 1990. Mr. Trant joined the Company in 1987 and from
1988 until 1990 he was Vice President of Operations, RV and Housing Groups.

JAMES P. SKINNER (age 45) has served as the Company's Senior Vice
President, Parts and Supply Group since January 1995. From January 1990 through
December 1994 he was Senior Vice President of the Company. From 1983 until 1990,
he held various management positions with the Company.

WILLIAM M. ANGELO (age 53) has served as the Corporate Controller of the
Company since May 1980. From 1975 until 1980 he held various positions in the
Company's accounting area.

PHILIP C. BARKER (age 69) is an attorney with the firm Hartzog, Barker,
Hepler and Saunders. He has served on the Company's Board since 1969.

R. JAMES HARRING (age 72) is a retired Vice President of Planning of
Motorola, Inc. He has served on the Company's Board since 1978.

22
<PAGE> 23

WILLIAM P. JOHNSON (age 55) has been Chairman of the Board of Goshen Rubber
Company for more than the last five years. Mr. Johnson has served on the
Company's Board since 1978.

PHILIP G. LUX (age 67) is a retired President of the Company. Prior to
retiring in 1991, he was the Company's President and Chief Executive Officer
from 1985 through 1990 and served as Vice Chairman during the year 1991.

WILLIAM G. MILLIKEN (age 73) is a former Governor of the State of Michigan,
having held that post from 1970 until 1983. He has been a member of the
Company's Board since 1985.

Mr. Thomas Corson is the brother of Keith Corson and the father of Claire
Skinner, who is the wife of James Skinner.

DESCRIPTION OF COMMON STOCK

The authorized capital stock of the Company consists of 60,000,000 shares
of Common Stock, without par value. Holders of the Common Stock are entitled to
such dividends as may be declared by the Board of Directors out of assets
legally available therefor and are entitled to one vote for each share held at
all meetings of shareholders. In the event of any liquidation of the Company,
all assets available for distribution on the Common Stock are distributable
among the holders thereof in proportion to their respective holdings. The Common
Stock is not redeemable and does not have any preemptive, subscription or
conversion rights. The outstanding Common Stock is, and the shares of Common
Stock offered hereby shall be, when paid for and issued, fully paid and
nonassessable.

The transfer agent and registrar for the Common Stock is First Chicago
Trust Company of New York.

SHAREHOLDER RIGHTS PLAN

On January 19, 1990, the Board of Directors of the Company declared a
dividend distribution of one common share purchase right (the "Rights") on each
outstanding share of Common Stock. The distribution was made to shareholders of
record on February 16, 1990. The description and terms of the Rights are set
forth in a Rights Agreement, dated as of February 16, 1990 (the "Rights
Agreement"), between the Company and First Chicago Trust Company of New York, as
Rights Agent. Except as set forth below, each Right will entitle the registered
holder thereof to purchase from the Company the number of shares of Common Stock
having a market value of twice the $15 exercise price, subject to anti-dilutive
adjustments contained in the Rights Agreement. The Shareholder Rights Plan (the
"Plan") provides that, unless the Rights shall have been redeemed, one Right
will be granted for each additional share of Common Stock issued by the Company
after the date the Plan was adopted and prior to the earlier of the time the
Rights become exercisable or February 15, 2000, the termination date of the
Plan. Such Rights only become exercisable upon the occurrence of certain events
as set forth in the Rights Agreement. See Note 6 of Notes to Consolidated
Financial Statements. Each of the shares of Common Stock offered hereby will be
accompanied by a Right.

23
<PAGE> 24

UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement
(the "Underwriting Agreement") between the Company and Oppenheimer & Co., Inc.,
as the representative of the Underwriters (the "Representative"), each of the
Underwriters named below has severally agreed to purchase from the Company, and
the Company has agreed to sell to each of the Underwriters, the respective
number of shares of Common Stock set forth opposite its name below:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
-------------------------------------------------------------- ----------------
<S> <C>
Oppenheimer & Co., Inc........................................ 890,000
Donaldson, Lufkin & Jenrette Securities Corporation........... 80,000
Goldman, Sachs & Co........................................... 80,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated............ 80,000
Morgan Stanley & Co. Incorporated............................. 80,000
Prudential Securities Incorporated............................ 80,000
Smith Barney Inc.............................................. 80,000
Southeast Research Partners, Inc.............................. 80,000
William Blair & Company, L.L.C................................ 35,000
Brean Murray & Co., Inc....................................... 35,000
Crowell, Weedon & Co.......................................... 35,000
Janney Montgomery Scott Inc................................... 35,000
Ladenburg, Thalmann & Co. Inc................................. 35,000
Legg Mason Wood Walker, Incorporated.......................... 35,000
McDonald & Company Securities, Inc............................ 35,000
Nutmeg Securities, Ltd........................................ 35,000
Scott & Stringfellow, Inc..................................... 35,000
Tucker Anthony Incorporated................................... 35,000
----------------
Total.................................................... 1,800,000
=============
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to purchase and pay for all of the
above shares of Common Stock if any are purchased.

The Underwriters propose to offer the shares of Common Stock directly to
the public at the offering price set forth on the cover page of this Prospectus,
and at such price less a concession not in excess of $0.70 per share of Common
Stock to certain other dealers who are members of the National Association of
Securities Dealers, Inc. The Underwriters may allow, and such dealers may
reallow, concessions not in excess of $0.10 per share to certain other dealers.

The Underwriters have been granted a 30-day over-allotment option to
purchase from the Company up to an aggregate of 270,000 additional shares of
Common Stock at the public offering price less the underwriting discount. If the
Underwriters exercise such over-allotment option, then each of the Underwriters
has agreed, subject to certain conditions, to purchase approximately the same
percentage thereof as the number of shares of Common Stock to be purchased by it
as shown in the above table bears to the total number of shares of Common Stock
offered hereby. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of Common Stock offered hereby.

The Underwriters have advised the Company that they do not intend to
confirm sales to any accounts over which they exercise discretionary authority.

The Company has agreed to indemnify the Underwriters against certain
liabilities, losses and expenses, including liabilities under the Securities Act
or to contribute to payments that the Underwriters may be required to make in
respect thereof.

24
<PAGE> 25

The Company, its directors and certain of its officers have agreed that for
a period of 90 days after the date of this Prospectus they will not sell,
contract to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock, any securities convertible into or exchangeable for Common Stock
or any rights to purchase or acquire Common Stock without the prior written
consent of the Representative (other than (i) the issuance of stock options
pursuant to the Company's stock option plan and the issuance of Common Stock
upon the exercise of stock options previously granted by the Company and (ii)
80,000 shares of Common Stock which one such officer and director may transfer
by way of gifts). The Representative, in its discretion, may waive the foregoing
restrictions in whole or in part, with or without a public announcement of such
action.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by McDermott, Will & Emery, Chicago, Illinois. Certain
legal matters will be passed upon for the Underwriters by Gibson, Dunn &
Crutcher LLP, Los Angeles, California.

