United States

                       Securities and Exchange Commission
                             Washington, D. C. 20547

                                    FORM 10-K

[X]  Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended October 3, 1999.

                                       or

[ ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 for the transition period from __________to _________.

                         Commission File number: 0-22048

                              STARCRAFT CORPORATION
             (Exact name of Registrant as specified in its charter)

             Indiana                                        34-1817634
  (State or other Jurisdiction                           (I.R.S. Employer
of Incorporation or Organization)                       Identification No.)

      Post Office Box 1903, 2703 College Avenue, Goshen, Indiana 46527-1903
                    (Address of Principal Executive Offices)

        Registrant's telephone number including area code: (219) 533-1105

          Securities registered pursuant to Section 12(b) of the Act:

                                      None

          Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, without par value
                          Common Share Purchase Rights
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of December 21, 1999, was $18,627,648.

The  number of shares of the  Registrant's  Common  stock,  without  par  value,
outstanding as of December 22, 1999, was 4,199,928 shares.


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<PAGE>


                              STARCRAFT CORPORATION
                                    Form 10-K
                                      Index

                                     PART 1

Item 1.  Business
Item 2.  Properties
Item 3.  Legal Proceedings
Item 4.  Submission of Matters to a Vote of Security Holders

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
Item 6.  Selected Financial Data
Item 7.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Item 8.  Financial Statements and Supplementary Data
Item 9.  Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on form 8-K.

Signatures



                                    2 of 22
<PAGE>



                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

Starcraft  Corporation (the "Company"),  an Indiana corporation founded in 1990,
is  a  manufacturer  of  second-stage,   custom  vehicles  including  conversion
vehicles, commercial buses and OEM Automotive Supply.


BACKGROUND

Starcraft  traces its  history  to 1903 when Star Tank  Company  was  founded in
Goshen,  Indiana  as a maker of metal  farm  equipment.  Over the  course of the
century the  Company's  predecessor  became a leading  manufacturer  of aluminum
boats and  recreational  vehicles  and, in the late 1970's,  led the  automotive
conversion  industry by producing  luxury van  conversions  for middle and upper
income consumers.  In 1987, the predecessor's  management  completed a leveraged
buyout and, in 1988, sold the boat manufacturing  business. On January 18, 1991,
the Company  purchased the assets of the  automotive  and  recreational  vehicle
divisions,  and simultaneously sold the recreational vehicle division to a third
party.

In July 1994, the Company acquired  substantially  all of the assets of Imperial
Industries, Inc., another conversion vehicle manufacturer. In February 1997, the
Company  purchased  the assets of  National  Mobility  Corporation  in  Elkhart,
Indiana, a manufacturer of vehicles for the mobility impaired.  In October 1997,
the  Company  started an OEM  automotive  supply  business  with a partner.  The
primary purpose of this business is to supply  conversion  vehicles  directly to
the Big 3 automakers.  In February 1998, the Company started  manufacturing  and
marketing commercial shuttle buses.

The Company  became a public  company in July 1993 and its shares are  currently
trading on the NASDAQ Small Cap Market.

SEGMENTS

The following  table sets forth for the three years ended  October 3, 1999,  the
net  sales  and  operating  profit  for the  Company's  operating  segments,  in
thousands,

                                                       Net Sales
                                          -----------------------------------
                                           1999          1998          1997
                                          -------       -------       -------
Conversion vehicle products               $56,804       $53,092       $72,282
OEM automotive supply                      32,700             0             0
                                          -------       -------       -------
         Total                            $89,504       $53,092       $72,282
                                          =======       =======       =======



                                                   Operating Profit*
                                          --------------------------------------
                                            1999          1998           1997
                                          --------      --------       --------
Conversion vehicle products               $    271      $ (3,199)      $(11,616)
OEM automotive supply                        3,240          (488)             0
                                          --------      --------       --------
         Total                            $  3,511      $ (3,687)      $(11,616)
                                          ========      ========       ========


*Amounts are before general corporate expenses and after minority interest.


                                    3 of 22
<PAGE>

CONVERSION VEHICLE PRODUCTS

The  Company  manufactures  conversion  vehicles  on a  variety  of  GMC  Truck,
Chevrolet,   Ford  and  Dodge  ("OEM")  chassis.   Conversion  vehicles  include
conversion vans, pickup trucks and sport utility vehicles  ("Conversion  Vans"),
vehicles for the mobility impaired and commercial buses.

The Company  receives  chassis  directly from the OEM's which  generally have no
seats,  floor covering or other interior  components.  The Company  modifies the
exterior and interior of the chassis by adding  seats,  carpeting,  electronics,
running  boards and other  items that  enhance  passenger  comfort  and  safety.
Conversion  vehicles are sold and distributed through OEM automobile dealers, or
in the case of commercial buses, through independent commercial bus dealers.

A summary of sales by chassis type follows (000's):

                                    1999       1998       1997
                                   -------    -------    -------
         Fullsize vans             $36,463    $34,442    $41,131
         Minivans                    8,188     11,951     16,882
         Sport utility vehicles      1,528      1,566      2,630
         Pickup trucks                 103        747      7,341
         Commercial buses            6,839      1,199          0
         Parts                       3,683      3,187      4,298
                                   -------    -------    -------
                                   $56,804    $53,092    $72,282
                                   =======    =======    =======

Conversion Vans

The Company  sells  Conversion  Vans to  approximately  400  automobile  dealers
throughout the continental U.S. and internationally. The product is sold through
a  network  of  regional   exclusive   sales   representatives   and   associate
representatives.  Each of its U.S.  dealers is an authorized  dealer for General
Motors,  Ford or Chrysler and most sell and service a full  complement  of cars,
sport utility vehicles and vans. During the past two years, the geographic areas
of the U.S.  where the  company's  sales have been  strongest  include the Great
Lakes region (i.e., Illinois,  Indiana,  Michigan, New York, Ohio, Pennsylvania,
and Wisconsin), and Oklahoma and Texas.

The Company exports Conversion Vans to 17 countries around the world and employs
an international department which is exclusively responsible for the development
of such sales.  International  sales  fluctuate from country to country and over
time depending on import taxes and tariffs and fluctuations in currency exchange
rates as well as local economic conditions. Starcraft's primary overseas markets
are Japan and northern  Europe.  The increase in the value of U.S.  currency and
turmoil in Asian  financial  markets  have  negatively  impacted  the  company's
international sales over the last few years.

The Company  believes the Starcraft name has a  long-standing  reputation in the
conversion van industry for high quality and innovation.

The Company  maintains two primary brands of Conversion Vans. The Starcraft line
features  high-end,  luxury custom vehicles while the Imperial brand competes in
the entry level segment of the market.  Typical  manufacturer  suggested  retail
price (MSRP) to the retail consumer,  including the chassis, from the automotive
dealer  generally  ranges  from  $34,000 to $52,000 for the  Starcraft  line and
$24,000 to $39,000 for the  Imperial  line.  Retail  mark-ups  vary widely among
automotive dealers and are not within the Company's control.

The Company's  Conversion  Van sales do not include the cost of the chassis (see
Chassis and Other Suppliers).  The Company's average  conversion van sales price
to  the  dealer  was  $6,930,  $6,250,  and  $6,140  in  1999,  1998  and  1997,
respectively.

According  to  the  recreational  Vehicle  Industry  Association,  domestic  Van
Conversion  products sold by  manufacturers  during the three  preceding  fiscal
years are as follows:

                                  1999        1998         1997
                                -------     -------      ---------
      Industry unit sales       156,400     148,700        194,800
      Change from prior year        5.2%      (23.7%)        (14.6%)


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<PAGE>

RVIA  statistics  are  based on  reports  of its  member  manufacturers  and its
estimates with respect to non-member  manufacturers.  The Company  believes RVIA
members produce 85% - 90% of conversion vehicles sold in the United States.

The domestic  vehicle  conversion  industry has declined  steadily over the last
several  years with a  stabilization  in 1999.  The  Company  believes  that the
increased  popularity  of sport  utility  vehicles and factory  minivans,  price
pressure from higher chassis costs,  lower levels of conversion  inventory being
held on dealer lots and fewer  automotive  dealers selling  conversion  products
have adversely impacted the market. The Company believes that the changing level
of dealer  support is due to the  growing  availability  of  additional  vehicle
models  to stock on dealer  retail  lots such as sport  utility  vehicles  and a
general concern by dealers about the future of the conversion van industry.

The  United  States  conversion  vehicle  market is very  competitive  with four
principal national manufacturers and numerous local and regional  manufacturers,
many of which are relatively small companies serving local dealers.  The Company
estimates it has  approximately  54  competitors in the Conversion Van business.
The Company  believes it is one of the four largest van conversion  companies in
the United States.  The others are Glaval Inc.,  Mark III  Industries,  Inc. and
Explorer  Van  Company.  The Company  believes  the number of  competitors  will
decline as increased quality, financial and engineering standards are imposed by
the OEMs.

The Company is the leading  exporter of Conversion  Vans. Of the Company's  1999
export  sales of $8.1  million,  44% and 49% of export  sales were to Europe and
Japan, respectively. The Company utilizes various distributors throughout Europe
and one distributor in Japan to sell its products. In international markets, the
Company  competes  with numerous  foreign  manufacturers  that produce  vehicles
comparable to converted  vans,  although  Conversion  Vans such as the Company's
tend not to be widely produced within its foreign markets.

The increase in the U.S. dollar  currency rate has put  significant  pressure on
the Company's  export sales.  In addition,  the continuing  turmoil in the Asian
financial  markets and  economies  have  negatively  impacted the demand for the
Company's  products.  The Company  continues  to  redesign  products to maintain
unique products in the marketplace and increase value for price to keep products
competitive  internationally.  In addition, the Company is targeting several new
international markets to develop, including South America.

The Company will continue to focus on core van conversion  products and, through
aggressive marketing and promotion, will seek to expand U.S. sales of conversion
vans.  While Starcraft  product lines will continue to emphasize  upscale custom
van  conversions,  Imperial will continue a  complementary  emphasis on mid- and
low-price  point  conversion  packages.  The  Company  will  continue to seek to
further  differentiate  its Starcraft  lines from its competition by emphasizing
total value and quality  versus unit price.  By offering  both the Starcraft and
Imperial  product lines, the Company is able to offer dealers a full price range
of  conversion  vehicles  from a  single  manufacturer.  In  1997,  the  Company
established a  telemarketing  division which has effectively  penetrated  larger
territories and targeted new dealers.

The Company will continue to focus on innovative product  development to enhance
customer  appeal and vehicle  quality and safety.  The Company will  continue to
seek to differentiate  itself from its competition by virtue of the resources it
devotes to training dealer personnel in selling, product knowledge,  service and
compliance.  Starcraft  utilizes  a  specially  equipped  service  van,  videos,
manuals,  other  visual  aids,  as well as  classroom  instruction  at its  main
facility and at dealer locations throughout the country. The Company maintains a
strong customer service area which includes warranty claims and approval,  parts
ordering and processing and customer information.  The Company maintains records
of Starcraft units sold as far back as 1978 and Imperial  maintains records back
to  1991,  which  was  the  inception  of  the  predecessor  company,   Imperial
Industries, Inc.

Although the Company's  conversions of sport utility  vehicles and pickup trucks
have proven to be a popular line of products,  the  significant  increase in the
number of models and the chassis  availability  of these  products at automobile
dealerships  have reduced the demand for conversions of these products.  Many of
the OEM sport utility models now have options that were historically supplied by
the conversion industry.  As a result, the Company believes its overall sales of
sport utility vehicles and pickup truck conversions will continue,  but not have
significant  growth.  The Company will focus on select  models and OEMs where it
feels it can continue to offer a unique product at a competitive price point.

The Company historically provided a three-year,  36,000 mile limited warranty on
its conversions. In 1997, the Starcraft products began offering a 5-year, 60,000
mile warranty on certain of its Starcraft  products.  The OEMs provide their own
standard  warranties  of the  chassis  and  engine.  At the  time of sale of its


                                    5 of 22
<PAGE>

product,  the Company estimates the costs to be incurred for product  warranties
and establishes  reserves for warranty  claims.  The Company  believes that such
reserves will adequately  cover any such warranty  claims.  The Company provides
complete owners' manuals to retail customers  covering the conversion package as
well as parts,  warranty and service  manuals for dealers.  The Company  keeps a
record of the paint,  upholstery and styles included in each vehicle  conversion
so that, when necessary, it can re-create matching replacement parts.

At October 3, 1999, the Company had a backlog of 396 unit orders compared with a
backlog of 441 unit orders at September 27, 1998. The backlog declined  slightly
from  prior  year  levels due to timing of  certain  international  orders.  The
Company  considers  such  orders to be  reasonably  firm.  All of the  Company's
products are subject to certain  seasonal sales  influences and sales tend to be
stronger during March through July. The Company uses off-season sales promotions
to market its products with a view to reducing seasonal swings in sales.

The conversion industry is cyclical and is affected by the general trends of the
economy and  consumer  preferences  and  consumer  confidence  and trends of the
automotive and recreational  vehicle industries.  Consumer preferences for sport
utility  vehicles in recent years has adversely  affected  demand for conversion
products.  The level of disposable  consumer  income affects the Company's sales
because its products are  generally  considered  discretionary  expenditures  by
consumers.  In difficult  economic times,  consumers tend to spend less of their
income on discretionary  items.  Other economic factors affecting the demand for
the Company's products include the availability and price of gasoline, the level
of interest rates and the availability of consumer  financing.  Reduced gasoline
availability  could adversely  affect the demand for the Company's  products.  A
significant  increase  in the price of  gasoline  could  reduce  demand  for the
Company's  products  because  it  would  increase  the cost of  operating  these
products.  Because many consumers finance their purchase of vehicle conversions,
the  availability  of  financing  and  level  of  interest  rates  can  affect a
consumer's  purchasing  decision.  A decline in general  economic  conditions or
consumer  confidence can be expected to affect Starcraft's sales adversely.  The
Company  is  dependent  upon the OEMs to supply  its  requirements  for  vehicle
chassis.  Labor stoppages,  supply shortages and a variety of other factors that
influence  OEM  production  can affect the  availability  or timely  delivery of
vehicle chassis to the Company.

Vehicles For The Mobility Impaired

In 1997, the Company purchased National Mobility  Corporation which modifies OEM
chassis so that they may be accessed by the mobility impaired.  Primary products
are low-floor  minivans with ramps and fullsize vans with  wheelchair  lifts. In
1999, 6.1% of the Company's  conversion vehicle products sales were attributable
to this product line.

Currently,  National  Mobility  primarily sells its products to government units
(state and local) and commercial  enterprises  such as taxi cab and  paratransit
companies.

The Company believes the mobility  impaired vehicle market is a growing segment.
By utilizing the Company's  Conversion Van reputation and distribution  systems,
the Company believes it can more effectively penetrate the retail market.

