UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20547


                                    FORM 10-K


(Mark One)

X    Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

For the fiscal year ended September 29, 1996

                                       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                              35-1817634
         (State or other Jurisdiction                 (I.R.S. Employer
         of Incorporation or Organization)           Identification No.)

P.O. Box 1903, 2703 College Avenue, Goshen, Indiana           46526
(Address of Principal Executive Offices)                    (Zip Code)

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
                                (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.

The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of December 27, 1996, was $14,415,100.

The  number of shares of the  Registrant's  Common  Stock,  without  par  value,
outstanding as of December 27, 1996, was 4,118,600 shares.


                            Exhibit Index on Page ___

                               Page 1 of ___ Pages


<PAGE>



                              STARCRAFT CORPORATION
                                    FORM 10-K
                                      INDEX

                                     PART I

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 Operation          
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                                                            

<PAGE>



                                     PART I

Item 1. BUSINESS.

Overview

         The Company is a leading second-stage manufacturer of custom van, sport
utility vehicle ("SUV") and pickup truck conversions. Starcraft has historically
specialized in upscale custom vehicles.  With the addition of the Imperial Group
("Imperial")in  1994, the Company offers a full range of conversion  vehicles at
every consumer price point.  The Company  believes it is one of the five largest
van  conversion  manufacturers  in the U.S. The Company sells its products to an
extensive  network  of  approximately   1,000  authorized   automotive   dealers
throughout the continental U.S. and overseas. The Company believes the Starcraft
name has a long-standing  reputation in the vehicle conversion industry for high
quality.

         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. The resulting entity
was highly  leveraged  and  eventually  sought  protection  from  creditors in a
bankruptcy  reorganization  proceeding  in late 1990.  On January 18, 1991,  the
Company  purchased  the  assets  of  the  automotive  and  recreational  vehicle
divisions  (except for  Canadian  operations)  from  Starcraft  Van  Conversions
Corporation and its affiliates,  as  debtors-in-possession  (the "Predecessor"),
with bankruptcy court approval.  The Company simultaneously sold the RV division
to a third party. In July 1994, the Company's wholly owned subsidiary,  Imperial
Automotive  Group,  Inc.  acquired  substantially  all of the assets of Imperial
Industries,  Inc.  In December  1995,  the Company  expanded  its  manufacturing
capabilities  with  a new  plant  in  McGregor,  Texas,  operated  by  Starcraft
Southwest, Inc., a wholly owned subsidiary.

         The Company was  incorporated  in Indiana in 1990 to acquire the assets
of the  Predecessor.  Its executive  offices are located at 2703 College Avenue,
Goshen,  Indiana,  46526;  telephone   (219)533-1105.   The  Company  has  three
wholly-owned operating subsidiaries:  Starcraft Automotive Group, Inc.; Imperial
Automotive Group, Inc. and Starcraft Southwest, Inc.

         Starcraft's principal manufacturing  facilities are in Goshen, Indiana,
and, as of December 1995, McGregor, Texas, and it produces upholstery components
at a facility in Emma,  Indiana.  The Company  consolidated its Elkhart facility
into its Goshen facility in December 1996. See "Item 2.
Properties."

Industry Information

         The custom  conversion  industry  developed  during  the early  1970's.
Starcraft's Predecessor was a leader in transforming the industry from one


<PAGE>



oriented  toward younger  recreational  users to one oriented toward more mature
automotive  customers.  The Company believes retail prices of custom vans in the
United States for the 1996 model year generally  ranged from $20,000 to $40,000.
Retail  mark-ups  vary widely  among  dealers  and are not within the  Company's
control.

         According to the Recreational  Vehicle Industry  Association  ("RVIA"),
the average  domestic  wholesale  price to dealers of a van  conversion,  pickup
truck  conversion and SUV conversion  (including  chassis) during the first nine
calendar months of 1996 were $24,000, $20,200 and $29,000, respectively. Because
the Company emphasizes high-end,  luxury vehicles,  Starcraft's average domestic
wholesale price to dealers during fiscal 1996, was $25,700,  assuming an average
cost of chassis  to  dealers  of  $18,000.  Imperial's  and  Lonestar's  average
wholesale  price to  dealers  during  fiscal  1996  were  $21,000  and  $22,000,
respectively assuming an average cost of chassis to dealers of $17,500.