EXPERTS

The consolidated balance sheets of the Company and its subsidiaries as of
December 31, 1994 and 1995 and the consolidated statements of income and
retained earnings and cash flows for each of the three years in the period ended
December 31, 1995, included herein, and the financial statement schedule from
the Company's 1995 Annual Report on Form 10-K, incorporated by reference herein,
have been included and incorporated in reliance on the reports of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of such firm as
experts in accounting and auditing.

25
<PAGE> 26

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants...................................................... F-2
Consolidated Balance Sheets as of December 31, 1994 and 1995........................... F-3
Consolidated Statements of Income and Retained Earnings for the years ended
December 31, 1993, 1994 and 1995..................................................... F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1994 and 1995..................................................... F-5
Notes to Consolidated Financial Statements............................................. F-6
Condensed Consolidated Balance Sheet as of September 30, 1996 (unaudited).............. F-17
Condensed Consolidated Statements of Income for the three months and nine months ended
September 30, 1995 and 1996 (unaudited).............................................. F-18
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 1995 and 1996 (unaudited).............................................. F-19
Notes to Condensed Consolidated Financial Statements (unaudited)....................... F-20
</TABLE>

F-1
<PAGE> 27

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of
Coachmen Industries, Inc.:

We have audited the accompanying consolidated balance sheets of Coachmen
Industries, Inc. and subsidiaries as of December 31, 1994 and 1995, and the
related consolidated statements of income and retained earnings and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Coachmen
Industries, Inc. and subsidiaries as of December 31, 1994 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Elkhart, Indiana
January 26, 1996, except as to the information
presented in Note 13 for which the date is
July 17, 1996

F-2
<PAGE> 28

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 1994 AND 1995

ASSETS

<TABLE>
<CAPTION>
1994 1995
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments........................... $ 19,534,385 $ 17,020,744
Certificates of deposit....................................... 750,000 500,000
Trade receivables, less allowance for doubtful receivables
1994 -- $986,000 and 1995 -- $863,000...................... 15,410,757 19,780,160
Other receivables............................................. 2,121,910 4,244,387
Refundable income taxes....................................... -- 507,000
Inventories................................................... 48,152,342 55,434,497
Prepaid expenses and other.................................... 1,229,475 1,570,492
Deferred income taxes......................................... 1,954,000 2,665,000
------------ ------------
Total current assets.................................. 89,152,869 101,722,280
------------ ------------
PROPERTY AND EQUIPMENT, at cost
Land and improvements......................................... 4,646,331 5,537,033
Buildings and improvements.................................... 20,618,726 27,405,744
Machinery and equipment....................................... 8,316,127 10,524,486
Transportation equipment...................................... 6,978,543 11,307,747
Office furniture and fixtures................................. 3,795,421 4,269,837
------------ ------------
44,355,148 59,044,847
Less, Accumulated depreciation................................ 25,144,558 27,297,851
------------ ------------
19,210,590 31,746,996
------------ ------------
OTHER ASSETS
Real estate held for sale..................................... 3,458,883 3,458,539
Rental properties............................................. 1,796,193 925,538
Unexpended industrial revenue bond proceeds................... 3,337,122 --
Intangibles, less accumulated amortization 1994 -- $108,151
and 1995 -- $244,771....................................... 327,121 5,199,505
Deferred income taxes......................................... 1,493,000 875,000
Other......................................................... 6,245,504 6,320,899
------------ ------------
16,657,823 16,779,481
------------ ------------
TOTAL ASSETS.................................................... $125,021,282 $150,248,757
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt.......................... $ 1,530,553 $ 2,094,472
Accounts payable, trade....................................... 20,398,679 18,435,562
Accrued wages, salaries and commissions....................... 3,075,622 3,583,423
Accrued dealer incentives..................................... 2,071,042 2,289,376
Accrued warranty expense...................................... 2,710,068 3,784,712
Accrued income taxes.......................................... 1,728,200 981,800
Other accrued expenses........................................ 6,304,825 9,965,433
------------ ------------
Total current liabilities............................. 37,818,989 41,134,778
LONG-TERM DEBT.................................................. 7,023,394 12,117,756
OTHER........................................................... 5,422,953 5,958,995
------------ ------------
Total liabilities..................................... 50,265,336 59,211,529
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 10)
SHAREHOLDERS' EQUITY
Common shares, without par value: authorized 60,000,000
shares; issued 1994 -- 18,147,392 shares and
1995 -- 18,282,672 shares.................................. 36,600,387 37,151,202
Additional paid-in capital.................................... 1,431,055 1,664,889
Retained earnings............................................. 52,359,629 67,824,816
------------ ------------
90,391,071 106,640,907
Less, Cost of shares reacquired for the treasury
1994 -- 3,349,642 shares and 1995 -- 3,345,004 shares...... 15,635,125 15,603,679
------------ ------------
Total shareholders' equity............................ 74,755,946 91,037,228
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $125,021,282 $150,248,757
============ ============
</TABLE>

The accompanying notes are part of the consolidated financial statements.

F-3
<PAGE> 29

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

<TABLE>
<CAPTION>
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Net sales............................................ $329,511,226 $394,023,774 $515,862,065
Cost of goods sold................................... 281,822,135 335,566,707 444,626,666
------------ ------------ ------------
Gross profit............................... 47,689,091 58,457,067 71,235,399
------------ ------------ ------------
Operating expenses:
Selling and delivery............................... 19,231,613 20,080,353 25,593,164
General and administrative......................... 15,789,485 15,877,111 18,983,252
------------ ------------ ------------
35,021,098 35,957,464 44,576,416
------------ ------------ ------------
Operating income........................... 12,667,993 22,499,603 26,658,983
------------ ------------ ------------
Nonoperating income (expense):
Interest expense................................... (2,027,709) (1,480,784) (3,141,763)
Interest income.................................... 474,101 667,004 1,306,148
Gain on sale of properties, net.................... 224,452 888,902 793,412
Other, net......................................... 1,356,890 237,369 2,340,620
------------ ------------ ------------
27,734 312,491 1,298,417
------------ ------------ ------------
Income before income taxes................. 12,695,727 22,812,094 27,957,400
Income taxes......................................... -- 8,028,000 10,408,000
------------ ------------ ------------
Net income................................. 12,695,727 14,784,094 17,549,400
Retained earnings, beginning of the year............. 28,037,418 39,345,043 52,359,629
Cash dividends (per common share:
1993 -- $.095, 1994 -- $.12, and 1995 -- $.14)..... (1,388,102) (1,769,508) (2,084,213)
------------ ------------ ------------
Retained earnings, end of year....................... $ 39,345,043 $ 52,359,629 $ 67,824,816
------------ ------------ ------------
Net income per common share.......................... $ .87 $ 1.00 $ 1.18
------------ ------------ ------------
</TABLE>

The accompanying notes are part of the consolidated financial statements.