Commercial Buses

In 1998 the Company began manufacturing  shuttle buses ranging in length from 20
to 28 feet with seating capacity for 14 to 29 passengers. Buses are offered with
a choice of interior and exterior storage areas,  wheel-chair lifts,  diesel and
gasoline engines, and various seat types,  arrangements and coverings. The buses
are  marketed  under the  Starcraft  trade name and are  primarily  marketed  to
churches,  nursing homes and hotel resorts  through  independent  commercial bus
dealers.

The market for the  Company's  shuttle  buses is highly  competitive.  The other
competitors in the bus industry are substantially  larger than the Company.  The
Company's  products are a very small  percentage of the bus market.  The Company
will  continue to position  its product as an  exceptional  quality,  high value
product targeting the high end user niche market. There can be no assurance that
the Company will be able to maintain or improve its competitive  position in the
bus market.



                                    6 of 22
<PAGE>

Chassis and Other Suppliers

Approximately  47%, 24% and 29% of the  Company's  domestic  Conversion  Vehicle
units in 1999 were  manufactured  on  General  Motors,  Dodge  and Ford  ("OEM")
chassis,   respectively.  All  of  the  Company's  export  sales  are  currently
associated with General Motors product.

The OEMs  supply  incomplete  chassis to  Starcraft  or other  manufacturers  or
dealers for restricted use. The Company obtains substantially all of its chassis
acquired for domestic sale from the OEMs pursuant to  consignment  or restricted
sale contracts. Under these contracts each OEM maintains strict control over the
disposition of chassis delivered to the Company for modification and the Company
is prohibited  from  delivering a converted  chassis  provided by the OEM to any
person  except  an  authorized  dealer  for  that  OEM.  All  of  the  Company's
consignment and restricted sale contracts with chassis  suppliers are terminable
by either party on short notice without cause.

Under  restricted  sale contracts with the OEMs, the OEM retains the certificate
of origin and the  Company  has no right to obtain it or any other  evidence  of
title.  These  contracts  state that  vehicle  title  technically  passes to the
Company upon  acceptance of a chassis and the Company pays state  property taxes
on chassis, but the Company can only sell the chassis back to the OEM for resale
to an  authorized  dealer.  Except for  demonstration  vehicles,  the Company is
prohibited from making  modifications  to chassis under these contracts until it
matches them with a dealer order. In the past, the Company has obtained  waivers
of this  limitation  to permit  accumulation  of GMC or  Chevrolet  inventory in
connection  with model year changes or other periods of  anticipated  increasing
demand.  Prior to matching a chassis to a dealer order, the Company finances the
chassis  through  the OEM's  financing  affiliates  at nominal  rates.  Once the
Company  notifies the OEM that it has matched a chassis  with a dealer,  the OEM
"repurchases"  the  chassis,  crediting  the  Company's  account  with the OEM's
financing  affiliate and invoicing its dealer (the  Company's  customer) for the
price of the  chassis.  Upon  receiving  the  converted  vehicle,  the dealer is
obligated to pay the Company for the  improvements  the Company has made. If the
Company fails to match a chassis with a dealer order within 90 days, the finance
charge  the  Company  must pay  increases.  The past  90-day  finance  charge is
currently the prime rate plus 1%.

Historically,  the Company's international  conversion sales have been primarily
manufactured on General Motors chassis.  Generally,  the foreign purchaser is an
authorized dealer for General Motors and Starcraft.  The dealer submits an order
to General Motors' overseas sales affiliate (the "GM Export  Affiliate") for the
chassis together with specifications for a Starcraft  conversion.  The GM Export
Affiliate purchases the chassis from General Motors and forwards it to Starcraft
for second stage  manufacturing.  Starcraft invoices the GM Export Affiliate for
the completed  conversion,  and the GM Export Affiliate arranges for shipment of
the unit, at the GM Export  Affiliate's  expense,  from Starcraft to the foreign
dealer.

Starting in 1997,  General  Motors  changed its chassis system for the Company's
sales to Europe. Under this program, the Company is the "Manufacturer of Record"
for units imported into Europe and is required to arrange and be responsible for
all U.S. export and shipping  requirements.  The Company is required to purchase
its chassis and the OEM assists in the financing of such purchases.  The Company
continues to sell only to authorized General Motors dealers.

A variety of factors  govern  chassis  ordering  and  availability.  Chassis are
ordered  from the OEM based on the  Company's  annual  sales  plan.  The plan is
broken down by OEM and vehicle model.  Vehicle  specifications are determined on
the basis of  historical  trend  analysis and analysis of the backlog of orders.
The  Company's  chassis  order  forecast  is shared  with each OEM to  determine
chassis  availability.  The OEMs confirm chassis  availability  and timing on an
annual basis.  After confirmation by the OEM, the Company orders a 90-day supply
prioritized  through a  central  computerized  system.  On a weekly  basis,  the
Company  releases the actual orders it requires and the OEMs  schedule  delivery
dates for the orders.  Chassis  allocation to the Company from the OEMs is based
on credit lines, prior usage and wholesale and retail sales rates.


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<PAGE>



The following  table sets forth for the periods  indicated the number of chassis
received by the Company under its restricted  sales contracts with the OEM's and
the dollar  value  thereof,  and, as of the end of such  periods,  the number of
chassis held over 90 days and the dollar value thereof.

<TABLE>
<CAPTION>
                                                         Year Ended
                                                     (Dollars in thousands)
                                        Oct. 3, 1999    Sept. 27, 1998   Sept. 28, 1997
---------------------------------------------------------------------------------------
<S>                                          <C>               <C>              <C>
Chassis Received                             7,060             7,132            10,687
Value of Chassis Received                 $141,200          $142,640          $213,740
Chassis Over 90 Days at period end              97               148               433
Value of Chassis Held Over 90 Days        $  1,940          $  2,960          $  8,660
</TABLE>



The conversion  process begins after a chassis is inspected and accepted and the
Company  has  received a  confirmed  order  from an  authorized  dealer  that is
compatible  with the chassis.  Generally,  the order is scheduled for production
typically  four to five days before work on the vehicle  commences  to allow for
completion  of  components  to be  installed  in the chassis and the purchase of
necessary assembly material.  The Company completes the conversion process in an
average of seven to eight days from the date that the vehicle is first scheduled
for production.

The Company is dependent  upon the OEMs to supply its  requirements  for vehicle
chassis.  Labor stoppages,  supply shortages and a variety of other factors that
influence  OEM  production  can affect the  availability  or timely  delivery of
vehicle  chassis to the Company.  In 1998  chassis  availability  was  adversely
impacted late in the fiscal year due to a labor stoppage at General Motors.  The
Company  estimates  that sales were  adversely  impacted by $1.5  million due to
chassis shortages in 1998. Chassis availability was generally good in 1999.

If vehicle  chassis  are  unavailable,  or if the Company  must accept  delivery
earlier  or later than it  otherwise  would  prefer,  sales  could be  adversely
affected and financing  expenses  could  increase.  The Company must also comply
with its  consignment  and  restricted  sale contracts with the OEMs pursuant to
which  the  OEMs  impose  certain   specifications  for  the  Company's  vehicle
conversions,  including  gross vehicle  weight  standards.  Such  contracts also
restrict the Company's  ability to dispose of completed chassis and prohibit the
transfer  of  chassis to  unauthorized  U.S.  and  foreign  dealers.  All of the
Company's  consignment and restricted sale contracts with chassis  suppliers are
terminable by either party on short notice without cause.  The  availability  of
the OEM financing rates is dependent upon the Company's  compliance with its OEM
contracts and its ability to maintain satisfactory credit relationships with the
OEM's finance subsidiaries. Adverse changes in the Company's financial condition
or results of  operations  could cause such  financing  subsidiaries  to seek to
adversely  change the Company's  financing  terms or to terminate such financing
arrangements.  Such a change or termination could have a material adverse effect
on the Company's financial condition and results of operations.

Vehicle  converters  can be  penalized by the OEM for  manufacturing  overweight
vehicles and the National Highway Traffic Safety Administration  ("NHTSA") could
require  overweight  vehicles to be recalled.  See "Safety and Regulation." Such
standards  are imposed by the OEMs in part to help assure  that  vehicle  weight
does not exceed the capacity of the OEM's braking system.

The export of  completed  vehicles to  unauthorized  foreign  dealers has been a
significant issue in the conversion  industry in recent years. In the past, some
automotive dealers have sold vehicles to brokers who, in turn, have sold them to
unauthorized dealers overseas.  The OEM financing subsidiaries have indicated an
intention to penalize or terminate  financing  arrangements with any firm deemed
responsible  for  unauthorized  exports.  The Company  makes an effort to assure
itself  that  none  of its  vehicles  are  exported  in an  unauthorized  manner
including obtaining written assurances from certain dealers.  The Company has no
control over the eventual disposition of its vehicles by dealers, however, so it
cannot  eliminate  the  possibility  of  unauthorized   export.




                                    8 of 22
<PAGE>

These  efforts  nevertheless  should help  assure  that the Company  will not be
deemed responsible for any unauthorized export.

The shuttle bus operation utilizes bailment or consignment arrangements with the
OEM's,  but must purchase the chassis prior to the start of  manufacturing.  The
shuttle  bus   operation  is  subject  to  the  same  risk  factors  of  chassis
availability as the Company's vehicle conversion business.

Supplies for the  components  and materials the Company  utilizes in its vehicle
conversions are generally available from several sources.  From time to time the
Company  experiences  delays in delivery of certain components or materials from
suppliers.  In 1998, the availability of certain hardwood  components  adversely
impacted the Company's production.

Manufacturing

All Conversion Vehicle products are manufactured in the Goshen, Indiana plant.

Primary components of the vehicle are purchased from outside  suppliers,  except
seats which are  assembled in the Goshen  facility.  The principal raw materials
used in the  manufacturing  process are  fabric,  fiberglass,  steel,  aluminum,
plywood and  plastic.  The  Company's  products are  generally  produced to firm
orders and are designed and engineered by the company.

As the Van Conversion  market declined over the last several years,  the Company
consolidated its existing manufacturing facilities.

In November 1999, the Company relocated its Emma seating manufacturing operation
into the Goshen facility.

In June 1997 the Company closed its McGregor,  Texas manufacturing  facility and
sold  certain  assets of the  business.  The  Company  recorded a  $260,000  net
restructure  charge in the  third  quarter  of fiscal  year  1997.  The  Company
realized  savings from the closure of the Texas facility which lost $1.3 million
pretax in 1997. The consolidation  efforts were a result of the Company's belief
that the  conversion  industry  will  remain at  current  lower  levels  and the
elimination  of  excess  production   capacity  was  critical  to  returning  to
profitability. In December 1996 the Company consolidated its Imperial Automotive
Group manufacturing  operation into Starcraft  Automotive Group's  manufacturing
complex in Goshen,  Indiana.  The  consolidation  was designed to reduce  excess
production  capacity,  personnel count and fixed overhead expenses.  The Company
recorded a $750,000 restructure charge in the first quarter of fiscal year 1997.
All  restructuring  charges  were  utilized in 1998 and 1997.  No  restructuring
charges were  reversed  into income.  The Company  estimates it realized  annual
overhead expense  reductions of approximately $1.0 million from reduced facility
and personnel costs during 1998 relative to 1997.

Patents and Trademarks

IBS. In 1996,  the Company  received a U.S.  patent on IBS, which is designed to
reduce  significantly  the risk of seat back collapse in the event of a rear-end
collision  by  restraining  the seat back. A new seat belt  integrated  with the
conventional  seat  belt  system is  anchored  to the  vehicle  roof or wall and
traverses the seat back. In the event of collision,  the seat back is secured in
place.

Trademarks.  The Company's Predecessor manufactured boats, motor homes and other
recreational  vehicles  under  the  name  "Starcraft."  The  boat  manufacturing
business  was sold by the  Predecessor  to Brunswick  Corporation  in 1988 which
subsequently sold the business.  The Company initially acquired the recreational
vehicle  business  in the  Predecessor's  1991  reorganization  proceeding,  but
immediately  sold it to an RV company.  The  Predecessor's  Canadian  conversion
business was acquired by a Canadian firm. A corporation in the boating  industry
has independently registered and owns the "Starcraft" and related trademarks for
use with boats and marine  products and thus the Company has no control over the
quality of boats  produced  and sold under the  "Starcraft"  mark.  The  Company
retains  ownership  of  "Starcraft"  and related  registered  marks for use with
automotive  and  recreational  vehicle  products.  It licenses the owners of the
Predecessor's  RV business  and Canadian  van  conversion  business to use these
trademarks.  While  it has  some  control  over the  quality  of its  licensees'
products,  it does not  control all aspects of their  businesses.  The  Canadian
entity  is  required  to pay a  royalty  to the  Company  and  to  purchase  its
components  from the Company (or from others with the Company's  approval).  The
Company is not permitted to export to Canada and its Canadian  licensee does not
export to the United States.



                                    9 of 22
<PAGE>

OEM AUTOMOTIVE SUPPLY

In 1998,  the  Company  started a new  operation  with a partner  (the "LLC") to
supply conversion vehicle type products directly to OEM automotive  customers as
a Tier 1 automotive supplier.  The Company currently owns 50% of this enterprise
and controls the operation. All of the LLC's OEM automotive supply sales in 1999
were to one OEM.

Manufacturing  facilities have been established in Louisiana and Texas which are
located near OEM assembly plants.  The LLC also has an engineering  operation in
Detroit.

The LLC receives  vehicle chassis from the OEM and add certain  appearance items
such as ground  effects,  wheels and badging.  The vehicles are placed back into
the normal OEM distribution stream. The vehicles carry the full OEM warranty and
are marketed directly by the OEM.

The LLC engineers and validates the products to OEM  standards.  Programs  range
from two to four year and are backed by contractual agreements.

The  major  domestic  market  for the LLC's  products  are  highly  competitive.
Competition is based primarily on price,  product  engineering and  performance,
technology,  quality and overall customer service,  with the relative importance
of such factors varying among products.  The LLC's global competitors  include a
large number of other  well-established  independent  manufacturers.  Although a
number of companies  of varying size compete with the LLC, no single  competitor
is in substantial competition with the LLC.

All components for the vehicles are purchased.  The primary raw material used in
the components is plastic which the Company  believes is readily  available from
several sources.

Chassis are provided by the OEM on a  consignment  basis and are not included in
the sales of the Company.

The LLC provides a limited warranty of its products to the OEM. The LLC warranty
is substantially the same as the OEM warranty provided to its retail customers.

At October 3, 1999,  the LLC's backlog of firm orders was $5.7 million.  The LLC
utilizes  an  independent  manufacturer  representative  to market  and sell its
services.

SAFETY AND REGULATION

The manufacture,  distribution and sale of the Company's products are subject to
governmental  regulations  in the United States at the federal,  state and local
levels.  The most  extensive  regulations  are  promulgated  under the  National
Traffic and Motor Vehicle  Safety Act which,  among other  things,  empowers the
National Traffic and Motor Vehicle Safety Administration  ("NHTSA") to require a
manufacturer to remedy  vehicles  containing  "defects  related to motor vehicle
safety"  or  vehicles  which fail to conform  to all  applicable  federal  motor
vehicle safety standards.