         According to RVIA  statistics,  approximately  151,000 custom vans were
sold by United States conversion  manufacturers during calendar 1995 compared to
182,000,  192,000, and 179,000 units in 1994, 1993 and 1992, respectively,  RVIA
reported sales of 119,000 units through  September  1996 and estimates  sales of
custom vans for calendar 1996 will total 144,000,  a 5% decrease from prior year
levels.  In 1995, RVIA began tracking pickup truck and SUV conversions.  For the
nine months  ended  September  1996,  58,400 of such  vehicles  were sold by the
conversion industry compared to 54,500 in 1995.

         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 80%-85% of conversions produced in the United States.

         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.  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.  In 1996 the
Company's  sales were  adversely  impacted  by the  availability  of certain OEM
chassis.

<PAGE>


Company Products

         The Company  converts  fullsize vans  manufactured by each of the major
original equipment manufacturers ("OEMs"): GMC Truck, Chevrolet, Dodge and Ford.
The Company  manufactures  minivan  conversions on the GMC Safari, the Chevrolet
Astro and the Dodge Caravan.  Starcraft also customizes Chevrolet and GMC SUV's,
along with several pickup truck models for GMC,  Chevrolet,  Ford and Dodge. The
Company  currently offers several fullsize van and minivan models.  Each vehicle
model contains a principal set of conversion  features and a variety of optional
accessories  designed  by the  Company  in each  model  year to meet  prevailing
customer  preferences.  Starcraft van models fall  principally  into three price
ranges  (conversion  cost to dealer):  from  $4,000-$6,000,  $6,000-$9,000,  and
$9,000 and above.  Imperial and Lonestar  models fall into the  following  price
ranges:  $2,000-3,000,  $3,000-4,000,  over $4,000.  These price ranges  provide
marketing  flexibility  allowing for different  demographics  and varying dealer
marketing  objectives.  Certain SUV and pickup truck conversion  packages may be
priced below these ranges.

Operating Data

         The following sets forth  information  respecting  the Company's  gross
sales by product type (including  Imperial after July 5, 1994 and Lonestar after
December 1, 1995) for the fiscal periods indicated.

                            GROSS SALES BY PRODUCT(1)

<TABLE>
<CAPTION>


                                                                Period Ended
                    September 29, 1996                        October 1, 1995                        October 2, 1994
                       (52 weeks)                                 (52 weeks)                            (52 weeks)
              ---------------------------------     -------------------------------------    ------------------------------------
                                                            (Sales in Thousands)

                      Average                                 Average                                   Average
                        Price/   Gross   % of                  Price/    Gross     % of         Price/ Gross  % of
                Units   Unit     Sales   Sales       Units     Unit      Sales     Sales      Units   Unit    Sales     Sales
                -----   ----     -----   -----       -----     ----      -----     -----      -----   ----    -----     -----

<S>              <C>    <C>      <C>        <C>        <C>     <C>       <C>         <C>      <C>     <C>      <C>         <C>  
Fullsize vans    8,085  $6,600   $53,300    50.1%      9,041   $7,500    $67,600     54.8%    7,888   $7,800   $61,800     63.3%
Minivans         4,676   8,200    38,300    36.0       4,894    8,300     40,700     33.0     3,045    7,600    23,200     23.7
Trucks and
 SUVs            3,345   3,200    10,700    10.0       3,009    3,400     10,300      8.4     2,078    4,300     9,000      9.2
Parts              N/A     N/A     4,200     3.9         N/A      N/A      4,700      3.8       N/A      N/A     3,700      3.8
                   ---             -----                 ---      ---      -----      ---       ---      ---     -----      ---
Total           16,106          $106,500   100.0%     16,944            $123,300    100.0%   13,011            $97,700    100.0%
                ======          ========   =====      ======            ========    =====    ======             ======    =====
-----------
</TABLE>

(1)      Gross dollar  sales  represent  the price to dealers of the  conversion
         before discounts and exclude the cost of the chassis.