F-4
<PAGE> 30

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

<TABLE>
<CAPTION>
1993 1994 1995
------------ ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................... $ 12,695,727 $14,784,094 $ 17,549,400
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation........................................ 2,867,068 3,089,602 3,993,282
Amortization of intangibles......................... 10,881 10,881 136,620
Gain on sale of properties.......................... (224,452) (888,902) (793,412)
Gain on insurance settlement........................ -- -- (2,124,539)
Realized gain on sale of investments................ (70,896) (142,373) (13,888)
Unrealized appreciation of investments.............. (267,025) (58,325) --
Deferred income taxes............................... (2,450,000) (858,000) (93,000)
Other............................................... (703,062) (9,729) 121,131
Changes in certain assets and liabilities, net of
effects of acquisitions and dispositions:
Receivables, excluding current portion of
notes........................................ (277,581) (2,950,130) (2,792,849)
Inventories..................................... (4,656,603) (7,925,926) 1,361,916
Prepaid expenses and other...................... 244,623 (340,019) (304,327)
Accounts payable, trade......................... 3,000,228 8,764,214 (4,188,586)
Accrued income taxes............................ 459,003 1,197,379 (674,039)
Other current liabilities....................... 2,710,421 2,729,901 1,277,349
------------ ----------- ------------
Net cash provided by operating activities.... 13,338,332 17,402,667 13,455,058
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of properties..................................... 3,614,452 1,269,607 3,477,934
Sale of investments.................................... 427,258 1,629,661 263,888
Sale of subsidiaries................................... -- 3,364,848 --
Insurance settlement................................... -- -- 846,463
Acquisitions of:
Investments............................................ (500,000) -- --
Property and equipment................................. (4,676,321) (5,133,151) (15,222,794)
Real estate held for sale and rental properties........ (93,561) -- --
Acquisition of businesses, net of acquired cash.......... -- (1,387,740) (4,313,046)
Collections on notes receivable, net..................... 641,295 1,537,170 39,177
Unexpended industrial revenue bond proceeds.............. -- (3,337,122) 3,337,122
Proceeds from life insurance death benefit............... 981,987 -- --
Other.................................................... 305,738 73,313 (130,153)
------------ ----------- ------------
Net cash provided by (used in) investing
activities...................................... 700,848 (1,983,414) (11,701,409)
------------ ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings...................... 9,916,729 -- --
Payment of short-term borrowings......................... (20,816,200) -- (900,000)
Proceeds from long-term debt............................. -- 4,000,000 --
Payments of long-term debt............................... (1,727,329) (793,568) (1,833,892)
Cash dividends paid...................................... (1,388,102) (1,769,508) (2,084,213)
Proceeds from issuance of common shares.................. 654,661 477,297 550,815
------------ ----------- ------------
Net cash provided by (used in) financing
activities...................................... (13,360,241) 1,914,221 (4,267,290)
------------ ----------- ------------
Increase (decrease) in cash and temporary cash
investments.............................................. 678,939 17,333,474 (2,513,641)
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of year........................................ 1,521,972 2,200,911 19,534,385
------------ ----------- ------------
End of year.............................................. $ 2,200,911 $19,534,385 $ 17,020,744
------------ ----------- ------------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................ $ 2,203,000 $ 1,463,000 $ 2,398,105
Income taxes........................................ 2,447,000 7,454,000 12,265,000
</TABLE>

The accompanying notes are a part of the consolidated financial statements.

F-5
<PAGE> 31

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 1: NATURE OF OPERATIONS AND ACCOUNTING POLICIES.

Nature of Operations -- Coachmen Industries, Inc. and its subsidiaries (the
"Company") manufacture a full line of recreational vehicles and van conversions
through eight divisions with manufacturing facilities located in Indiana,
Georgia, Michigan and Oregon. These products are marketed through a nationwide
dealer network. The Company's housing divisions, with locations in Indiana,
Iowa, North Carolina and Tennessee, supply modular housing to builder/dealers in
eighteen adjoining states. The Company's parts and supply divisions concentrate
primarily on providing parts and supplies to the recreational vehicle and van
conversion industries, and also have an important interest in the office
furniture market.

Principles of Consolidation -- The accompanying consolidated financial
statements include the accounts of Coachmen Industries, Inc. and its
subsidiaries.

Use of Estimates in the Preparation of Financial Statements -- The
preparation of financial statements in conformity with generally accepted
accounting principles 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 reporting period.
Actual results could differ from those estimates.

Revenue Recognition, Concentrations of Credit Risk and Allowances for
Credit Losses -- Sales are recognized as revenue upon shipment. The Company has
a concentration of credit risk in the recreational vehicle industry, although
there is no geographic concentration of credit risk. The Company performs
ongoing credit evaluations of its customers' financial condition and sales to
its recreational vehicle dealers are generally subject to preapproved dealer
floor plan financing whereby the Company is paid upon delivery or shortly
thereafter. The Company generally requires no collateral from its customers.
Future credit losses are provided for currently through the allowance for
doubtful receivables and actual credit losses are charged to the allowance when
incurred.

Cash and temporary cash investments at December 31, 1994 and 1995 include
approximately $18,500,000 and $16,500,000, respectively, which is invested in a
money market mutual fund.

Cash Flows and Noncash Activities -- For purposes of the consolidated
statements of cash flows, cash and temporary cash investments include cash, cash
investments and any highly liquid investments purchased with an original
maturity of three months or less. The Company's acquisitions of and dispositions
of subsidiaries included certain noncash activities (see Note 9). During 1994,
the Company sold certain real property in exchange for notes receivable of
$312,000. For each of the three years in the period ended December 31, 1995, the
Company issued common shares with a market value of $20,747, $17,163 and $38,280
respectively, in lieu of cash compensation. The Company recognizes a tax benefit
in additional paid-in capital from exercise of stock options (see Note 6).

Fair Value of Financial Instruments -- The carrying amounts of cash
equivalents, certificates of deposit, receivables, and accounts payable
approximated fair value as of December 31, 1995, because of the relatively short
maturities of these instruments. The carrying amount of long-term debt,
including current maturities, approximated fair value as of December 31, 1995,
based upon terms and conditions currently available to the Company in comparison
to terms and conditions of the existing long-term debt. The Company has
investments in life insurance contracts to fund obligations under deferred
compensation agreements (see Note 7). At December 31, 1995, the cash surrender
values of these policies, net of policy loans of $10.2 million, aggregated $7.9
million which exceeded the $5.6 million carrying amount of the investments in
insurance contracts.

Inventories -- Inventories are valued at the lower of cost (first-in,
first-out method) or market.

F-6
<PAGE> 32

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

Property and equipment -- Depreciation is computed by the straight-line
method on the costs of the assets, at rates based on their estimated useful
lives as follows: land improvements 3-15 years; buildings and improvements 10-30
years; machinery and equipment 3-10 years; transportation equipment 2-7 years;
and office furniture and fixtures 2-10 years.

Upon sale or retirement of property and equipment, including real estate
held for sale and rental properties, the asset cost and related accumulated
depreciation is removed from the accounts and any resulting gain or loss is
included in income.

Real Estate Held For Sale -- Real estate held for sale represents real
properties which are carried at the lower of estimated realizable value or cost
less accumulated depreciation. As of December 31, 1994 and 1995, the carrying
value of real estate held for sale (and the related accumulated depreciation)
aggregated $3,682,007 ($223,124) and $3,682,007 ($223,468), respectively.