Federal Motor Vehicle Safety Standards are promulgated by the NHTSA. Many of the
Company's  conversion  components  were affected by these  standards.  Starcraft
engaged a testing  company,  which also performs  testing for NHTSA, to test the
company's components. The Company's components subject to the new standards were
determined to meet or exceed them.  Promulgation of additional  safety standards
in the  future  could  require  the  Company  to incur  additional  testing  and
engineering  expenses  which could  adversely  affect the  Company's  results of
operations.  NHTSA can require automotive  manufacturers to recall products. The
Company has not experienced any material recalls.

The  Company's  international  sales are  subject to foreign  tariffs and taxes,
changes  in which are  difficult  to  predict  and which  can  adversely  affect
Starcraft sales.  Starcraft's  products must also comply with government  safety
standards imposed in its foreign markets.



                                    10 of 22
<PAGE>

Both federal and state authorities have various  environmental control standards
relating  to air,  water  and noise  pollution  that  affect  the  business  and
operations of the Company. In particular,  the Company generates paint,  varnish
and other finishing  wastes that it is required to dispose of in compliance with
environmental  regulations.  The Company  believes  that it has  complied in all
material  respects with applicable  environmental  regulations and standards and
does not currently  expect that any failure of compliance will have any material
adverse effect on the Company.

Like other automotive  manufacturers,  the Company may be subject to claims that
its  products  caused or  contributed  to damage or injury  sustained in vehicle
accidents or may be required to recall products  deemed unsafe.  Any such claims
in excess  of the  Company's  insurance  coverage  or  material  product  recall
expenses could adversely affect the Company's financial condition and results of
operations.

EMPLOYEES

As of October 3, 1999,  the  Company  employed  597 people.  Of these,  458 were
production  line  associates  and  139  were  salaried  sales,  engineering  and
administrative  staff. During peak production periods,  the Company may increase
its work force.  Historically,  the  available  labor force has been adequate to
meet such periodic  requirements.  The Company considers its relationships  with
its personnel to be satisfactory.


                                    11 of 22
<PAGE>


ITEM 2.  PROPERTIES

The following table summarizes the Company's properties as of October 3, 1999:

<TABLE>
<CAPTION>
                        Size of          Owned
Location                Facility       or Leased        Type of Operation
-------------------------------------------------------------------------------------
<S>                     <C>              <C>          <C>
Goshen, Indiana         454,400 s.f.      Owned       Executive Offices (20,420
                                                      s.f.);   Manufacturing and
                                                      Assembly, Conversion Vehicle
                                                      Segment

Goshen, Indiana          10,000 s.f.      Owned       Chassis Storage (40 acres),
                                                      Conversion Vehicle Segment

Emma, Indiana            42,700 s.f.      Owned       Sewing and Upholstery
                                                      Manufacturing

Elkhart, Indiana         56,000 s.f.      Leased      Offices (2,600 s.f.);
(National Mobility)                                   Manufacturing and   Assembly,
                                                      Conversion   Vehicle Segment

                                                      Manufacturing and   Assembly,
Shreveport, Louisiana    38,000 s.f.      Leased      OEM   Automotive Supply Segment

                                                      Manufacturing and   Assembly,
Grand Prairie, Texas    100,000 s.f.      Leased      OEM   Automotive Supply Segment

</TABLE>


The Goshen and Emma production  facilities were constructed in the 1960's.  They
have been  maintained  and improved  upon from time to time and are presently in
satisfactory condition and sufficient for the Company's current requirements.

The Emma and Elkhart facilities are no longer being utilized by the Company. The
Company is  currently  attempting  to sell the Emma  facility.  The lease on the
Elkhart  facility  expires  in  February  2000 with a monthly  rental  amount of
$14,000.

The  Shreveport  and Grand Prairie leases have terms that parallel the length of
the vehicle contracts at the respective plants.

ITEM 3.  LEGAL PROCEEDINGS

The Company does not anticipate that any pending legal proceeding to which it is
party will have any  material  adverse  effect on its  financial  conditions  or
results of operations.  The Company maintains product liability  insurance which
it currently considers adequate.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                    12 of 22
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common Stock is quoted on the NASDAQ Small Cap Market, under the symbol "STCRC."
As of December 22, 1999,  there were 75  shareholders  of record of  Starcraft's
Common Stock.

On June 23, 1999, the Company was placed on a conditional listing for the Nasdaq
Small Cap Market as it continued to work to meet the Market's net tangible asset
requirements.  The terms of the conditional listing establish dates by which the
Company must achieve certain tangible asset or profitability levels and by which
reports  establishing  compliance  with the exception must be provided to Nasdaq
and filed with the SEC. The first such report was provided to Nasdaq by July 21,
1999 and the latest report on November 15, 1999.  The  conditional  listing will
expire on December  31,  1999.  The Company  meets the terms of the  conditional
listing as of the date of this report.  If the Company meets the Nasdaq  listing
requirements,  it will continue to be listed on the Nasdaq Small Cap Market. The
Company expects that it will meet these conditions.

The  following  table  sets forth the high and low  closing  prices per share of
Common Stock for the quarters ended as quoted in the NASDAQ Stock Market Report.

            Quarter Ended
                                        High          Low
            December 28, 1997        $  3.000       $ 2.000
            March 29, 1998              2.750         1.750
            June 28, 1998               2.875         2.125
            September 27, 1998          2.313         1.000

            December 27, 1998           2.625         1.250
            March 28, 1999              4.000         2.438
            June 27, 1999               4.500         2.875

            October 3, 1999             6.250         3.875

Dividend Policy. The Company has paid no cash dividends since its initial public
offering.  The  Company  currently  intends  to retain  earnings  for use in the
operation and expansion of its business and therefore does not anticipate paying
cash  dividends  on Common  Stock in the  foreseeable  future.  The  payment  of
dividends  is  within  the  discretion  of the  Board of  Directors  and will be
dependent,  among  other  things,  upon  earnings,  capital  requirements,   any
financing agreement covenants and the financial condition of the Company.

Stock Repurchase.  In March 1995, the Company's Board of Directors  approved the
repurchase of up to 500,000 shares of the Company's outstanding shares of common
stock,  of which  153,000  shares  were  acquired  in 1996.  No shares have been
repurchased since.

Anti-Takeover   Provisions.   Indiana   law  and  the   Company's   Articles  of
Incorporation  and  Code  of  By-laws  contain   provisions  that  restrict  the
acquisition of control of the Company.  Such provisions can affect the rights of
shareholders  acquiring  substantial  interests  in the  Company's  shares.  For
example,  a  shareholder  who  acquires  more than 10% of the  Company's  shares
without  prior  board  approval  will be  limited in the timing and terms of any
transaction  it may enter into with the  Company  and will be subject to related
provisions.  Any  shareholder  who  effects  an  acquisition  after  which  such
shareholder holds more than 20% of the Company's outstanding shares will have no
voting rights in the shares acquired in such acquisition, unless such rights are
conferred  by the  disinterested  shareholders  at the next  annual  meeting (or
earlier special meeting).




                                    13 of 22
<PAGE>

SHAREHOLDER RIGHTS PLAN

In August 1997 the Company adopted a shareholders  Rights Plan issuing one right
for each  outstanding  share.  Each  right  entitles  the  registered  holder to
purchase from the Company one share of common stock at $15 per share, subject to
adjustment.  The rights  become  exercisable  if a person or group  (other  than
certain  related  persons)  acquires or announces a tender offer for  prescribed
percentages  of the Company's  shares or is declared an "adverse  person" by the
Company's  Board of Directors.  In these events,  each right holder may purchase
shares  with a value  equal to twice the  exercise  price.  Furthermore,  if the
Company  engages in certain  mergers or similar  business  combinations  a right
holder may purchase  shares of the  acquiring  company with a value of two times
the purchase price of the right. The rights expire on August 12, 2007.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

(dollars in thousand, except per share data)              Year Ended
-----------------------------------------------------------------------------------------------
Income Statement Data            Oct. 3,     Sept. 27,     Sept. 28,     Sept. 29,      Oct. 1,
                                  1999         1998          1997          1996          1995
-----------------------------------------------------------------------------------------------
<S>                            <C>           <C>           <C>           <C>           <C>
Net Sales:
     Domestic                  $  81,397     $  42,857     $  57,235     $  73,317     $  91,652
     Export                        8,107        10,235        15,047        25,648        21,408
         Total Net Sales          89,504        53,092        72,282        98,965       113,060
Cost of Goods Sold                74,548        49,590        66,342        83,669        92,692
Gross Profit                      14,956         3,502         5,940        15,296        20,368
Operating Expenses                10,922         9,548        13,924        15,049        15,864
Restructuring and Goodwill
   Impairment Charges                 --            --         5,926            --            --
Operating Income (loss)            4,034        (6,046)      (13,910)          247         4,504
Interest Expense                  (1,230)         (892)         (400)         (293)         (208)
Other Income, Net                    115           100           194           176           214

Income (loss) Before               2,919        (6,838)      (14,116)          130         4,510
Minority Interest and Taxes

Minority Interest                 (2,448)           --            --            --            --

Income Taxes (expense) Credit         51            79         2,814           (20)       (1,753)

Net Income (Loss)                    522        (6,759)      (11,302)          110         2,757

Weighted Average Common            4,159         4,134         4,127         4,142         4,261
Shares  Outstanding

Earnings (loss) Per Share      $    0.13     $   (1.63)    $   (2.74)    $    0.03     $    0.65

Earnings (loss) Per Share           0.12         (1.63)        (2.74)         0.03          0.65
      Assuming Dilution

Balance Sheet Data
------------------------------------------------------------------------------------------------
Working Capital                $  10,192     $   5,402     $   7,011     $   8,476     $   8,693
Total Assets                      43,781        29,015        27,779        36,524        34,213
Long-term Debt                    13,506        10,777         5,696             0           323
Shareholders' Equity               4,186         3,536        10,295        21,552        21,688
Book Value per Share                1.00          0.86          2.49          5.23          5.20
</TABLE>


                                    14 of 22
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS.

The consolidated  statements of income summarize  operating results for the last
three years. This section of Management's Discussion highlights the main factors
affecting the changes in operating results during the three-year period.

1999 VERSUS 1998
<TABLE>
<CAPTION>

(Dollars in Thousands)                                                                 1998 to
                                                                                        1999
                                                 1999                  1998            Change
                                       ------------------------------------------------------
<S>                                    <C>         <C>         <C>          <C>         <C>
Net Sales                              $ 89,504    100.0%      $ 53,092     100.0%      68.6%
Cost of goods sold                       74,548     83.3%        49,590      93.4%      50.3%
                                       --------    -----       --------     -----      -----
Gross profit                             14,956     16.7%         3,502       6.6%     327.1%
Selling and promotion expenses            4,638      5.2%         4,484       8.4%       3.4%
General and administrative expenses       6,284      7.0%         5,064       9.6%      24.1%
                                       --------    -----       --------     -----      -----
Operating income (loss)                   4,034      4.5%        (6,046)    (11.4%)     --
Interest expense                         (1,230)    (1.3%)         (892)     (1.7%)     37.9%
Other income                                115      0.1%           100       0.2%      15.0%
                                       --------    -----       --------     -----      -----
Income (loss) before taxes
     and minority interest                2,919      3.3%        (6,838)    (12.9%)     --
Minority interest                        (2,448)    (2.7%)           --      --         --
Income tax credit                            51      0.0%            79      (0.2%)    (35.4%)
                                       --------    -----       --------     -----      -----


NET INCOME (LOSS)                      $    522      0.6%      ($ 6,759)    (12.7%)     --
                                       ========    =====       ========     =====      =====
</TABLE>


The OEM  Automotive  Supply  segment  accounted  for $32.7  million of the $36.4
million sales growth in 1999. OEM Automotive Supply benefitted from the start-up
of a second  plant as a  result  of a new  customer  contract  and a full  years
production  from a prior year plant start-up.  Conversion  Vehicle segment sales
increased $3.7 million primarily from growth in commercial bus product sales.

The incremental OEM Automotive  Supply sales generated $8.2 of additional  gross
profit in 1999.  The  Conversion  Vehicle  segment  improved  its  gross  margin
primarily  due to reduced  labor and overhead  costs from plant  consolidations.
General and administrative expenses increased $1.6 million in the OEM Automotive
Supply segment in order to support the growth in this business, partially offset
by a  $400,000  decrease  in  the  Conversion  Vehicle  segment  from  personnel
reductions.

Interest expense from the OEM Automotive Supply segment  increased  $153,000 due
to higher  borrowing  levels to fund the segment's  growth.  Conversion  Vehicle
segment interest  expense  increased due to higher interest rates and a slightly
higher  average  borrowing  level.  Minority  interest in 1999  results from the
Company owning only 50% of the OEM Automotive  Supply segment.  The Company does
not have income tax expense in 1999 due to existing  tax credit  carry  forwards
generated from prior year losses.  The income tax credit recorded in 1999 is due
to deferred  tax  changes.  The minimal  income tax credit in 1998 is due to the
Company's tax carry-back being fully utilized.



                                    15 of 22
<PAGE>


1998 VERSUS 1997
<TABLE>
<CAPTION>


(Dollars in Thousands)                                                                  1997 to
                                                                                         1998
                                               1998                     1997             Change
                                       ---------------------------------------------------------
<S>                                    <C>         <C>         <C>          <C>          <C>
Net Sales                              $ 53,092    100.0%      $ 72,282     100.0%       (26.5%)
Cost of goods sold                       49,590     93.4%        66,342      91.8%       (25.3%)
                                       --------    -----       --------     -----        -----
Gross profit                              3,502      6.6%         5,940       8.2%       (41.0%)
Selling and promotion expenses            4,484      8.4%         7,243      10.0%       (38.1%)
General and administrative expenses       5,064      9.6%         6,681       9.2%       (24.2%)
Restructuring charges                         0      0.0%         1,010       1.4%        --
Goodwill impairment loss                      0      0.0%         4,916       6.8%        --
                                       --------    -----       --------     -----        -----

Operating loss                           (6,046)   (11.4%)      (13,910)    (19.2%)      (56.5%)
Interest expense                           (892)    (1.7%)         (400)     (0.6%)      123.0%

Other income                                100      0.2%           194       0.3%       (48.5%)
                                       --------    -----       --------     -----        -----

Loss before taxes                        (6,838)   (12.9%)      (14,116)    (19.5%)      (51.6%)
Income tax credit                            79      0.2%         2,814       3.9%       (97.2%)
                                       --------    -----       --------     -----        -----
NET LOSS                               ($ 6,759)   (12.7%)     ($11,302)    (15.6%)      (40.2%)
                                       ========    =====       ========     =====        =====
</TABLE>


Net Sales for 1998 decreased  26.5% to $53.1 million from $72.3 million in 1997.
Vehicle  conversion  sales  declined  27.2%,  comprised  of a 28.2%  decline  in
domestic  and 32.0%  decline in  export.  The  start-up  of the  commercial  bus
business  generated $1.2 million in sales in 1998. The Company's  domestic sales
declined  consistent with the decline in the overall  conversion market of 23.7%
as reported by the Recreational Vehicle Industry Association.  In addition,  the
Company's sales were adversely  impacted by production  constraints in the third
quarter from shortages of key raw material parts, primarily hardwood components.
The Company estimates that the production issues negatively  impacted the year's
sales by approximately $7 million.  Export sales declined due to price pressures
from the stronger  U.S.  dollar and reduced  demand in Japan and Korea caused by
the economic turmoil in Asia.