Rental Properties -- Rental properties represent owned facilities which are
currently leased to others under lease agreements with expiring terms through
August 31, 1997. Certain of the lease agreements contain options for the lessee
to renew the lease or purchase the facilities. Lease income for the years ended
December 31, 1993, 1994 and 1995 aggregated $539,919, $570,955 and $381,287,
respectively. Future minimum annual lease income under these lease agreements is
as follows: 1996 - $237,600 and 1997 - $158,400. The rental properties are
carried at cost less accumulated depreciation, which is not in excess of net
realizable value. The rental properties are depreciated by the straight-line
method over the estimated useful lives of the assets (15-20 years). At December
31, 1994 and 1995, the cost of rental properties (and the related accumulated
depreciation) aggregated $2,944,062 ($1,147,869) and $1,795,504 ($869,966),
respectively.

Intangibles -- Intangibles represent the excess of cost over the fair value
of net assets of businesses acquired, and are being amortized over a 40-year
period by the straight-line method. The Company reviews the carrying value of
intangibles to assess recoverability annually or whenever events or changes in
circumstances warrant. Impairments are recognized in operating results when a
permanent diminution in value has occurred.

Income Taxes -- The provision for income taxes is based on income
recognized for financial statement purposes and includes the effects of
temporary differences between such income and that recognized for tax return
purposes. Deferred tax assets and liabilities are established for the expected
future tax consequences of events that have been included in the financial
statements or tax returns using enacted tax rates in effect for the years in
which the differences are expected to reverse.

Research and Development Expenses -- Research and development expenses
charged to operations were approximately $2,012,000, $1,925,000 and $2,240,000
for the years ended December 31, 1993, 1994 and 1995, respectively.

Warranty Expense -- The Company accrues an estimated warranty liability at
the time the warranted products are sold.

Impairment of Long-Lived Assets -- In March 1995, Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of" ("SFAS No. 121"), was issued by
the Financial Accounting Standards Board. The Company is required to adopt this
pronouncement in 1996. The Company does not anticipate that adoption of SFAS No.
121 will have a significant impact on the Company's consolidated financial
condition or results of operations.

F-7
<PAGE> 33

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 2: OPERATIONS IN DIFFERENT INDUSTRIES.

The Company's business and operations are comprised of two segments:
Vehicles (recreational, vans, specialized and related parts and accessories) and
Housing (modular). Segment information is as follows:

<TABLE>
<CAPTION>
1993 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
Net sales:
Vehicles....................................... $281,084,221 $327,430,404 $432,612,786
Housing........................................ 48,427,005 66,593,370 83,249,279
------------ ------------ ------------
Total.................................. $329,511,226 $394,023,774 $515,862,065
============ ============ ============
Operating income (loss):
Vehicles....................................... $ 7,404,742 $ 15,434,057 $ 18,136,796
Housing........................................ 6,043,283 8,192,322 8,644,906
General Corporate.............................. (780,032) (1,126,776) (122,719)
------------ ------------ ------------
Total.................................. $ 12,667,993 $ 22,499,603 $ 26,658,983
============ ============ ============
Identifiable assets:
Vehicles....................................... $ 65,084,605 $ 71,153,298 $ 89,173,588
Housing........................................ 12,544,448 20,907,090 23,957,173
General Corporate.............................. 17,107,429 32,960,894 37,117,996
------------ ------------ ------------
Total.................................. $ 94,736,482 $125,021,282 $150,248,757
============ ============ ============
Depreciation:
Vehicles....................................... $ 1,795,676 $ 1,814,505 $ 2,218,420
Housing........................................ 764,494 965,627 1,487,159
General Corporate.............................. 306,898 309,470 287,703
------------ ------------ ------------
Total.................................. $ 2,867,068 $ 3,089,602 $ 3,993,282
============ ============ ============
Additions to property and equipment (including
property and equipment acquired in the
acquisition of businesses):
Vehicles.................................... $ 3,130,908 $ 2,714,736 $ 8,905,728
Housing..................................... 1,418,231 3,740,864 6,834,516
General Corporate........................... 127,182 224,791 2,602,967
------------ ------------ ------------
Total.................................. $ 4,676,321 $ 6,680,391 $ 18,343,211
============ ============ ============
</TABLE>

NOTE 3: INVENTORIES.

Inventories consist of the following:

<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Raw materials..................................... $15,751,077 $16,580,013
Work in process................................... 5,053,551 7,268,705
Finished goods.................................... 27,347,714 31,585,779
----------- -----------
Total................................... $48,152,342 $55,434,497
=========== ===========
</TABLE>

F-8
<PAGE> 34

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 4: SHORT-TERM BORROWINGS.

At December 31, 1995, the Company has an unsecured bank line of credit
aggregating $30 million ($20 million at December 31, 1994) with interest on
outstanding borrowings payable monthly at a formula rate, which approximates the
bank's cost of funds plus a mark-up, which generally results in a rate below the
prime rate. There were no outstanding borrowings under this bank line of credit
at December 31, 1994 and 1995.

NOTE 5: LONG-TERM DEBT.

Long-term debt consists of the following:

<TABLE>
<CAPTION>
1994 1995
---------- -----------
<S> <C> <C>
Obligations under industrial development revenue
bonds, variable rates, with various maturities
through 2009..................................... $7,591,006 $ 6,666,125
Promissory notes payable, issued or assumed in the
acquisition of Georgie Boy (see Note 9), payable
in annual installments through January 2001,
interest payable monthly at the prime rate
(8 1/2% at December 31, 1995), unsecured......... -- 7,492,173
Real estate mortgages, paid in full in 1995........ 873,491 --
Other.............................................. 89,450 53,930
----------- -----------
Total.................................... 8,553,947 14,212,228
Less, Current maturities......................... 1,530,553 2,094,472
----------- -----------
Long-term debt........................... $7,023,394 $12,117,756
=========== ===========
</TABLE>

Aggregate maturities of long-term debt for each of the next five years
ending December 31 are as follows: 1996 -- $2,094,472; 1997 -- $2,076,496;
1998 -- $2,058,519; 1999 -- $2,058,519 and 2000 -- $1,757,924.

In connection with three of its industrial development revenue bond
obligations, the Company obtained, as a credit enhancement for the bondholders,
irrevocable letters of credit in favor of the bond trustees. The agreements
relating to these letters of credit contain, among other provisions, certain
covenants relating to required amounts of working capital and net worth and the
maintenance of certain required financial ratios.

NOTE 6: COMMON STOCK MATTERS AND EARNINGS PER SHARE.

On January 19, 1990, the Board of Directors adopted a shareholder rights
plan and declared a dividend distribution of one common share purchase right on
each outstanding common share. Such rights only become exercisable, or
transferable apart from the common shares, (i) ten days after a person or group
of persons ("Acquiring Person") acquires or obtains the right to acquire
beneficial ownership of 20% or more of the Company's common shares or (ii) ten
business days (or such later date established by the Board) following the
commencement of a tender offer or exchange offer for 20% or more of the
Company's common shares. Upon the occurrence of certain events and after the
rights become exercisable, each right would, subject to certain adjustments and
alternatives, entitle the rightholder to purchase the number of common shares of
the Company or the acquiring company having a market value of twice the $15
exercise price of the right (except that the Acquiring Person would not be able
to purchase common shares of the Company on these terms). The rights are
nonvoting, may be redeemed by the Company at a price of $.005 per right at any
time prior to the date on which an Acquiring Person acquires 20% or more of the
Company's common shares and expire February 15, 2000.

F-9
<PAGE> 35

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 6: COMMON STOCK MATTERS AND EARNINGS PER SHARE (CONTINUED).

The Company's stock option plan provides for the granting to eligible key
employees of options to purchase common shares. Under terms of the plan, the
Company may grant incentive stock options or non-qualified stock options. In the
case of options granted to an employee of the Company who is a 10% or more
shareholder, the option price is an amount per share of not less than 110% of
the fair market value per share on the date of granting the option. The option
price for options granted to all other key employees is an amount per share of
not less than the fair market value per share on the date of granting the
option. No such options may be exercised during the first year after grant, and
are exercisable cumulatively in four installments of 25% each year thereafter.

The transactions for shares under options for each of the two years in the
period ended December 31, 1995 were as follows:

<TABLE>
<CAPTION>
NUMBER PER SHARE
OF SHARES OPTION PRICE
--------- -----------------
<S> <C> <C>
Outstanding, January 1, 1994................... 415,650 $1.9375 - $8.3750
Granted...................................... 174,600 6.4375 - 8.4375
Canceled..................................... (5,450) 1.9375 - 8.4375
Exercised.................................... (126,000) 1.9375 - 8.3750
--------
Outstanding, December 31, 1994................. 458,800 1.9375 - 8.4375
Granted...................................... 272,400 7.4375 - 8.4375
Canceled..................................... (33,150) 1.9375 - 8.4375
Exercised.................................... (123,150) 1.9375 - 8.4375
--------
Outstanding, December 31, 1995................. 574,900 2.1875 - 8.4375
========
Exercisable, December 31, 1995................. 153,262 2.1875 - 8.4375
========
</TABLE>

As of December 31, 1995, 1,024,800 shares were reserved for the granting of
future stock options, compared with 1,264,050 shares at December 31, 1994.

The Company has an employee stock purchase plan under which a total of
585,700 shares of the Company's common stock are reserved for purchase by
full-time employees through payroll deductions, cash payments, or a combination
of both at a price equal to 90% of the market price of the Company's common
stock on the purchase date. As of December 31, 1995, there were 157 employees
actively participating in the plan. Since its inception, a total of 214,300
shares have been purchased by employees under the plan. Certain restrictions in
the plan limit the amount of payroll deductions and cash payments an employee
may make in any one quarter. There are also limitations as to the amount of
ownership in the Company an employee may acquire under the plan.

In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123"), was issued by the
Financial Accounting Standards Board. This statement requires the fair value of
stock options and other stock-based compensation issued to employees to either
be included as compensation expense in the income statement, or the pro forma
effect on net income and earnings per share of such compensation expense to be
disclosed in the notes to the financial statements. The Company expects to adopt
SFAS No. 123 on a disclosure basis only, and the disclosure requirements are
effective for fiscal years beginning after December 15, 1995. As such,
implementation of SFAS No. 123 will not impact the Company's consolidated
balance sheet or income statement.

F-10
<PAGE> 36

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

A summary of the changes in common shares, additional paid-in capital and
treasury shares for each of the three years in the period ended December 31,
1995 follows:

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN TREASURY
SHARES CAPITAL SHARES
----------- ---------- ------------
<S> <C> <C> <C>
Balance, January 1, 1993................ $35,468,429 $ 752,397 $(15,669,377)
Sale of 2,554 common shares under
employee stock purchase plan....... 17,333 -- --
Issuance of 2,712 common shares from
treasury........................... -- 2,360 18,387
Issuance of 162,500 common shares upon
the exercise of stock options...... 637,328 -- --
Tax benefit from current and prior
years' exercise of stock options... -- 434,000 --
----------- ---------- ------------
Balance, December 31, 1993.............. 36,123,090 1,188,757 (15,650,990)
Sale of 6,526 common shares under
employee stock purchase plan....... 42,315 -- --
Issuance of 2,340 common shares from
treasury........................... -- 1,298 15,865
Issuance of 126,000 common shares upon
the exercise of stock options...... 434,982 -- --
Tax benefit from current and prior
years' exercise of stock options... -- 241,000 --
----------- ---------- ------------
Balance, December 31, 1994.............. 36,600,387 1,431,055 (15,635,125)
Sale of 12,130 common shares under
employee stock purchase plan....... 94,396 -- --
Issuance of 4,638 common shares from
treasury........................... -- 6,834 31,446
Issuance of 123,150 common shares upon
the exercise of stock options...... 456,419 -- --
Tax benefit from current year exercise
of stock options................... -- 227,000 --
----------- ---------- ------------
Balance, December 31, 1995.............. $37,151,202 $1,664,889 ($15,603,679)
=========== ========== ============
</TABLE>

Earnings per share are based on the weighted average number of common
shares outstanding (1993 -- 14,608,392, 1994 -- 14,743,926 and
1995 -- 14,881,968). The common share equivalents (employee stock options) have
not entered into the computation of earnings per share because their inclusion
in each year reported would have been immaterial. Fully-diluted earnings per
share do not differ materially from primary earnings per share.

F-11
<PAGE> 37

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 7: INCENTIVE AND DEFERRED COMPENSATION PLANS.

The Company has incentive compensation plans for its officers and other key
management personnel. The amounts charged to expense for the years ended
December 31, 1993, 1994 and 1995 aggregated $1,760,967, $2,146,905 and
$2,577,692, respectively.

The Company has established a deferred compensation plan for executives and
other key employees. The plan provides for benefit payments upon termination of
employment, retirement, disability, or death. The Company recognizes the cost of
this plan over the projected service lives of the participating employees based
on the present value of the estimated future payments to be made. The plan is
funded by insurance contracts on the lives of the participants, and investments
in insurance contracts (included in other assets) aggregating $5,623,123 as of
December 31, 1994 and 1995. The deferred compensation obligations, which
aggregated $5,460,677 and $5,952,958 as of December 31, 1994 and 1995,
respectively, are included in other non-current liabilities, with the current
portion ($180,207 and $186,854 at December 31, 1994 and 1995, respectively)
included in other accrued expenses.

The Company adopted the Coachmen Assisted Retirement For Employees
(C.A.R.E.) program effective January 1, 1994. All full-time employees of the
Company (subject to certain eligibility restrictions) are eligible to
participate. C.A.R.E. provides a mechanism for each eligible employee to
establish an individual retirement account and receive matching contributions
from the Company based on the amount contributed by the employee, the employee's
years of service and the profitability of the Company. Company matching
contributions charged to expense under the C.A.R.E. program aggregated $546,984
and $537,118 for the years ended December 31, 1994 and 1995, respectively.

NOTE 8: INCOME TAXES.