Gross  profit  margin for 1998 was 6.6% of sales  compared to 8.2% in 1997.  The
decrease in gross margin as a percent of sales is primarily  attributable to the
impact of fixed  plant  overhead  costs on the lower sales  volume.  Selling and
promotion  expense for 1998 decreased 38.1% to $4.5 million primarily due to the
lower domestic sales volume.  The decrease in selling and promotion expense as a
percentage  of  sales  in 1998 is due to cost  reductions  from  fixed  salesmen
salaries and the elimination of the Texas operation.  General and administrative
expense in 1998 was $5.1 million,  a 24.2%  decrease from 1997.  The decrease is
primarily attributable to reductions in personnel,  partially offset by $487,000
of start-up expense from the OEM automotive supply segment.

In  December  1996  the  Company  consolidated  its  Imperial  Automotive  Group
manufacturing  operation and its Texas  manufacturing  facility  into  Starcraft
Automotive  Group's  manufacturing  complex  in  Goshen,  Indiana.  The  Company
recorded a $1.0 million  restructure charge in fiscal 1997.  Operating losses at
Imperial,  together with a strategic review of the conversion industry, resulted
in an  evaluation  of the  goodwill  related  to  the  acquisition  of  Imperial
Industries,  Inc.  In 1997.  As a result of the change in the  domestic  market,
abandonment of the original  strategic  operating plan for Imperial,  cumulative
operating  losses and  continued  weakness in the  domestic  vehicle  conversion
market, an impairment loss of $4.9 million was recorded in 1997 to write-off the
remaining goodwill associated with this acquisition.

The Company  recorded a minimal  income tax credit in 1998 as the tax carry-back
is fully utilized.  The 1997 income tax credit was recorded at a 19.9% effective
rate  primarily  due to the impact of a $2.5  million  valuation  allowance  for
deferred income taxes.

SEASONALITY AND TRENDS

The Company's  sales and profits are dependent on the automotive  markets in the
United States and overseas,  primarily Japan and northern Europe,  and the OEM's
ability to supply  vehicle  chassis.  The  business  tends to be  seasonal  with
stronger  sales in March  through July and is  influenced by a number of factors
including  atypical weather for any sales region and OEM programs  affecting the
price, supply and delivery of vehicle chassis.


                                    16 of 22
<PAGE>

The Company  eliminated much excess production  capacity and reduced overhead in
the last  several  years to address the decline in revenue.  In 1997 the Company
began a plan to  diversify  both its  product  base  and  target  markets  as it
acquired National Mobility Corporation.  In 1998 the Company continued to pursue
its cost reduction and  diversification  strategy with the  introduction  of the
shuttle bus product and the start-up of the OEM automotive supply business.  The
Company  plans to continue to develop  these new  products  and to increase  its
product offerings in the vehicle conversion commercial market.

The OEM automotive supply segment is dependent upon long-term contract business.
The business' current contracts are through 2003.

LIQUIDITY AND CAPITAL RESOURCES

Operating  activities  used cash of $2.6 million  during 1999  compared to using
cash of $4.6 million in the prior year. The use of cash resulted  primarily from
funding  working  capital  for the  sales  growth.  Receivables,  inventory  and
accounts payable increased  significantly in 1999 primarily due to the growth in
the OEM Automotive Supply Segment.

The Company  invested $1 million in property  and  equipment  during the year of
which $844, 000 was for new plant start-ups.

The Company  acquired  National  Mobility  Corporation  of  Elkhart,  Indiana in
February  1997 for $1.2 million in cash,  assumption  of certain bank debt,  and
15,000 shares of the Company's Common Stock.

The Company's use of cash for operations  and investing  activities was financed
by bank debt. As of October 3, 1999, bank debt was $14.6 million.

On October 30, 1998,  the Company  entered into a $14 million  credit  agreement
with a lending  institution.  The  agreement  is subject to renewal in  November
2001.   Revolving   advances  under  the  agreement  are  limited  to  specified
percentages of eligible receivables and inventories and are subject to a maximum
limit of $9.2 million.  The credit  agreement  also includes a $4.8 million term
loan which is payable in monthly  principal  installments  of $57,000  beginning
December 1, 1998.  The  revolving  borrowings  bear interest of either 1/2% over
prime or 3% over the  Eurodollar  rate.  The term loan bears  interest at either
3/4% over prime or 3.5% over the Eurodollar  rate. The borrowings are secured by
substantially all of the Company's assets. There is a fee of .25% of the average
unused portion of the maximum borrowing amount. The agreement is also subject to
various covenants of which the Company is in compliance as of October 3, 1999.

On November 23, 1998, the Company entered into an amended credit  agreement with
its former  primary  lender.  The agreement  called for all  borrowings  over $3
million to be paid with  proceeds  from the $14  million  refinancing  described
above. The remaining $3 million is payable in monthly principal  installments of
$36,000  beginning  December 1, 1998. The note matures in November 2001 at which
time any remaining  principal balance is due. The note bears interest at 2% over
the bank's prime rate and is  subordinate  to the $14 million  credit  agreement
described  above. The note is partially  guaranteed by two  individuals,  one of
whom is a director  and  officer of the Company  and the other is  currently  an
outside director.  As incentive for their guarantees,  the Company issued to the
individuals  warrants to purchase a total of 400,000  shares of Common Stock for
$2.20 per share.  The warrants have a five year term and are  exercisable at the
date of the grant.

On January 12, 1998, the Company  entered into an amended credit  agreement with
its  former  primary  lender  which  was  effective  as of  December  31,  1997.
Borrowings  were  limited to  specified  percentages  of  eligible  receivables,
inventories  and property and  equipment,  and were subject to maximum limits of
$15 million through March 30, 1998, $12 million from March 31, 1998 through June
29,  1998 and $10  million  thereafter.  Borrowings  under this  agreement  bore
interest at 1% over the bank's prime rate were secured by  substantially  all of
the Company's assets.

In addition to the  availability of bank  financing,  the Company has restricted
sales agreements with General Motors Acceptance Corporation,  Chrysler Financial
Corporation and Ford Motor Credit  Company.  Pursuant to these  agreements,  the
Company  obtains vehicle chassis from the OEM's for 90 days at nominal rates. If
the Company  fails to match a chassis  with a dealer  order within 90 days after
delivery of the chassis to the Company,  carrying charges increase to prime rate
plus 1%.

The Company  believes that future cash flows from  operations,  funds  available
under its  revolving  credit  agreement,  and the continued use of OEM financing
arrangements  to manage its chassis  inventory will be sufficient to satisfy its
anticipated operating needs and capital improvements for 2000.



                                    17 of 22
<PAGE>

OTHER MATTERS

The Company was formerly dependent on a centralized computer which provided data
in support of vital company-wide  operational and accounting functions.  Many of
the  computer  processes  used to generate  this data were  programmed  in-house
following  the common  practice  of using only two digits to  designate  a year.
Other software  purchased by the Company was written using the same  convention.
As the year 2000 approaches,  programs with such date-related  logic will not be
able to  distinguish  between  the  years  1900 and  2000,  potentially  causing
software  and  hardware  to fail,  generate  erroneous  calculations  or present
information  in an unusable form beyond  December 31, 1999. In 1997, the Company
began devoting  significant  resources to replace its current system with a new,
year  2000-compliant  enterprise  computer  system.  The new system is currently
operational.  The total cost of the project,  including  hardware,  software and
consulting costs, was approximately $1.1 million.

The Company has reviewed year 2000 readiness of third-party suppliers, customers
and financial  institutions  through  questionnaires and direct discussion.  The
Company's major suppliers have indicated that they are year 2000 compliant.  The
Company  believes  because of the nature of its raw  materials  and the multiple
suppliers of raw  materials,  the Company will not have a problem  obtaining raw
materials  to  build  its  products.  The  Company  also  believes  there is not
significant risk from the failure of its customers to become year 2000 compliant
because of the large number of active accounts.  The Company's  largest customer
is a  public  company  which  has  stated  it  is  year  2000  compliant.  It is
anticipated that the Company's year 2000 project reduced the risk of significant
business  interruptions,  but there is no  assurance  that this  outcome will be
achieved. Failure to detect and correct all internal instances of non-compliance
or the inability of third parties to achieve timely  compliance  could result in
the  interruption of normal business  operations  which could,  depending on its
duration, have a material adverse effect on the Company's financial condition or
results of operations.


DISCUSSION OF FORWARD-LOOKING INFORMATION

The   discussion   above   includes   forward-looking    statements   respecting
restructuring cost estimates,  future personnel and facility expense reductions,
anticipated tax refunds,  domestic and international market and economic trends,
the  Company's  product and target  market  diversification  plans,  anticipated
capital expenditures,  the adequacy of capital resources and other matters. From
time to time,  Starcraft  may make oral or  written  forward-looking  statements
regarding its anticipated sales, costs, expenses, earnings and matters affecting
its condition and operations. All such forward-looking statements are subject to
a number of material  factors which could cause the  statements  or  projections
contained  therein to be materially  inaccurate.  Such factors include,  without
limitation, the following:

General  Operating  Contingencies.  The  Company  may not be able to attract and
retain  employees with sufficient  skills to conduct its operations  efficiently
and may from  time to time be  subject  to work  slow-downs  or  stoppages.  The
Company  may be  adversely  affected  by delay or  unavailability  of  supply of
numerous  component  parts.  The Company  will not always be able to satisfy its
capital requirements with internally generated funds and may, from time to time,
need to rely on bank financing and other third party capital resources. There is
no assurance  that such  resources will always be available to the Company or as
to the terms that will apply to any  financing,  or as the Company's  ability to
continue to comply with such terms over time.

Acquisitions  and  Diversification.  The Company may be engaged in  negotiations
from  time to time  regarding  prospective  acquisitions  of van  conversion  or
related  businesses.  Such acquisitions could be material to the Company and, if
effected,  could have a material effect on the Company's  financial condition or
results of  operations.  There is no assurance as to when or whether the Company
will  be able  to  effect  acquisitions,  whether  it  will be able to  generate
requisite funding to effect such acquisitions,  or as to the terms on which such
acquisitions may be effected.  A significant aspect of the Company's strategy is
to diversify its product  offerings  into new product  lines,  such as taxis and
shuttle buses. The Company has less experience  manufacturing and marketing such
products  than it has in its  core  conversion  vehicle  business.  There  is no
assurance that such new product lines will be profitable.

Economic Conditions.  The van conversion industry is cyclical and is affected by
the  general  trends  of the  economy  and  consumer  preferences  and  consumer
confidence and trends of the automotive and recreational vehicle industries both
domestically  and in  international  markets.  The level of disposable  consumer
income affects the Company's sales because its products are generally considered
discretionary  expenditures by consumers. In difficult economic times, consumers
tend to spend  less of their  income  on  discretionary  items.  Other  economic
factors affecting the demand for the Company's products include the availability
and price of  gasoline,  the level of  interest  rates and the  availability  of
consumer  financing.  A decline  in  general  economic  conditions  or  consumer
confidence can be expected to affect Starcraft's sales adversely.



                                    18 of 22
<PAGE>

Supply and Financing of Vehicle Chassis.  The Company is dependent upon the OEMs
to  supply  its  requirements  for  vehicle  chassis.  Labor  stoppages,  supply
shortages  and a variety of other  factors that  influence  OEM  production  can
affect the availability or timely delivery of vehicle chassis to the Company. If
vehicle chassis are unavailable,  or if the Company must accept delivery earlier
or later than it otherwise would prefer,  sales could be adversely  affected and
financing  expenses  could  increase.  The  Company  must also  comply  with its
consignment  and  restricted  sale contracts with the OEMs pursuant to which the
OEMs  impose  certain  specifications  for the  Company's  vehicle  conversions,
including  gross vehicle  weight  standards.  Such  contracts  also restrict the
Company's  ability to dispose of completed  chassis and prohibit the transfer of
chassis  to  unauthorized  U.S.  and  foreign  dealers.  All  of  the  Company's
consignment and restricted sale contracts with chassis  suppliers are terminable
by either party on short  notice  without  cause.  The  availability  of the OEM
financing  rates  is  dependent  upon  the  Company's  compliance  with  its OEM
contracts and its ability to maintain satisfactory credit relationships with the
OEM's finance subsidiaries. Adverse changes in the Company's financial condition
or results of  operations  could cause such  financing  subsidiaries  to seek to
change  adversely the Company's  financing  terms or to terminate such financing
arrangements.  Such a change or termination could have a material adverse effect
on the Company's financial condition and results of operations.

Regulation.  The Company is subject to various foreign, federal, state and local
regulations.  In particular,  van conversion  components produced by the Company
are required to comply with Federal Motor Vehicle  Safety  Standards and similar
safety  standards  imposed in its foreign  markets.  Promulgation  of additional
safety  standards  in the future could  require the Company to incur  additional
testing and  engineering  expenses  which could  adversely  affect the Company's
results  of  operations.  The  Company's  international  sales can be  adversely
affected  by changes in foreign  import  tariffs and taxes and  fluctuations  in
exchange  rates.  The  Company  must  comply  with  certain  Federal  and  state
regulations  relating to the  disposition of hazardous  wastes  generated in its
production   processes.   The  Company's   failure  to  comply  with  applicable
regulations  or changes in current  regulations,  including  the adoption of new
safety or  environmental  standards,  could have material  adverse effect on the
Company's results of operations.

Competition.  The United States vehicle conversion  industry is very competitive
with several principal nationwide  manufacturers and numerous local and regional
competitors.  The OEM Automotive Supply business is also highly competitive with
several  large  companies  competing in this market.  There is no assurance  the
Company  will be able to  maintain  its  current  competitive  position in these
markets.

Potential Product Liability.  Like other automotive  manufacturers,  the Company
may be subject to claims that its products  caused or  contributed  to damage or
injury  sustained  in vehicle  accidents  or may be required to recall  products
deemed unsafe. Any such claims in excess of the Company's  insurance coverage or
material product recall expenses could adversely affect the Company's  financial
condition and results of operations.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable


<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
Starcraft Corporation and Subsidiaries
Goshen, Indiana


We have  audited  the  accompanying  consolidated  balance  sheets of  Starcraft
Corporation  and  Subsidiaries  as of October 3, 1999 and September 27, 1998 and
the related  consolidated  statements of operations,  shareholders'  equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated  financial  statements based on our audits. The
consolidated  financial statements of Starcraft Corporation and Subsidiaries for
the year ended  September 28, 1997 were audited by other  auditors  whose report
dated January 12, 1998 expressed an unqualified opinion on those statements.

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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Starcraft  Corporation and  Subsidiaries as of October 3, 1999 and September 27,
1998 and the  consolidated  results of their operations and their cash flows for
the  years  then  ended  in  conformity  with  generally   accepted   accounting
principles.




                                              /s/ Crowe, Chizek and Company LLP

Elkhart, Indiana
November 18, 1999

<PAGE>

                         Report of Independent Auditors


To the Board of Directors
Starcraft Corporation


We  have  audited  the  accompanying   consolidated  statements  of  operations,
shareholders'  equity,  and cash floss for the year ended  September  28,  1997.
These consolidated  financial statements are the responsibility of the Company's
management.  Our responsibilities is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash  flows  of  Starcraft  Corporation  and  Subsidiaries  for the  year  ended
September 28, 1997 in conformity with generally accepted accounting principles.


                              /s/Ernst & Young LLP


January 12, 1998
Fort Wayne, Indiana

<PAGE>


--------------------------------------------------------------------------------
                     STARCRAFT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                     October 3, 1999 and September 27, 1998

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

<TABLE>
<CAPTION>

                                                            1999            1998
                                                              (in thousands)
ASSETS
Current assets
<S>                                                    <C>              <C>
     Cash and cash equivalents                         $        600     $      1,369
     Trade receivables, less allowance for
       doubtful accounts of $40                              16,608            6,160
     Manufacturers' rebates receivable                          468              569
     Recoverable income taxes                                     -              417
     Inventories                                             16,377           10,857
     Other                                                      530              401
                                                       ------------     ------------
         Total current assets                                34,583           19,773

Property and equipment
     Land, buildings and improvements                         6,355            5,927
     Machinery and equipment                                  6,677            6,224
                                                       ------------     ------------
                                                             13,032           12,151
     Less accumulated depreciation                            5,168            4,305
                                                       ------------     ------------
                                                              7,864            7,846

Goodwill, at amortized cost                                   1,258            1,355

Other assets                                                     76               41
                                                       ------------     ------------

                                                       $     43,781     $     29,015
                                                       ============     ============
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)

<PAGE>
                     STARCRAFT CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                     October 3, 1999 and September 27, 1998

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

<TABLE>
<CAPTION>

                                                              1999            1998
                                                                 (in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S>                                                      <C>              <C>
     Current maturities of long-term debt                $      1,057     $      1,023
     Accounts payable, trade                                   18,496            8,244
     Accrued expenses
         Warranty                                               1,972            1,766
         Compensation and related expenses                        384              322
         Taxes                                                  1,014              971
         Other                                                  1,468            2,045
                                                         ------------     ------------
         Total current liabilities                             24,391           14,371

Long-term debt                                                 13,506           10,777

Deferred income taxes                                               -              331

Minority interest in subsidiary                                 1,698                -

Shareholders' equity
     Preferred stock, no par value:  2,000,000 shares
       authorized but unissued                                      -                -
     Common stock, no par value:
         Authorized shares - 10,000,000  shares
           issued and outstanding  shares -
           1999 - 4,176,928;
           1998 - 4,133,600                                    14,144           14,016
     Additional paid-in capital                                 1,008            1,008
     Accumulated deficit                                      (10,966)         (11,488)
                                                         ------------     ------------
                                                                4,186            3,536
                                                         ------------     ------------

                                                         $     43,781     $     29,015
                                                         ============     ============
</TABLE>



--------------------------------------------------------------------------------
                See accompanying notes to financial statements.

<PAGE>
                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the years ended October 3, 1999,
                    September 27, 1998 and September 28, 1997

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                    1999            1998            1997
                                                    (in thousands, except per share data)
<S>                                             <C>            <C>              <C>
Net sales
     Domestic                                   $     81,397   $     42,857     $     57,235
     Export                                            8,107         10,235           15,047
                                                ------------   ------------     ------------
                                                      89,504         53,092           72,282

Cost of goods sold                                    74,548         49,590           66,342
                                                ------------   ------------     ------------


Gross profit                                          14,956          3,502            5,940

Operating expenses
     Selling and promotion                             4,638          4,484            7,243
     General and administrative                        6,284          5,064            6,681
     Restructuring charges                                 -              -            1,010
     Goodwill impairment loss                              -              -            4,916
                                                ------------   ------------     ------------


Operating income (loss)                                4,034         (6,046)         (13,910)

Nonoperating (expense) income
     Interest, net                                    (1,230)          (892)            (400)
     Other income, net                                   115            100              194
                                                ------------   ------------     ------------
                                                      (1,115)          (792)            (206)
                                                ------------   ------------     ------------


Income (loss) before minority interest
 and income taxes                                      2,919         (6,838)         (14,116)

Minority interest in income of subsidiary              2,448              -                -

Federal and state income taxes (benefit)                 (51)           (79)          (2,814)
                                                ------------   ------------     ------------


Net income (loss)                               $        522   $     (6,759)    $    (11,302)
                                                ============   ============     ============


Earnings (loss) per share                       $       0.13   $      (1.63)    $      (2.74)

Earnings (loss) per share assuming dilution     $       0.12   $      (1.63)    $      (2.74)
</TABLE>


--------------------------------------------------------------------------------
                See accompanying notes to financial statements.

<PAGE>


                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      For the years ended October 3, 1999,
                   September 27, 1998 and September 28, 1997

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                          1999          1998          1997
                                                                                    (in thousands)
<S>                                                                    <C>           <C>           <C>
Cash flows from operating activities
Net income (loss)                                                      $    522      $ (6,759)     $(11,302)
Adjustments to reconcile net income (loss)
  to net cash from operating activities
     Depreciation and amortization                                        1,065         1,018         1,199
     Noncash restructuring charges                                           --            --           611
     Goodwill impairment loss                                                --            --         4,916
     Deferred income taxes                                                 (331)         (177)          583
     Minority interest                                                    1,698            --            --
     Change in operating assets and liabilities
         Receivables                                                     (9,930)          823         2,465
         Inventories                                                     (5,520)       (1,587)        4,494
         Accounts payable                                                10,252         1,890        (3,369)
         Accrued expenses                                                  (266)          178        (2,512)
         Other                                                              (65)           30          (113)
                                                                       --------      --------      --------
              Net cash from operating activities                         (2,575)       (4,584)       (3,028)

Cash flows from investing activities
Purchase of property and equipment                                       (1,024)         (785)       (1,407)
Purchase assets of National Mobility Corporation                             --            --        (1,756)
Proceeds from sale of property and equipment                                 67            26            60
                                                                       --------      --------      --------
     Net cash from investing activities                                    (957)         (759)       (3,103)

Cash flows from financing activities
Proceeds from revolving credit agreement                                  8,664        11,604        12,200
Payments of revolving credit agreement                                   (4,915)       (5,500)       (6,504)
Payments of long-term installment debt                                     (986)           --          (323)
                                                                       --------      --------      --------
     Net cash from financing activities                                   2,763         6,104         5,373
                                                                       --------      --------      --------

Net change in cash and cash equivalents                                    (769)          761          (758)

Cash and cash equivalents at beginning of year                            1,369           608         1,366
                                                                       --------      --------      --------

Cash and cash equivalents at end of year                               $    600      $  1,369      $    608
                                                                       ========      ========      ========

Supplemental disclosure of cash flow information
     Interest paid                                                     $  1,411      $    770      $    376
     Income taxes paid (refunded)                                          (360)           10           140
</TABLE>



--------------------------------------------------------------------------------
                See accompanying notes to financial statements.
<PAGE>



--------------------------------------------------------------------------------
                     STARCRAFT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS'EQUITY
            For the years ended October 3, 1999, September 27, 1998
                             and September 28, 1997
<TABLE>
<CAPTION>


                                               Outstanding                  Additional     Retained
                                                 Common        Common         Paid-In      Earnings
                                                 Shares         Stock         Capital      (Deficit)       Total
                                                 ------         -----         -------      ---------       -----
                                                              -------------------(in thousands)--------------------
-------------------------------------------------------------------------------------------------------------------
<S>                                              <C>          <C>           <C>           <C>            <C>
Balance, September 30, 1996                      4,118,600    $   13,971    $    1,008    $    6,573     $   21,552
     Net loss                                            -             -             -       (11,302)       (11,302)
     Issuance of 15,000 shares
        of common stock                             15,000            45             -             -             45
                                            --------------    ----------    ----------    ----------     ----------


Balance, September 28, 1997                      4,133,600        14,016         1,008        (4,729)        10,295
     Net loss                                            -             -             -        (6,759)        (6,759)
                                            --------------    ----------    ----------    ----------     ----------


Balance, September 27, 1998                      4,133,600        14,016         1,008       (11,488)         3,536
     Net income                                          -             -             -           522            522
     Issuance of 43,328 shares of
       common stock                                 43,328           128             -             -            128
                                            --------------    ----------    ----------    ----------     ----------

Balance, October 3, 1999                         4,176,928    $   14,144    $    1,008    $  (10,966)    $    4,186
                                            ==============    ==========    ==========    ==========     ==========
</TABLE>

--------------------------------------------------------------------------------
                See accompanying notes to financial statements.

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business and Principles of  Consolidation:  Starcraft  Corporation and
Subsidiaries  (Company)  are second stage  manufacturers  of custom van,  pickup
truck and sport  utility  vehicle  conversions,  shuttle  buses and  direct  OEM
automotive supply. The consolidated financial statements include the accounts of
Starcraft  Corporation and its wholly owned subsidiaries:  Starcraft  Automotive
Group, Inc., Imperial Automotive Group, Inc.  (Imperial),  Starcraft  Southwest,
Inc.,  and  National  Mobility  Corporation.  The  Company  has a 50%  ownership
interest  in  Tecstar,   L.L.C.   (Tecstar)  which  is  an  original   equipment
manufacturer  (OEM)  automotive  supplier.  The  accounts  of  Tecstar  are also
included  in  these   consolidated   financial   statements.   All   significant
intercompany accounts and transactions have been eliminated in consolidation.

The  Company's  customers  operate in the  automotive  industry.  The  Company's
conversion  vehicle products segment (see Note 15) sells product  throughout the
United  States,  and export  sales are  principally  to  locations  in Japan and
northern  Europe.  The OEM automotive  supply segment sales are to a customer in
the United States. Credit is extended to customers based on an evaluation of the
customer's financial condition, and when credit is extended collateral generally
is not required.

Statements  of Cash Flows:  During 1999,  the Company  issued  29,926  shares of
common stock with a value of $90 to its 401(k) plan and issued  13,402 shares of
common stock with a value of $38 under the directors share plan.

Cash Equivalents and Concentrations:  Cash equivalents include all highly liquid
investments  with a maturity when  purchased of three months or less.  The first
$100,000 of deposits in each financial  institution  are insured by an agency of
the U.S. Government.

Inventories:  Inventories  are  stated at the lower of cost or  market.  Cost is
determined  by the  last-in,  first-out  (LIFO)  method for certain  inventories
($11,380 and $10,081 at October 3, 1999 and  September  27, 1998,  respectively)
and by the first-in, first-out (FIFO) method for all other inventories.

Property and Equipment:  Property and equipment are stated at cost. Depreciation
is computed  principally by the  straight-line  method over the estimated useful
lives of the assets. The Company is depreciating buildings over periods of 15 to
50 years,  building  improvements  over periods of 5 to 20 years,  and equipment
over periods of 3 to 12 years.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Goodwill:  Goodwill is amortized by the straight-line method over a period of 15
years and is stated net of accumulated  amortization of $252 and $155 at October
3,  1999 and  September  27,  1998,  respectively.  The  Company  evaluates  the
recoverability based on undiscounted projected operating cash flows when factors
indicate that an impairment may exist. For the year ended September 28, 1997, an
impairment loss of $4,916 was recorded.  No impairment loss was recorded for the
two years ended October 3, 1999.

Warranties:  The Company  follows the policy of accruing an estimated  liability
for warranties at the time the warranted products are sold.

Revenue  Recognition:  The  Company  generally  manufactures  products  based on
specific orders from  customers.  Shipments are generally made by common carrier
after receiving  authorization from the customer, and revenue is recognized upon
shipment. Net sales do not include the cost of consigned chassis (see Note 10).

Stock Based  Compensation:  The Company  periodically grants stock options for a
fixed  number of shares to  employees.  The Company  accounts  for stock  option
grants  in  accordance  with  Accounting   Principles   Board  Opinion  No.  25,
"Accounting for Stock Issued to Employees" ("APB 25").

Use of Estimates:  Preparation  of the financial  statements in accordance  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. Management
makes  estimates for warranty and contingency  reserves,  allowance for doubtful
accounts, impairment of goodwill, and depreciation expense.

Earnings  Per Common  Share:  Basic and diluted  earnings  per common  share are
computed under an accounting standard effective beginning with the quarter ended
December  28,  1997.  All prior  earnings  per common  share  amounts  have been
restated  to be  comparable.  Basic  earnings  per common  share is based on net
income available to common  shareholders  divided by the weighted average number
of common shares  considered to be outstanding  during the period.  The weighted
average  number of common  shares  outstanding  were  4,158,651,  4,133,600  and
4,127,350 for the years ended October 3, 1999,  September 27, 1998 and September
28,  1997,  respectively.  Diluted  earnings per common share shows the dilutive
effect of any additional  potential  common shares  issuable under stock options
and warrants.

Seasonality:  The Company's  business is seasonal.  Sales are  generally  higher
during the spring and summer months of the year.


--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
  (Continued)

Fiscal Year:  The Company's  fiscal year ends on the Sunday closest to September
30. The year ended October 3, 1999 consists of 53 weeks, whereas the years ended
September 27, 1998 and September 28, 1997 each contain 52 weeks.

Recently  Enacted  Accounting  Standards:  In 1998,  the  American  Institute of
Certified  Public  Accountants  (AICPA)  issued SOP No. 98-5,  "Reporting on the
Costs  of  Start-Up   Activities."  This  statement  provides  guidance  on  the
accounting for start-up costs and organization  costs and is effective for years
beginning  after  December  15,  1998.  Also in  1998,  the  AICPA  issued  SFAS
(Statement of Financial Accounting Standards) Statement No. 133, "Accounting for
Derivative  Instruments and Hedging  Activities".  This statement was amended by
SFAS No. 137 which, deferred the effective date until years beginning after June
15, 2000. This statement  requires all derivative  instruments to be recorded in
the balance sheet at their fair value.  Changes in the fair value of derivatives
are  required  to  be  recorded  each  period  in  current   earnings  or  other
comprehensive income,  depending on whether the derivative is designated as part
of a hedge transaction. Management does not expect the effects of adoption to be
significant.

Fair Value of  Financial  Instruments:  The  Company's  carrying  amount for its
financial instruments, which include cash, accounts receivable, accounts payable
and long-term debt, approximates fair value.