Income taxes are summarized as follows:

<TABLE>
<CAPTION>
1993 1994 1995
---------- ---------- -----------
<S> <C> <C> <C>
Federal:
Current................................. $2,000,000 $7,918,000 $ 9,530,000
Deferred................................ (2,000,000) (730,000) (79,000)
---------- ---------- -----------
-- 7,188,000 9,451,000
---------- ---------- -----------
State:
Current................................. 450,000 968,000 971,000
Deferred................................ (450,000) (128,000) (14,000)
---------- ---------- -----------
-- 840,000 957,000
---------- ---------- -----------
Total........................... $ -- $8,028,000 $10,408,000
========== ========== ===========
</TABLE>

F-12
<PAGE> 38

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

The following is a reconciliation of the provision for income taxes
computed at the federal statutory rate (34% in 1993, 35% in 1994 and 35% in
1995) to the reported provision for income taxes:

<TABLE>
<CAPTION>
1993 1994 1995
----------- ---------- -----------
<S> <C> <C> <C>
Computed federal income tax at federal statutory
rate........................................... $ 4,344,000 $7,984,000 $ 9,785,000
Changes resulting from:
Nontaxable life insurance proceeds............. (285,000) -- --
Foreign Sales Corporation subject to lower tax
rate........................................ (230,000) (186,000) (222,000)
State income taxes, net of federal income tax
benefit..................................... -- 546,000 622,000
Alternative minimum tax credit................. (275,000) -- --
Tax benefit of utilization of net operating
loss carryforward........................... (2,233,000) -- --
Valuation allowance............................ (1,519,000) (526,000) --
Other, net..................................... 198,000 210,000 223,000
----------- ---------- -----------
Total.................................. $ -- $8,028,000 $10,408,000
=========== ========== ===========
</TABLE>

The components of the net deferred tax assets as of December 31, 1994 and
1995 are as follows:

<TABLE>
<CAPTION>
1994 1995
---------- -----------
<S> <C> <C>
Current deferred tax asset:
Accrued warranty expense......................... $1,084,000 $ 1,321,000
Allowance for doubtful receivables............... 394,000 317,000
Other............................................ 476,000 1,027,000
---------- -----------
Net current deferred tax asset........... $1,954,000 $ 2,665,000
========== ===========
Noncurrent deferred tax asset (liability):
Deferred compensation............................ $2,220,000 $ 2,400,000
Operating loss carryforwards, primarily state.... 600,000 --
Property and equipment........................... (727,000) (1,441,000)
Intangible assets................................ -- (84,000)
---------- -----------
2,093,000 875,000
Less, valuation allowance..................... 600,000 --
---------- -----------
Net noncurrent deferred tax asset........ $1,493,000 $ 875,000
========== ===========
</TABLE>

NOTE 9: ACQUISITIONS AND DISPOSITIONS.

On January 3, 1995, the Company acquired all of the issued and outstanding
capital stock of Georgie Boy Mfg., Inc. ("Georgie Boy") a manufacturer of Class
A motorhomes. The purchase price aggregated $12.8 million and consisted of $6.7
million in cash and a $6.1 million promissory note payable to the seller. In
conjunction with the acquisition, the Company assumed liabilities of $8,757,000.

F-13
<PAGE> 39

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 9: ACQUISITIONS AND DISPOSITIONS (CONCLUDED).

The acquisition was accounted for using the purchase method, and the
operating results of Georgie Boy have been included in the Company's 1995
consolidated financial statements from the date of acquisition. The excess of
the purchase price over the cost of acquired net assets ("goodwill") of $5.0
million is being amortized on a straight-line basis over forty years. Unaudited
pro forma financial information for 1994, as if this acquisition had occurred on
January 1, 1994, is as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994
(UNAUDITED)
-----------------
<S> <C>
Net sales............................................ $ 483,870,000
Net income........................................... 15,896,000
Net income per share................................. 1.08
</TABLE>

On September 23, 1994, the Company acquired substantially all of the
operating assets of the North Carolina division of Muncy Building Enterprises,
L.P. ("Muncy"), a manufacturer of modular homes. The assets acquired consisted
principally of property and equipment and inventories of modular homes. The
purchase price of $2,761,740 was allocated to the assets acquired and consisted
of $1,387,740 in cash and $1,374,000 of assumed liabilities, including long-term
debt of $843,917. The acquisition was accounted for as a purchase and,
accordingly, the operating results of Muncy are included in the Company's
consolidated financial statements from the date of acquisition. Pro forma
results of operations for 1993 and 1994 are not presented herein as the amounts
would not be materially different from the Company's historical results.

On April 29, 1994, the Company sold certain assets of its wholly owned
subsidiary, Southern Ambulance Builders, Inc., for $1,589,809 consisting of
$789,809 in cash and a promissory note for $800,000, which was subsequently
collected. The assets sold consisted of inventories, property and equipment
(excluding land) and other miscellaneous assets. The sales price equaled the net
book value of the assets sold. In a separate transaction, the Company sold
certain land of Southern Ambulance Builders, Inc. for $611,998 in cash,
resulting in a pre-tax gain of $170,129.

In addition, during 1994, the Company sold its 52% ownership interest in
Luxury Conversions for $133,721, and substantially all the assets of its wholly
owned subsidiary, Auranco, for $1,129,320. The Auranco transaction resulted in a
pre-tax gain of $143,907. There was no gain or loss on the Luxury Conversions
sale.

NOTE 10: COMMITMENTS AND CONTINGENCIES.

Lease Commitments

The Company leases various manufacturing and office facilities under
noncancelable agreements which expire at various dates through November 2006.
Several of the leases contain renewal options and options to purchase and
require the payment of property taxes, normal maintenance and insurance on the
properties. Certain office and delivery equipment are also leased under various
noncancelable agreements. The above described leases are accounted for as
operating leases.

Future minimum annual lease commitments at December 31, 1995 aggregated
$3,476,300 and are payable as follows: 1996 -- $1,037,600; 1997 -- $1,008,700;
1998 -- $834,900; 1999 -- $374,500; 2000 -- $123,000 and thereafter -- $97,600.

Total rental expense for the years ended December 31, 1993, 1994 and 1995
aggregated $1,604,576, $1,396,183 and $1,222,156, respectively.

F-14
<PAGE> 40

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

Obligation to Purchase Consigned Inventories

The Company obtains vehicle chassis for its recreational and specialized
vehicle products directly from automobile manufacturers under converter pool
agreements. The agreements generally provide that the manufacturer will provide
a supply of chassis at the Company's various production facilities under the
terms and conditions as set forth in the agreement. Chassis are accounted for as
consigned inventory until either assigned to a unit in the production process or
90 days have passed. At the earlier of these dates, the Company is obligated to
purchase the chassis and it is recorded as inventory. At December 31, 1994 and
1995, chassis inventory, accounted for as consigned inventory, approximated
$14.0 million and $18.0 million, respectively.