NOTE 2 - INVENTORIES

The  composition  of inventories at October 3, 1999 and September 27, 1998 is as
follows:

                                      1999           1998
                                 ------------     ------------
     Raw materials               $     10,844     $      4,631
     Chassis                            1,918            2,006
     Work-in-process                    1,940            2,584
     Finished goods                     1,675            1,636
                                 ------------     ------------

                                 $     16,377     $     10,857
                                 ============     ============

The use of the LIFO method of determining the cost of inventories did not have a
material effect on inventories at October 3, 1999 and September 27, 1998.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 3 - DEBT ARRANGEMENTS

On October 30, 1998, the Company entered into a $14,000 credit  agreement with a
lending  institution.  The  agreement  is subject to renewal in  November  2001.
Revolving  advances under the agreement are limited to specified  percentages of
eligible  receivables  and  inventories  and are  subject to a maximum  limit of
$9,200.  At October 3, 1999, the outstanding  balance on the revolver is $7,749.
The  credit  agreement  also  includes  a $4,800  term loan  which is payable in
monthly  principal  installments of $57 which began December 1, 1998. At October
3, 1999, the outstanding balance on the term loan is $4,171. The note matures in
November 2001 at which time any remaining principal balance is due The revolving
borrowings  bear  interest of either  1/2% over prime or 3% over the  Eurodollar
rate.  The term note bears  interest  at either 3/4% over prime or 3.5% over the
Eurodollar  rate.  The  borrowings  are  secured  by  substantially  all  of the
Company's  assets.  There is a fee of .25% of the average  unused portion of the
maximum  borrowing  amount.  Pursuant to the agreement,  the Company must, among
other  things,  maintain  a minimum  level of  tangible  net worth and must meet
predetermined   levels  of  earnings  before  income  taxes,   depreciation  and
amortization  (EBITDA).  If  these  minimum  levels  are  not  maintained,   any
outstanding balances become payable upon demand of the lending  institution.  At
October 3, 1999, the Company is in compliance with all covenants.

On November 23, 1998, the Company entered into an amended credit  agreement with
its former primary lender.  The agreement  called for all borrowings over $3,000
to be paid with  proceeds  from the $14,000  refinancing  described  above.  The
remaining $3,000 is payable in monthly principal installments of $36 which began
December 1, 1998. At October 3, 1999, the outstanding  balance on this term note
is  $2,643.  The note  matures  in  November  2001 at which  time any  remaining
principal  balance is due.  The note bears  interest at 2% over the bank's prime
rate and is subordinate to the $14,000 credit  agreement  described  above.  The
note is  partially  guaranteed  by two  individuals,  both  whom  are  currently
directors and one of whom is an officer of the Company. (See Note 13)

The current and long-term  notes payable on the September 27, 1998 balance sheet
reflect the above modifications.  The carrying amount of the Company's long-term
debt approximates fair value.

Interest expense was approximately $1,230, $892 and $403 in 1999, 1998 and 1997,
respectively.

Long-term debt is due as follows:

            Fiscal Year Ending
            ------------------
                  2000                                $     1,057
                  2001                                      1,114
                  2002                                     12,392


--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 4 - INCOME TAXES

Federal and state income taxes (benefit), all of which were domestic, consist of
the following:

                                   1999             1998             1997
                                   ----             ----             ----
         Current
              Federal           $          -    $        (61)    $     (2,770)
              State                      280             159             (627)
                                ------------    ------------     ------------
                                         280              98           (3,397)
         Deferred
              Federal                   (289)           (154)             508
              State                      (42)            (23)              75
                                ------------    ------------     ------------
                                        (331)           (177)             583
                                ------------    ------------     ------------

                                $        (51)   $        (79)    $     (2,814)
                                ============    ============     ============

The provisions for income taxes are different from amounts that would  otherwise
be computed  by  applying a federal  statutory  rate of 34% to income  taxes.  A
reconciliation of the differences is as follows:
<TABLE>
<CAPTION>

                                                                1999             1998             1997
                                                                ----             ----             ----

<S>                                                          <C>             <C>              <C>
         Rate applied to pretax income (loss)                $        160    $     (2,325)    $     (4,799)
         State taxes - net                                             24            (196)            (701)
         Foreign sales corporation                                      -               -              (36)
         Net operating loss for which no
           benefit was recognized                                     474           2,231                -
         Change in valuation allowance                               (747)            254            2,544
         Other, net                                                    38             (43)             178
                                                             ------------    ------------     ------------

                                                             $        (51)   $        (79)    $     (2,814)
                                                             ============    ============     ============
</TABLE>



--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 4 - INCOME TAXES (Continued)

The  composition  of the deferred tax assets and  liabilities at October 3, 1999
and September 27, 1998 is as follows:

<TABLE>
<CAPTION>


                                                                                  1999            1998
                                                                                  ----            ----
<S>                                                                          <C>              <C>
         Deferred tax liabilities
              Accelerated depreciation                                       $       (522)    $       (460)
              Inventory basis difference                                             (331)            (331)
                                                                             ------------     ------------
                                                                                     (853)            (791)
         Deferred tax assets
              Inventory                                                               181              275
              Nondeductible accruals
                  Warranty                                                            652              689
                  Other                                                               301              487
              Goodwill                                                              1,441            1,587
              Alternative minimum tax credit carryforward                             220              220
              Net operating loss carryforward                                       2,814            2,231
                                                                             ------------     ------------
         Total deferred tax assets                                                  5,609            5,489
         Valuation allowance                                                       (4,756)          (5,029)
                                                                             ------------     ------------
                                                                                      853              460
                                                                             ------------     ------------

         Net deferred tax asset (liability)                                  $          -     $       (331)
                                                                             ============     ============
</TABLE>


The alternative minimum tax carryforward of $220 has no expiration date. The net
operating loss carryforward expires as follows: $2,340 in 2018 and $474 in 2019.


NOTE 5 - COMPENSATION PLANS

The Company sponsors a qualified  profit-sharing  plan, more commonly known as a
401(k) plan, for all of its employees with over six months of service.  The plan
provides  for a  discretionary  matching  contribution  by  the  Company  of the
employee's salary deduction,  up to 6% of compensation.  Also, the plan provides
for an additional discretionary contribution annually as determined by the Board
of Directors.  The amounts  charged to expense for this plan were  approximately
$90, $(250) and $361 in 1999, 1998 and 1997, respectively.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 6 - STOCK OPTION PLANS

The Company  maintains two stock  incentive  plans under which stock options are
granted to key  employees  and  directors.  The plans  authorize the granting of
stock  options  for up to 630,000  shares of the  Company's  common  stock.  The
options in these two plans have five year  terms and  become  fully  exercisable
after six months.  The Company also sponsors a qualified  stock option plan with
40,000   shares  of  common  stock   reserved  for  options  to  certain   sales
representatives  who are not  employees of the Company.  These options have five
year terms.

Under the three  plans,  options  may not be granted at prices  below 85% of the
current  market  value of the stock at the date of grant.  All  options  awarded
through October 3, 1999 have been at fair market value on the date of grant. For
the years in the period ended  September 27, 1998 and  September  28, 1997,  the
effect  of the  stock  options  in  computing  earnings  per  common  share  was
antidilutive.

A summary of the Company's stock option activity and related information for the
years ended October 3, 1999, September 27, 1998 and September 28, 1997 follows:

<TABLE>
<CAPTION>
                                            1 9 9 9                     1 9 9 8                      1 9 9 7
                                            -------                     -------                      -------
                                                 Weighted                     Weighted                    Weighted
                                                  Average                      Average                     Average
                                                 Exercise                     Exercise                    Exercise
                                    Options        Price        Options         Price        Options        Price
                                 -----------     -------      -----------    --------     -----------     --------
<S>                                  <C>         <C>              <C>        <C>              <C>         <C>
Outstanding at
  beginning of year                  452,849     $  3.97          407,349    $   5.65         375,349     $  6.24
Granted                              162,500        2.04          188,849        1.85         124,500        3.40
Canceled                             (31,500)       3.72          (85,000)       4.41         (92,500)       5.02
Expired                              (14,000)       8.33          (58,349)       8.15               -           -
                                 -----------     -------      -----------    --------     -----------     --------
Outstanding at
  end of year                        569,849     $  3.33          452,849    $   3.97         407,349     $  5.65
                                 ===========     =======      ===========    ========     ===========     =======
Exercisable at end of year           559,849     $  3.32          383,515    $   4.22         302,149     $  6.46
                                 ===========     =======      ===========    ========     ===========     =======
</TABLE>


As of October 3, 1999,  there were 309,849  options  outstanding  with  exercise
prices which ranged from $1.50 to $3.00. The weighted-average  exercise price of
these options is $1.77, and the weighted-average  remaining  contractual life is
3.7 years. As of October 3, 1999,  there were 260,000 options  outstanding  with
exercise prices which ranged from $3.125 to $7.75. The weighted-average exercise
price of these options is $5.19, and the weighted-average  remaining contractual
life is 1.8 years.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 6 - STOCK OPTION PLANS (Continued)

The  Company  has  elected  to  follow  APB 25 and  related  interpretations  in
accounting for its employee stock options.  Under APB 25 no compensation expense
has been  recognized  because the exercise price of the Company's  stock options
has  equaled  the  market  price of the  underlying  stock on the date of grant.
Proforma information  regarding net income and earnings per share is required by
FASB Statement No. 123,  "Accounting for Stock-Based  Compensation," ("FAS 123")
and has been  determined  as if the Company had  accounted for its stock options
issued in 1999 and 1998 under the fair value  method of FAS 123.  The fair value
was estimated as of the date of grant using a Black-Sholes  option pricing model
with the following assumptions:

<TABLE>
<CAPTION>
                                         1999                  1998                  1997
                                         ----                  ----                  ----
<S>                                     <C>                   <C>                   <C>
     Risk-free interest rate         4.43% - 5.86%         4.52% - 5.63%         6.04% - 6.77%
     Dividend yield                       0%                    0%                    0%
     Volatility factor               62.4% - 70.9%         54.8% - 59.8%         40.9% - 48.8%
     Expected option life               4 years               4 years               4 years
</TABLE>

For purposes of proforma disclosures, the estimated fair value of the options is
amortized to expense over the options'  vesting period.  The Company's  proforma
information follows:
<TABLE>
<CAPTION>

                                                 1999          1998        1997
                                                 ----          ----        ----
<S>                                         <C>             <C>            <C>
Proforma net income (loss)                  $       311     $   (6,912)    $   (11,469)
Proforma net income (loss) per share        $       .08     $    (1.67)    $     (2.78)
</TABLE>

NOTE 7 - SHAREHOLDER RIGHTS PLAN

In August 1997 the Company adopted a Shareholders  Rights Plan issuing one right
for each  outstanding  share.  Each  right  entitles  the  registered  holder to
purchase from the Company one share of common stock at $15 per share, subject to
adjustment.  The rights  become  exercisable  if a person or group  (other  than
certain  related  persons)  acquires or announces a tender offer for  prescribed
percentages  of the Company's  shares or is declared an "adverse  person" by the
Company's  Board of Directors.  In these events,  each right holder may purchase
shares  with a value  equal to twice the  exercise  price.  Furthermore,  if the
Company  engages in certain  mergers or similar  business  combinations  a right
holder may purchase  shares of the  acquiring  company with a value to two times
the purchase price of the right. The rights expire on August 12, 2007.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 8 - RESTRUCTURING CHARGES AND GOODWILL IMPAIRMENT

In December 1996, the Company consolidated its Imperial manufacturing  operation
located in Elkhart,  Indiana into the Company's facility in Goshen,  Indiana. In
June 1997, the Company  closed its McGregor,  Texas plant and sold the assets of
that plant. The Company recorded $1,010 of restructuring charges related to such
activities primarily for employee termination and other costs ($179),  leasehold
asset  write-offs  ($326) and the  recognition  of remaining  contractual  lease
obligations  ($505).  The contractual lease obligations  primarily  pertained to
remaining rent and associated contractual costs at the former Imperial location.
The remaining  liability for contractual lease obligations at September 27, 1997
was paid during fiscal 1998.

Operating losses at Imperial, together with a strategic review of the conversion
industry,  resulted in an evaluation of the goodwill  related to the acquisition
of Imperial  Industries,  Inc. The July 1994 acquisition of Imperial Industries,
Inc.  was  viewed  at  that  time  as a  strategic  expansion  of the  Company's
production  capacity,  conversion  products lines, and sales and dealer network.
The  operating   strategy  was  to  allow  Imperial  to  remain  an  independent
manufacturing  and  operating   subsidiary  focused  exclusively  on  the  price
sensitive,  entry level domestic conversion market.  However,  subsequent to the
acquisition,   the  domestic   market  has   contracted,   gross   margins  have
deteriorated,  and Imperial  has  experienced  operating  losses.  In 1997,  the
manufacturing  operations  of  Imperial  were  consolidated  into the  Starcraft
manufacturing  facility to reduce excess  capacity.  Further  integration of the
manufacturing  operations,  as well as  integration  and reduction of the sales,
dealer and  general  and  administration  functions,  have  occurred  since this
consolidation.

As a result of the change in the domestic  market,  abandonment  of the original
strategic operating plan for Imperial, cumulative operating losses and continued
weakness in the domestic vehicle  conversion  market, it was determined that the
goodwill was not  recoverable,  and  therefore,  a goodwill  impairment  loss of
$4,916 was  recorded  in the fourth  quarter of 1997 to write off the  remaining
goodwill associated with this acquisition.


NOTE 9 - BUSINESS COMBINATION

On February  28,  1997,  the  Company  acquired  the assets and assumed  certain
liabilities  of National  Mobility  Corporation,  a  manufacturer  of conversion
vehicles  for the  physically  challenged.  The  purchase  price of the acquired
assets was $1,200 in cash,  assumption  of certain  bank debt,  and  issuance of
15,000 shares of the Company's common stock. The excess of the total acquisition
cost over the fair value of the net assets acquired was recorded as goodwill and
is being amortized over 15 years using the straight-line method.


--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 9 - BUSINESS COMBINATION (Continued)

The  acquisition  was recorded  using the  purchase  method of  accounting,  and
accordingly,  the results of operations of National Mobility Corporation for the
years ended  October 3, 1999 and  September  27,  1998 and for the seven  months
ended September 27, 1997 are included in the consolidated  financial statements.
The purchase price has been allocated to assets acquired and liabilities assumed
based on their respective fair values at the date of acquisition. The allocation
of the purchase price is summarized as follows:

         Current assets                             $      2,448
         Property and equipment                              200
         Goodwill                                          1,510
         Current liabilities                              (2,357)
                                                    ------------
                                                    $      1,801
                                                    ============

On the basis of a proforma  consolidation of the results of operations as if the
acquisition  had taken place at the  beginning of 1996,  consolidated  net sales
would have been  $102,978 for 1996 and $73,771 for 1997.  Consolidated  proforma
income  (loss)  and  earnings  (loss) per share  would not have been  materially
different from the reported amounts for 1998 and 1997. The proforma  information
is not  necessarily  indicative  of what  the  actual  consolidated  results  of
operations  might  have  been  if the  acquisition  had  been  effective  at the
beginning of 1996.