Repurchase Agreements

The Company is contingently liable to banks and other financial
institutions on repurchase agreements in connection with financing provided by
such institutions to most of the Company's independent dealers in connection
with their purchase of the Company's recreational vehicle products. These
agreements provide for the Company to repurchase its products from the financial
institution in the event that they have repossessed them upon a dealer's
default. Although the total contingent liability approximated $129 million at
December 31, 1995 ($90 million at December 31, 1994), the risk of loss resulting
from these agreements is spread over the Company's numerous dealers and is
further reduced by the resale value of the products repurchased.

Self-Insurance

The Company is self-insured for a portion of its product liability and
certain other liability exposures. Depending on the nature of the claim and the
date of occurrence, the Company's maximum exposure ranges from $250,000 to
$500,000 per claim. The Company accrues an estimated liability based on various
factors, including sales levels and the amount of outstanding claims. Management
believes the liability recorded is adequate to cover the Company's self-insured
risk.

Litigation

The Company is involved in various legal proceedings which are ordinary
routine litigations incidental to the industry and which are covered in whole or
in part by insurance. Management believes that any liability which may result
from these proceedings will not be significant.

NOTE 11: INSURANCE SETTLEMENT.

On August 14, 1995, a fire destroyed the Company's Prodesign production
facility. The loss was covered by insurance and estimated insurance proceeds in
excess of the net book value of destroyed assets and related expenses resulted
in a gain of $2.1 million which is included in other nonoperating income. Other
receivables at December 31, 1995 include $2.4 million of estimated insurance
recoveries.

F-15
<PAGE> 41

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

NOTE 12: UNAUDITED INTERIM FINANCIAL INFORMATION.

Certain selected unaudited quarterly financial information for the years
ended December 31, 1994 and 1995 is as follows:

<TABLE>
<CAPTION>
1994
QUARTER ENDED
---------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales......................... $ 93,635,237 $100,320,091 $102,974,854 $ 97,093,592
Gross profit...................... 12,111,138 15,592,188 15,345,676 15,408,065
Income before income taxes........ 3,313,785 6,584,343 6,140,566 6,773,400
Net income........................ 2,620,785 4,118,343 3,808,566 4,236,400
Net income per common share....... .18 .28 .26 .29
</TABLE>

<TABLE>
<CAPTION>
1995
QUARTER ENDED
---------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales......................... $131,770,379 $128,192,670 $130,973,395 $124,925,621
Gross profit...................... 16,562,112 17,960,958 18,661,458 18,050,871
Income before income taxes........ 5,086,464 6,709,086 7,458,426 8,703,424
Net income........................ 3,203,464 4,212,086 4,683,426 5,450,424
Net income per common share....... .22 .28 .31 .37
</TABLE>

The fourth quarter of 1995 includes a $2.1 million pre-tax gain on
insurance settlements (see Note 11).

The common share equivalents described in Note 6 did not enter into the
computations of net income per common share for any of the quarters during 1994
and 1995 because their inclusion was immaterial.

The sum of quarterly earnings per share for the four quarters may not equal
annual earnings per share due to changes in the average common shares.

NOTE 13: SUBSEQUENT EVENTS.

On July 17, 1996, the Board of Directors declared a two-for-one stock split
of the Company's common shares, which was paid on August 28, 1996 to
shareholders of record on August 7, 1996. All share and per share data in the
accompanying consolidated financial statements and notes thereto have been
retroactively restated to reflect this stock split.

Also on July 17, 1996, the Board of Directors adopted a resolution to amend
the Company's Articles of Incorporation to increase the authorized common shares
from 30,000,000 shares to 60,000,000 shares.

F-16
<PAGE> 42

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
-------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments......................................... $ 26,853,025
Certificates of deposit..................................................... 500,000
Trade receivables and current portion of notes receivable, less allowance
for doubtful receivables of $1,048,000................................... 30,864,067
Other receivables........................................................... 1,883,291
Inventories................................................................. 64,352,179
Prepaid expenses and other.................................................. 1,366,374
Deferred income taxes....................................................... 2,665,000
------------
Total current assets................................................... 128,483,936
------------
PROPERTY AND EQUIPMENT, at cost
Land and improvements....................................................... 6,770,639
Buildings and improvements.................................................. 33,632,165
Machinery and equipment..................................................... 13,133,044
Transportation equipment.................................................... 10,330,812
Office furniture and fixtures............................................... 4,761,627
------------
68,628,287
Less, Accumulated depreciation.............................................. 28,520,970
------------
40,107,317
------------
OTHER ASSETS
Real estate held for sale................................................... 3,627,322
Rental properties........................................................... 879,715
Intangibles, less accumulated amortization of $346,849...................... 5,097,427
Deferred income taxes....................................................... 875,000
Other....................................................................... 8,847,827
------------
19,327,291
------------
TOTAL ASSETS.................................................................. $ 187,918,544
============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt........................................ $ 2,108,979
Accounts payable, trade..................................................... 29,297,459
Accrued wages, salaries and commissions..................................... 5,201,283
Accrued dealer incentives................................................... 2,046,807
Accrued warranty expense.................................................... 4,417,314
Accrued income taxes........................................................ 2,645,340
Other accrued expenses...................................................... 12,257,440
------------
Total current liabilities.............................................. 57,974,622
LONG-TERM DEBT................................................................ 10,260,075
OTHER......................................................................... 6,363,202
------------
Total liabilities...................................................... 74,597,899
------------
SHAREHOLDERS' EQUITY
Common shares, without par value: authorized 60,000,000 shares; issued
18,441,624 shares........................................................ 38,139,317
Additional paid-in capital.................................................. 1,693,312
Retained earnings........................................................... 89,064,453
------------
128,897,082
Less, Cost of shares reacquired for the treasury, 3,340,996 shares.......... 15,576,437
------------
Total shareholders' equity............................................. 113,320,645
------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................................... $ 187,918,544
============
</TABLE>

See notes to condensed consolidated financial statements.

F-17
<PAGE> 43

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------------- ----------------------------
1995 1996 1995 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales............................. $130,973,395 $154,244,238 $390,936,444 $469,599,312
Cost of goods sold.................... 112,311,937 130,087,358 337,751,916 401,328,935
------------ ------------ ------------ ------------
Gross profit................ 18,661,458 24,156,880 53,184,528 68,270,377
------------ ------------ ------------ ------------
Operating expenses:
Selling and delivery................ 6,753,034 6,572,380 19,586,516 20,545,700
General and administrative.......... 4,308,232 4,888,141 14,428,916 16,151,897
------------ ------------ ------------ ------------
11,061,266 11,460,521 34,015,432 36,697,597
------------ ------------ ------------ ------------
Operating income............ 7,600,192 12,696,359 19,169,096 31,572,780
------------ ------------ ------------ ------------
Nonoperating income (expense):
Interest expense.................... (793,353) (398,520) (2,306,449) (1,239,555)
Interest income..................... 372,889 374,114 891,010 979,056
Gain on sale of properties, net..... 13,394 1,979 786,540 728,548
Other, net.......................... 265,304 509,631 713,779 958,430
------------ ------------ ------------ ------------
(141,766) 487,204 84,880 1,426,479
------------ ------------ ------------ ------------
Income before income taxes
and cumulative effect of
accounting change......... 7,458,426 13,183,563 19,253,976 32,999,259
Income taxes.......................... 2,775,000 4,851,000 7,155,000 12,024,000
------------ ------------ ------------ ------------
Income before cumulative
effect of accounting
change.................... 4,683,426 8,332,563 12,098,976 20,975,259
Cumulative effect of accounting change
for Company-owned life insurance
policies............................ -- -- -- 2,293,983
------------ ------------ ------------ ------------
Net income.................. $ 4,683,426 $ 8,332,563 $ 12,098,976 23,269,242
============ ============ ============ ============
Earnings per common share:
Income before cumulative effect
of accounting change........... $ .31 $ .55 $ .81 $ 1.40
Cumulative effect of accounting
change......................... -- -- -- .15
------------ ------------ ------------ ------------
Net income....................... $ .31 $ .55 $ .81 $ 1.55
============ ============ ============ ============
Weighted average number of common
shares outstanding.................. 14,895,930 15,070,652 14,871,300 15,028,672
============ ============ ============ ============
Cash dividends per common share....... $ .035 $ .05 $ .105 $ .135
============ ============ ============ ============
</TABLE>

See notes to condensed consolidated financial statements.

F-18

<PAGE> 44

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER
30,
----------------------------
1995 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities...................... $ 18,707,227 $ 22,764,705
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of property and equipment, real estate held for sale
and rental properties..................................... 2,899,362 1,380,557
Sale of investments......................................... 263,888 --
Acquisitions of property and equipment......................... (10,162,117) (12,066,649)
Acquisition of a business, net of acquired cash................ (4,313,046) --
Unexpended industrial revenue bond proceeds.................... 3,337,122 --
Proceeds from life insurance death benefit..................... -- 171,770
Other.......................................................... (92,417) 466,562
------------ ------------
Net cash (used in) investing activities..................... (8,067,208) (10,047,760)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of short-term borrowings.............................. (900,000) --
Payments of long-term debt..................................... (1,598,786) (1,843,174)
Cash dividends paid............................................ (1,561,372) (2,029,605)
Proceeds from issuance of common shares........................ 352,687 988,115
------------ ------------
Net cash (used in) financing activities..................... (3,707,471) (2,884,664)
------------ ------------
Increase in cash and temporary cash investments.................. 6,932,548 9,832,281
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period............................................ 19,534,385 17,020,744
------------ ------------
End of period.................................................. $ 26,466,933 $ 26,853,025
============ ============
Noncash investing and financing activities:
Liabilities assumed in acquisition of a business............... $ 8,757,472 $ --
Long-term debt issued in conjunction with acquisition of a
business.................................................... 6,141,129 --
</TABLE>

See notes to condensed consolidated financial statements.

F-19
<PAGE> 45

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)

NOTE A: BASIS OF PRESENTATION.

In the opinion of management, the information furnished herein includes all
adjustments of a normal and recurring nature necessary to reflect a fair
statement of the interim periods reported. The results of operations for the
three and nine-month periods ended September 30, 1996 are not necessarily
indicative of the results to be expected for the full year.

NOTE B: INVENTORIES.

Inventories consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
------------
<S> <C>
Raw material..................................................... $ 23,423,558
Work in-process.................................................. 7,867,030
Finished goods................................................... 33,061,591
------------
Total....................................................... $ 64,352,179
============
</TABLE>

NOTE C: ACCOUNTING CHANGE.

Effective January 1, 1996, the Company changed its method of accounting for
its investments in life insurance contracts which were purchased to fund
liabilities under deferred compensation agreements with executives and other key
employees. Prior to January 1, 1996, the Company accounted for its investments
in life insurance contracts by capitalizing premiums under the ratable charge
method (a method of accounting which was acceptable when the insurance contracts
were originally acquired and continued to be acceptable for contracts acquired
prior to November 14, 1985). Effective January 1, 1996, the Company changed to
the cash surrender value method of accounting which is the preferred method
under generally accepted accounting principles, as this method more accurately
reflects the economic value of the contracts.

On January 1, 1996, the Company recorded a $2.3 million noncash credit for
the cumulative effect of this accounting change. This accounting method change
also increased net income for the nine months ended September 30, 1996 by
$749,970 or $.05 per share. On a pro forma basis, net income and net income per
share for the nine months ended September 30, 1995 would have been $12,656,520
and $.85, respectively, if this accounting change had been made prior to 1995.

NOTE D: COMMON STOCK MATTERS.

On July 17, 1996, the Board of Directors declared a two for-one stock split
of the Company's common shares, which was paid on August 28, 1996 to
shareholders of record on August 7, 1996. All share and per share data in the
accompanying condensed consolidated financial statements have been retroactively
restated to reflect this stock split.

NOTE E: COMMITMENTS AND CONTINGENCIES.

The Company was contingently liable at September 30, 1996 to banks and
other financial institutions on repurchase agreements in connection with
financing provided by such institutions to most of the Company's independent
dealers in connection with their purchase of the Company's recreational vehicle
products. These

F-20
<PAGE> 46

COACHMEN INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1996
(UNAUDITED)

agreements provide for the Company to repurchase its products from the financing
institution in the event that they have repossessed them upon a dealer's
default. The risk of loss resulting from these agreements is spread over the
Company's numerous dealers and is further reduced by the resale value of the
products repurchased. The Company is involved in various legal proceedings which
are ordinary litigations incidental to the industry and which are covered in
whole or in part by insurance. Management believes that any liability which may
result from these proceedings will not be significant.

NOTE F: SUBSEQUENT EVENT.

On October 18, 1996, the Company's Board of Directors approved a resolution
to cancel the Company's stock repurchase program.

F-21
<PAGE> 47

[Picture of Folding Camping Trailer by Viking Rv]

[Picture of Executive and Task Seating
by Lux Company]

[Picture of Destiny Luxury Class A Motorhome]

[Picture of Coachmen Ranger Truck Camper]

[Picture of Fiberglass Running Boards
from Viking Formed Products]

[Picture of All American Homes' Easton Cape Cod--Modular Home]

(LOGO)
<PAGE> 48

------------------------------------------------------------
------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF
WHICH INFORMATION IS FURNISHED.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................... 3
Incorporation of Certain Documents by Reference......... 3
Prospectus Summary...................................... 4
Cautionary Statement Regarding Forward Looking
Information........................................... 7
Investment Considerations............................... 7
Use of Proceeds......................................... 10
Dividend Policy......................................... 10
Capitalization.......................................... 10
Price Range of Common Stock............................. 10
Selected Consolidated Financial Data.................... 11
Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 12
Business................................................ 16
Management.............................................. 22
Description of Common Stock............................. 23
Underwriting............................................ 24
Legal Matters........................................... 25
Experts................................................. 25
Index to Consolidated Financial Statements.............. F-1
</TABLE>

------------------------------------------------------------
------------------------------------------------------------

1,800,000 SHARES

COACHMEN LOGO

COACHMEN
INDUSTRIES, INC.

COMMON STOCK

---------------------------
PROSPECTUS
---------------------------

OPPENHEIMER & CO., INC.

NOVEMBER 14, 1996

------------------------------------------------------------
------------------------------------------------------------