NOTE 10 - CONSIGNMENT ARRANGEMENTS

The  Company  obtains  vehicle  chassis  for  modification  from  major  vehicle
manufacturers  (OEMs) under consignment and restricted sales  agreements.  These
agreements generally provide that (i) the Company may not obtain certificates of
origin or other evidence of ownership of chassis, (ii) modification must conform
to standards specified by OEMs, and (iii) modifications  generally are performed
only after a sale has been negotiated with an OEM approved  dealer.  The Company
generally ships converted chassis only after dealer acceptance has been approved
by the OEM. The OEMs bill the dealer and provide warranty for the chassis.

Consistent with the practice in the industry,  the Company  accounts for chassis
as consignment inventory. Accordingly, the Company records chassis inventory and
related obligations only in the event they are required to purchase chassis from
the OEM.  Provisions  for  decline  in chassis  value are  recognized  when,  in
management's estimation,  such provisions are necessary.  Provisions for decline
in chassis value,  chassis inventory,  and chassis sales are not material to the
accompanying financial statements.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 10 - CONSIGNMENT ARRANGEMENTS (Continued)

At October 3, 1999,  the  Company  has  possession  of chassis in the  aggregate
amount of $14,140 (of which $1,940 related to chassis on consignment for periods
exceeding 90 days) and has total chassis line availability of $28,300.  Carrying
charges on consignment chassis,  which are presented in cost of goods sold, were
approximately $819, $1,030 and $2,740 in 1999, 1998 and 1997, respectively.  The
OEMs  have  also  instituted   marketing   incentive   rebates  to  second-stage
manufacturers  based on the  number  of  chassis  delivered  to  dealers.  Those
incentives  reduced cost of goods sold by  approximately  $476, $731 and $751 in
1999, 1998 and 1997, respectively.


NOTE 11 - COMMITMENTS AND CONTINGENCIES

The Company leases  certain of its  facilities  and equipment.  The total rental
expense for 1999,  1998 and 1997 is $667,  $270 and $688,  respectively.  Rental
commitments at October 3, 1999 for long-term  noncancelable operating leases are
as follows:

             2000                                               $        446
             2001                                                        319
             2002                                                        219
             2003                                                        217
             2004                                                          1
                                                                ------------
                                                                $      1,202
                                                                ============

The Company is subject to various legal  proceedings  and claims with respect to
such matters as product  liabilities  and other  actions  which arise out of the
normal course of its  business.  Management  and its legal counsel  periodically
review the  probable  outcome of pending  proceedings  and the costs  reasonably
expected to be incurred. The Company accrues for these costs when it is probable
that a liability  has been incurred and the amount of the loss can be reasonably
estimated.  In the opinion of  management,  any ultimate  cost to the Company in
excess of amounts accrued will not materially affect its consolidated  financial
position, cash flows or results of operations.

The Company's commitments with respect to its chassis arrangements are described
in Note 10.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 12 - RESEARCH AND DEVELOPMENT

The  Company  incurs  costs to improve  the  appeal and safety of its  products.
Research and development costs are charged to operations when incurred.  Amounts
charged to operations were  approximately  $490, $520 and $824 in 1999, 1998 and
1997, respectively.


NOTE 13 - WARRANTS

On November 20, 1998 the Company  issued  warrants to purchase  shares of common
stock to two  individuals  as  incentive  for  their  partial  guarantee  of the
Company's  long-term debt (See Note 3). The  individuals can each purchase up to
200,000  shares of common stock of the Company for $2.20 per share which was the
ten day average  market price  preceding the date of grant.  The warrants have a
five year term.


NOTE 14 - UNAUDITED FINANCIAL INFORMATION

Presented below is certain unaudited  quarterly  financial  information for 1999
and 1998.
<TABLE>
<CAPTION>


                                                                            Quarter Ended
                                               --------------------------------------------------------------------
                                               December 27,         March 28,         June 27,          October 3,
                                                   1998               1999              1999               1999
                                               ------------      ------------       ------------       ------------
<S>                                            <C>               <C>                <C>                <C>
     Net sales                                 $     12,134      $     18,639       $     28,112       $     30,619
     Gross profit                                       958             3,398              5,727              4,873
     Net income (loss)                               (1,820)              122              1,490                730
     Earnings (loss) per share                        (0.44)             0.03               0.36               0.17
     Earnings (loss) per share
       assuming dilution                              (0.44)             0.03               0.33               0.16

                                                                            Quarter Ended
                                               --------------------------------------------------------------------
                                               December 28,         March 29,         June 28,         September 27,
                                                   1997               1998              1998               1998
                                               ------------      ------------       ------------       ------------
     Net sales                                 $     13,419      $     14,464       $     11,820       $     13,389
     Gross profit (loss)                              1,205             1,656                856               (215)
     Net loss                                        (1,137)             (821)            (1,281)            (3,520)
     Loss per  share                                  (0.28)            (0.19)             (0.31)             (0.85)
</TABLE>


Adjustments  in the fourth  quarter of the fiscal year ended  September 27, 1998
included the start up loss related to Tecstar, L.L.C. and certain accruals.

--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 15 - OPERATING SEGMENT INFORMATION

In 1999,  the Company  adopted SFAS No. 131,  "Disclosures  about Segments of an
Enterprise  and  Related  Information".  The  Company  has  determined  that its
reportable segments are those that are based on the Company's method of internal
reporting,  which disaggregates its business by product category.  The Company's
two  reportable  operating  segments  are  conversion  vehicle  products and OEM
(original equipment  manufacturer)  automotive supply. The Company evaluates the
performance  of its segments and allocates  resources to them based on operating
income. The accounting  policies of the segments are the same as those described
in Note 1 and there are no inter-segment revenues.  Differences between reported
operating segment income amounts and consolidated net income represent corporate
expenses  for  administrative  functions  that are not  allocated  to  segments,
nonoperating  income or expense,  and the provision  for income  taxes.  The OEM
automotive  parts supplier  segment was started during 1998 and did not have any
sales revenue, but did have costs associated with starting the business.

The table below presents  information about segments used by the chief operating
decision maker of the Company for 1999, 1998 and 1997:
<TABLE>
<CAPTION>

                                                1999            1998             1997
                                            ------------     ------------    ------------
<S>                                         <C>              <C>             <C>
Net sales by geographic region:
     Conversion vehicle products
          Domestic                          $     48,697     $     42,857    $     57,235
          Export
               Japan                               3,981            5,579           9,541
               Europe                              3,574            3,461           3,632
               Middle East                           302            1,195           1,312
               Other                                 250                -             562
     OEM automotive supply
          Domestic                                32,700                -               -
          Export                                       -                -               -
                                            ------------     ------------    ------------

                                            $     89,504     $     53,092    $     72,282
                                            ============     ============    ============

Operating income (loss):
     Conversion vehicle products            $        271     $     (3,199)   $    (11,616)
     OEM automotive supply                         3,240             (488)              -
                                            ------------     ------------    ------------

                                            $      3,511     $     (3,687)   $    (11,616)
                                            ============     ============    ============
</TABLE>


--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 15 - SEGMENT INFORMATION (Continued)

                                               1999            1998
                                               ----            ----
Total assets:
     Conversion vehicle products           $     25,155     $     28,246
     OEM automotive supply                       18,626              769
                                           ------------     ------------

                                           $     43,781     $     29,015
                                           ============     ============

The following specified amounts are included in the measure of operating segment
income (loss) reviewed by the chief operating decision maker:
<TABLE>
<CAPTION>


                                              1999            1998             1997
                                              ----            ----             ----
<S>                                       <C>              <C>             <C>
Interest expense
     Conversion vehicle products          $      1,077     $        892    $        403
     OEM automotive supply                         153                -               -
                                          ------------     ------------    ------------

                                          $      1,230     $        892    $        403
                                          ============     ============    ============

Depreciation and amortization expense
     Conversion vehicle products          $        978     $      1,018    $      1,199
     OEM automotive supply                          87                -               -
                                          ------------     ------------    ------------

                                          $      1,065     $      1,018    $      1,199
                                          ============     ============    ============
</TABLE>



The  information  below  contains  information  regarding  significant  customer
concentrations by segment for sales and accounts receivable. The Company has one
significant customer and this customer is the same for both segments.

Sales by segment for this major customer are as follows:

<TABLE>
<CAPTION>
                                            1999            1998             1997
                                            ----            ----             ----
<S>                                   <C>              <C>             <C>
     Conversion vehicle products      $      4,283     $      6,774    $     10,853
     OEM automotive supply                  32,700                -               -
</TABLE>



--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------


NOTE 15 - SEGMENT INFORMATION (Continued)

Significant  customer  concentrations  in accounts  receivable for the Company's
major customer for 1999 are as follows:

                                                                     1999
                                                                 ------------
     Conversion vehicle products                                 $        389
     OEM automotive supply                                             12,914

The Company did not have any significant  customer  concentrations  for accounts
receivable for 1998.


--------------------------------------------------------------------------------
                                   (Continued)

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
           October 3, 1999, September 27, 1998 and September 28, 1997
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 16 - EARNINGS PER SHARE

A  reconciliation  of the numerators and denominators of the earnings per common
share and earnings per common share assuming dilution computations for the years
ended  October 3, 1999,  September  27, 1998 and September 28, 1997 is presented
below.

<TABLE>
<CAPTION>

                                                  1999            1998             1997
                                                  ----            ----             ----
<S>                                           <C>              <C>             <C>
Earnings per share
Net income (loss) available to
  common shareholders                         $        522     $     (6,759)   $    (11,302)
                                              ============     ============    ============
Weighted average common shares
  outstanding                                        4,159            4,134           4,127

Earnings per share                            $       0.13     $     (1.63)    $      (2.74)
                                              ============     ===========     ============

Earnings per share assuming dilution
Net income (loss) available to
  common shareholders                         $        522     $     (6,759)   $    (11,302)
                                              ============     ============    ============

Weighted average common shares
  outstanding                                        4,159            4,134           4,127

Add:  dilutive effects of assumed
  conversions and exercises:
     Incentive stock options                           156                -               -
     Warrants                                          133                -               -
     Other                                               2                -               -
                                              ------------     ------------    ------------
Weighted average common and dilutive
  potential common shares outstanding                4,450            4,134           4,127

Earnings per share assuming dilution          $       0.12     $     (1.63)    $      (2.74)
                                              ============     ===========     ============
</TABLE>


Incentive  stock  options and  warrants,  were not  considered  in  computing of
earnings per common share for 1998 or 1997  because they were  antidilutive.  In
addition  incentive  stock  options on 211,500  shares of common  stock were not
considered  in  computing  of  earnings  per  share for 1999  because  they were
antidilutive.




                                    19 of 22
<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

Previously Reported


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated by reference to the  Registrant's  proxy statement to be filed with
the Securities and Exchange Commission on or before January 7, 2000.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference to the  Registrant's  proxy statement to be filed with
the Securities and Exchange Commission on or before January 7, 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated by reference to the  Registrant's  proxy statement to be filed with
the Securities and Exchange Commission on or before January 7, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the  Registrant's  proxy statement to be filed with
the Securities and Exchange Commission on or before January 7, 2000.



                                    20 of 22
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
         8-K.

(a)      The following documents are filed as part of the report:

         Financial  Statements (as of October 3, 1999 and September 27, 1998 and
         for the fiscal  periods ended October 3, 1999,  September 27, 1998, and
         September 28, 1997):

         Reports of Independent Auditors
         Balance Sheets
         Statements of Operations
         Statements of Cash Flows
         Statements of Shareholders' Equity
         Notes to Financial Statements

(b)      Reports on Form 8-K

         No  reports on Form 8-K were filed by the  Company  during the  quarter
         ended October 3, 1999.

(c)      The exhibits filed herewith or incorporated by reference herein are set
         forth on the Exhibit Index beginning on page E-1.

(d)      The following financial statement schedule is filed as part of this
         report:

         (i)      Valuation and Qualifying Accounts and Reserves.

         All other  schedules  for  which  provision  is made in the  applicable
         accounting  regulations of the  Securities and Exchange  Commission are
         not required under the related  instructions  or are  inapplicable  and
         have been omitted.




                                    21 of 22
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS


Board of Directors
Starcraft Corporation and Subsidiaries
Goshen, Indiana


We have audited the consolidated  financial statements of Starcraft  Corporation
and  Subsidiaries as of October 3, 1999 and September 27, 1998 and for the years
then ended and have issued our report  thereon  dated  November  18,  1999.  Our
audits also  included the  information  for the years ended  October 3, 1999 and
September 27, 1998 in the financial statement schedule listed in Item 14 of this
Annual Report. This schedule is the responsibility of the Company's  management.
Our responsibility is to express an opinion based on our audits.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information as of and for the years
ended October 3, 1999 and September 27, 1998 set forth therein.



                                            /s/ Crowe, Chizek and Company LLP


Elkhart, Indiana
November 18, 1999

<PAGE>

                         Report of Independent Auditors



To the Board of Directors
Starcraft Corporation

We have audited the consolidated  financial statements of Starcraft  Corporation
and  Subsidiaries  for the year ended  September  28,  1997 and have  issued our
report thereon dated January 12, 1998.  Our audit also included the  information
of the year ended September 28, 1997 in the financial  statement schedule listed
in Item 14 of this Annual  Report.  This schedule is the  responsibility  of the
Company's  management.  Our responsibility is to express an opinion based on our
audit.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents  fairly in all materials  respects the  information  for the year ended
September 28, 1997 set forth therein.



                              /s/Ernst & Young LLP

January 12, 1998
Fort Wayne, Indiana

<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                  SCHEDULE II
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                             (Dollars in Thousands)

                                Balance at           Charged to           Deductions from       Balance at Close
                                Beginning of         Operations            Additions to            of Period
                                  Period                                   Reserves (a)

Allowance for doubtful accounts - deducted from accounts  receivable,  trade, in
the consolidated balance sheets:
--------------------------------------------------------------------------------------------------------------------
<S>                                <C>                  <C>                    <C>                    <C>
53 weeks ended                     $ 40                 $ --                   $ --                   $ 40
October 3, 1999

52 weeks ended                     $ 81                 $ --                   $ 41                   $ 40
September 27, 1998

52 weeks ended                     $ 51                 $ 30                   $ --                   $ 81
September 28, 1997
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(a)    Write-off of bad debts, less recoveries.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) the Securities  Exchange Act
of 1934, as amended,  the Registrant has duly caused this report to be signed on
behalf of the undersigned, thereto duly authorized.

                                            STARCRAFT CORPORATION

DATE: December 23, 1999                 By: /s/ Kelly L. Rose
                                            ------------------------------------
                                            Kelly L. Rose,
                                            Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on this 23rd day of December, 1999.

1)            Principal Executive Officer:

       By:    /s/   Kelly L. Rose                 Chairman, Chief
              -----------------------------       Executive Officer
              Kelly L. Rose

2)            Principal Financial/
              Accounting Officer:

       By:    /s/   Michael H. Schoeffler         President, Chief Financial
              -----------------------------       Officer, Treasurer, Secretary
              Michael H. Schoeffler

3)            The Board of Directors:


       By:    /s/   Kelly L. Rose                 Director
              -----------------------------
              Kelly L. Rose

       By:    /s/   David J. Matteson             Director
              -----------------------------
              David J. Matteson

       By:    /s/   Allen H. Neuharth             Director
              -----------------------------
              Allen H. Neuharth

       By:    /s/   G. Raymond Stults             Director
              -----------------------------
              G. Raymond Stults

       By:    /s/   Michael H. Schoeffler         Director
              -----------------------------
              Michael H. Schoeffler





                                    22 of 22

<PAGE>

PART IV

                                  EXHIBIT INDEX

Reference to                                                       Sequential
Regulation S-K                                                       Page
Exhibit Number                      Document                         Number

     3.1       Registrant's  Articles of  Incorporation,  as
               amended. Incorporated by reference to Exhibit
               3.1 to the  Registrant's  Form  10-K  for the
               year ending October 1, 1995.                           *

     3.2       Registrant's  Code of  By-Laws,  as  amended.
               Incorporated  by  reference to Exhibit 3.2 to
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 29, 1996.                        *

     4.1       Article 6 - "Terms of Shares" and Article 9 -
               "Provisions     for     Certain      Business
               Combinations" of the Registrant's Articles of
               Incorporation,  as amended.  Incorporated  by
               reference to Exhibit 3.1 to the  Registrant's
               Form  10-K for the  year  ending  October  1,
               1995.                                                  *

     4.2       Article III - "Shareholder Meetings", Article
               VI -  "Certificates  for  Shares" and Article
               VII - "Corporate  Books and Records - Section
               3" of the  Registrant's  Code of By-Laws,  as
               amended. Incorporated by reference to Exhibit
               3.2 to the  Registrant's  Form  10-K  for the
               fiscal year ending September 29, 1996.                 *

     4.3       Amended and Restated Credit Agreement between
               the  Registrant  and Bank  One  Indianapolis,
               N.A.,  dated November 30, 1994.  Incorporated
               by   reference   to   Exhibit   4.6   of  the
               Registrant's  Form 10-K for the  fiscal  year
               ending October 2, 1994.                                *

     4.4       First   Amendment  to  Amended  and  Restated
               Credit  Agreement  between the Registrant and
               Bank One,  Indianapolis,  N.A. dated March 7,
               1995.  Incorporated  by  reference to Exhibit
               10(2) to the  Registrant's  Form 10-Q for the
               quarter ending April 2, 1995.                          *

     4.5       Second  Amendment  to  Amended  and  Restated
               Credit  Agreement dated April 6, 1996,  among
               Starcraft  Corporation,  Starcraft Automotive
               Group, Inc.  Imperial  Automobile Group, Inc.
               and Bank One, Indianapolis, N.A. Incorporated
               by  reference to the  Registrant's  Form 10-Q
               for the Quarter Ended March 31, 1997.                  *

     4.6       Third   Amendment  to  Amended  and  Restated
               Credit Agreement, effective January 31, 1997,
               among   Starcraft   Corporation,    Starcraft
               Automotive Group, Inc.,  Imperial  Automobile
               Group, Inc. and Bank One, Indianapolis,  N.A.
               Incorporated by reference to the Registrant's
               Form  10-Q for the  Quarter  Ended  March 31,
               1997.                                                  *

     4.7       Fourth  Amendment  to  Amended  and  Restated
               Credit  Agreement,  effective  June 29, 1997,
               among   Starcraft   Corporation,    Starcraft
               Automotive Group, Inc.,  Imperial  Automobile
               Group, Inc. and Bank One, Indianapolis,  N.A.
               Incorporated  by  reference to Exhibit 4.7 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 28, 1997.                        *

     4.8       Fifth   Amendment  to  Amended  and  Restated
               Credit  Agreement,   effective  December  31,
               1997, among Starcraft Corporation,  Starcraft
               Automotive Group, Inc.,  Imperial  Automobile
               Group, Inc. and Bank One, Indianapolis,  N.A.
               Incorporated  by  reference to Exhibit 4.8 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 28, 1997.                        *

<PAGE>


     4.9       Seventh  Amendment  to Amended  and  Restated
               Credit  Agreement,  dated as of February  27,
               1998 , among Starcraft Corporation, Starcraft
               Automotive Group, Inc.,  Imperial  Automotive
               Group,  Inc.  and  Bank  One,  Indiana,  N.A.
               Incorporated  by reference to Exhibit 10.1 of
               the  Registrant's  Form 10-Q for the  quarter
               ending March 29, 1998.                                 *

     4.10      Eighth  Amendment  to  Amended  and  Restated
               Credit  Agreement,   effective  November  23,
               1998, among Starcraft Corporation,  Starcraft
               Automotive Group, Inc.,  Imperial  Automobile
               Group, Inc. and Bank One, Indianapolis,  N.A.
               Incorporated  by reference to Exhibit 4.10 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 27, 1998.                        *

     4.11      Rights  Agreement,  dated  as of  August  12,
               1997, between Registrant and Harris Trust and
               Savings Bank,  as Rights Agent.  Incorporated
               by  reference to the  Registrant's  8-A filed
               September 9, 1997.                                     *

     4.12      Promissory  Note  from  Starcraft  Automotive
               Group, Inc. to Bank One, Indiana,  N.A. dated
               November 23, 1998.  Incorporated by reference
               to Exhibit 4.12 of the Registrant's Form 10-K
               for the  fiscal  year  ending  September  27,
               1998.                                                  *

     4.13      Guaranty of Kelly L. Rose to the  obligations
               of Starcraft  Automotive  Group, Inc. to Bank
               One,  Indiana,  N.A. dated November 23, 1998.
               Incorporated  by reference to Exhibit 4.13 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 27, 1998.                        *

     4.14      Guaranty   of   Gerald   R.   Stults  to  the
               obligations  of Starcraft  Automotive  Group,
               Inc.  to  Bank  One,   Indiana,   N.A.  dated
               November 23, 1998.  Incorporated by reference
               to Exhibit 4.14 of the Registrant's Form 10-K
               for the  fiscal  year  ending  September  27,
               1998.                                                  *

     4.15      Loan  and  Security  Agreement  by and  among
               Starcraft  Automotive Group,  Inc.,  National
               Mobility Corporation,  Starcraft Corporation,
               Imperial  Automotive Group, Inc. and Foothill
               Capital Corporation,  dated October 30, 1998.
               Incorporated  by reference to Exhibit 4.15 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 27, 1998.                        *

     4.16      Secured   Promissory   Note  from   Starcraft
               Automotive  Group, Inc. and National Mobility
               Corporation to Foothill  Capital  Corporation
               dated  October  30,  1998.   Incorporated  by
               reference to Exhibit 4.16 of the Registrant's
               Form  10-K  for  the   fiscal   year   ending
               September 27, 1998.                                    *

     10.1(a)   The Starcraft  Automotive  Corporation  Stock
               Incentive Plan.                                        **

     10.1(b)   The   Starcraft    Corporation   1997   Stock
               Incentive Plan.  Incorporated by reference to
               Exhibit 10.1(b) to the Registrant's From 10-K
               for the  fiscal  year  ending  September  29,
               1996.                                                  *

<PAGE>

     10.2      Form of Tax  indemnification  agreement among
               the  Registrant,  Mr.  Kash,  Mr.  Rose,  Mr.
               Newberry and Mr. Hardin, dated as of July 21,
               1993.  Incorporated  by  reference to Exhibit
               10.7   of   the   Registrant's   registration
               statement on Form S-1, Reg. No. 33- 63760.             *

     10.3(a)   Employment Agreement with Kelly L. Rose dated
               December 12, 1996.  Incorporated by reference
               to Exhibit 10.3(b) to the  Registrant's  From
               10-K for the fiscal year ending September 29,
               1996.                                                  *

     10.3(b)   Form  of   First   Addendum   to   Employment
               Agreement  with Kelly L. Rose,  December  31,
               1997.  Incorporated  by  reference to Exhibit
               10.1 of the  Registrant's  Form  10-Q for the
               fiscal year ending March 29, 1998.                     *

     10.3(c)   Second Addendum to Employment  Agreement with
               Kelly L. Rose,  effective  December 15, 1997.
               Incorporated  by reference to Exhibit 10.3(d)
               of the Registrant's  Form 10-K for the fiscal
               year ending September 27, 1998.                        *

     10.3(d)   Consulting  Agreement  with Allen H. Neuharth
               dated  September  15, 1993.  Incorporated  by
               reference   to   Exhibit   10.3(k)   of   the
               Registrant's  Form 10-K for the  fiscal  year
               ending October 2, 1994.                                *

     10.3(e)   Employment  Agreement  between the Registrant
               and Michael H. Schoeffler  dated December 12,
               1996.  Incorporated  by  reference to Exhibit
               10.3(e) to the Registrant's Form 10-K for the
               fiscal year ending September 29, 1996.                 *

     10.4      Inventory Loan and Security  Agreement by and
               between the  Registrant  and  General  Motors
               Acceptance    Corporation,     as    amended.
               Incorporated by reference to Exhibit 10.13 of
               the Registrant's Form S-1.                             **

     10.5      Agreement by and between the  Registrant  and
               General Motors  Acceptance  Corporation dated
               February 7, 1991.  Incorporated  by reference
               to  Exhibit  10.14 of the  Registrant's  Form
               S-1.                                                   **





<PAGE>




     10.6      Authorized  Converter Pool Agreement  between
               the  Registrant  and Ford Motor Company dated
               May  7,  1991  and   amended   May  7,  1991.
               Incorporated by reference to Exhibit 10.17 of
               the Registrant's Form S-1.                             **

     10.7      Wholesale  Financing  and Security  Agreement
               between the  Registrant and Ford Motor Credit
               Company dated April 17, 1991. Incorporated by
               reference    to   Exhibit    10.18   of   the
               Registrant's Form S-1.                                 **

     10.8      Intercreditor  Agreement  between  Ford Motor
               Credit  Company  and Bank One,  Indianapolis,
               N.A.  dated July 17,  1992.  Incorporated  by
               reference    to   Exhibit    10.20   of   the
               Registrant's Form S-1.                                 **

     10.9      Truck   Consignment   Agreement  between  the
               Registrant  and  Chrysler  Corporation  dated
               August 29, 1991. Incorporated by reference to
               Exhibit 10.21 of the  Registrant's  Form S-1.          **

     10.10     License   Agreement   by  and   between   the
               Registrant  and   AlliedSignal,   Inc.  dated
               February 18, 1993.  Incorporated by reference
               to  Exhibit  10.22 of the  Registrant's  Form
               S-1.                                                   **

     10.11     Agent    Agreement   by   and   between   the
               Registrant,  Mitsui & Co. (U.S.A.),  Inc. and
               Mitsui  & Co.,  Ltd.  dated  March  1,  1993.
               Incorporated by reference to Exhibit 10.23 of
               the Registrant's Form S-1.                             **

     10.12     License   Agreement   by  and   between   the
               Registrant   and  Starcraft  RV,  Inc.  dated
               September 12, 1991. Incorporated by reference
               to  Exhibit  10.24 of the  Registrant's  Form
               S-1.                                                   **

     10.13     License   Agreement   by  and   between   the
               Registrant    and   Starcraft    Recreational
               Products,   Ltd.   dated  January  18,  1991.
               Incorporated by reference to Exhibit 10.25 of
               the Registrant's Form S-1.                             **




<PAGE>




     10.14(a)  Directors'  Share  Plan,  restated  effective
               October 1, 1995. Incorporated by reference to
               Exhibit  10.16(a)  of the  Registrant's  Form
               10-K for the year ending October 1, 1995.              *

     10.14(b)  Directors'    Compensation    Deferral   Plan
               effective  October 1, 1995.  Incorporated  by
               reference   to   Exhibit   10.16(b)   of  the
               Registrant's  Form  10-K for the year  ending
               October 1, 1995.                                       *

     10.15     Intercreditor   Agreement   between   General
               Motors  Acceptance  Corporation  and Bank One
               Indianapolis,   N.A.  dated  July  15,  1994.
               Incorporated by reference to Exhibit 10.24 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending October 2, 1994.                           *

     10.16     GMC  Truck  Special   Vehicle   Manufacturers
               Agreement by and between Starcraft Automotive
               Group,  Inc. and GMC Truck Division,  Truck &
               Bus Group,  General Motors  Corporation dated
               February 1, 1995.  Incorporated  by reference
               to  Exhibit  10.21 of the  Registrant's  Form
               10-K for the year ending October 1, 1995.              *

     10.17     Guaranty of Starcraft  Automotive Group, Inc.
               to the  obligations of Starcraft  Corporation
               to  General  Motors  Acceptance   Corporation
               dated  February  9,  1995.   Incorporated  by
               reference    to   Exhibit    10.23   of   the
               Registrant's  Form  10-K for the year  ending
               October 1, 1995.                                       *

     10.18     Guaranty of Starcraft  Automotive Group, Inc.
               to the  obligations  of  Imperial  Automotive
               Group,   Inc.to  General  Motors   Acceptance
               Corporation    dated    February   9,   1995.
               Incorporated by reference to Exhibit 10.25 of
               the Registrants Form 10-K for the year ending
               October 1, 1995.                                       *

     10.19     Chevrolet Quality Approved Converters Program
               Agreement by and between Starcraft Automotive
               Group,  Inc. and  Chevrolet  Motor  Division,
               General  Motors  Corporation  dated April 10,
               1995.  Incorporated  by  reference to Exhibit
               10.27 of the  Registrant's  Form 10-K for the
               year ending October 1, 1995.                           *





<PAGE>



     10.20     Agreement  between  Chrysler  Corporation and
               Starcraft  Automotive  Group, Inc. dated July
               1, 1995. Incorporated by reference to Exhibit
               10.29 of the  Registrant's  Form 10-K for the
               year ending October 1, 1995.                           *

     10.21     Pool  Company   Wholesale  Finance  Plan  and
               Security  Agreement  between  Chrysler Credit
               Corporation and Starcraft  Automotive  Group,
               Inc.  dated  July 1,  1995.  Incorporated  by
               reference    to   Exhibit    10.30   of   the
               Registrant's  Form  10-K for the year  ending
               October 1, 1995.                                       *

     10.22     Warrant to Purchase  200,000 Shares of Common
               Stock of  Starcraft  Corporation,  issued  to
               Kelly  L.  Rose,  dated  November  23,  1998.
               Incorporated by reference to Exhibit 10.33 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 27, 1998.                        *

     10.23     Warrant to Purchase  200,000 Shares of Common
               Stock of Starcraft Corporation,  issued to G.
               Ray  Stults,   dated   November   23,   1998.
               Incorporated by reference to Exhibit 10.34 of
               the  Registrant's  Form  10-K for the  fiscal
               year ending September 27, 1998.                        *

     21        Subsidiaries of the Registrant.                        [ ]

     23.1      Consent of Crowe,  Chizek and Company LLP.             [ ]

     23.2      Consent of Ernst & Young LLP.                          [ ]

     27        Financial Data Schedule                                [ ]
---------------

*        Incorporated by reference as indicated in the description.

**       Incorporated  by reference to the  exhibit,  bearing the  corresponding
         exhibit number to the Registrant's  registration statement on Form S-1,
         Reg. No. 33-63760, unless another exhibit number is listed in the above
         description.