Company Strategy

         The Company  believes it can continue to grow by expanding its domestic
van  conversion  business,   increasing  its  sales  of  pickup  truck  and  SUV
conversions and further developing international sales opportunities.


<PAGE>

         Domestic  Van Sales.  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 custom 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 versus unit price. With the Imperial
acquisition,  the Company is in position to participate  in the rapidly  growing
price-sensitive  segment of its van  conversion  market.  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.  The
establishment  of the Lonestar  facility  offers the  opportunity  for strategic
development  in the Southwest,  particularly  Texas.  The Company  believes this
operation creates a competitive price advantage by reducing freight costs.

         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,  and  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.  Starcraft is expanding its use of regional  service  clinics,
regional and dealer-specific sales seminars and dealer plant visits.

         Domestic Truck and SUV Conversions.  Although the Company's conversions
of General  Motors'  Suburban,  other SUV and pickup  trucks have proven to be a
popular  line of  products,  limited  chassis  availability  has  inhibited  the
Company's  sales of these  products.  The Company intends to expand its sales of
non-van  custom  vehicles,  especially  luxury  custom  pickup  trucks,  and has
designed conversion packages especially for these vehicles. In 1996, the Company
added the GMC Jimmy,  Chrysler  Jeep and a variety of pickup  truck  lines.  The
general  market in the U.S.  for pickup  trucks and SUVs has been  strong in the
last three model years.  The Company  expects this strong market to continue and
is  working  with  the  OEMs to help  assure  the  availability  of  chassis  in
sufficient  quantity to meet its  expanding  requirements.  In  particular,  the
Company is  exploring  opportunities  to develop and  produce  special SUV upfit
packages  for  General  Motors  and the  other  OEMs.  See  "Chassis  and  Other
Suppliers."  Starcraft  Southwest will address the increasing  market demand for
SUVs,  pickup  trucks and  Suburbans in the  southwest  with  increased  chassis
allocation of such vehicles.

         International  Vehicle Sales.  The Company  intends to further  promote
Starcraft vehicles overseas,  especially in  Central/Northern  Europe and Japan.
The Company has an European parts center owned and operated by a

<PAGE>



German corporation  affiliated with Starcraft's  Norwegian dealer to improve its
service to German customers. The Company maintains a distribution agreement with
General Motors and Mitsui & Co. (U.S.A.),  Inc. which the Company believes makes
Mitsui  the sole  distributor  of  General  Motors  vans in  Japan.  Under  this
agreement  Mitsui  agreed to use its best efforts to promote  Starcraft  vans in
Japan and  Starcraft  agreed to sell van  conversions  in Japan  solely  through
Mitsui.

Chassis and Other Suppliers

         Historically,  most of the Company's van conversions  have been General
Motors products.  In 1991,  approximately 92% of its unit sales were represented
by General Motors.  Approximately one-half of the Company's General Motors units
are received from each of the Chevrolet Motors and GMC Truck divisions.  Between
calendar years 1991 and 1995, Ford and Chrysler products collectively  increased
from 8% to 26% of  domestic  unit sales and were 33% of  domestic  unit sales in
1996. The increase in the proportion of the Company's sales  represented by Ford
and Chrysler  products  was due  primarily to dealers  reducing  General  Motors
fullsize vans as well as aggressive  promotional  activities  carried on by Ford
and Chrysler.

         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.  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

 
<PAGE>



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,  Starcraft's  international  conversion  sales  have been
chassis  originally  manufactured  by General  Motors.  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 has changed its chassis system for the
Company's sales to Europe.  The Company will be the "Manufacturer of Record" for
units  imported  into Europe and will be required to arrange and be  responsible
for all U.S. export and shipping requirements. The Company will continue to sell
only to authorized General Motors dealers. The Company does not believe this new
system will have a significant impact on its European sales.

         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.


<PAGE>

         The following table sets forth for the periods  indicated the number of
chassis received by the Company 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 in
thousands thereof.

<TABLE>
<CAPTION>
                                                                                Period Ended
                                            ------------------------------------------------------------------------------
                                            September 29, 1996                  October 1, 1995            October 2, 1994
                                                (52 weeks)                          (52 weeks)                (52 weeks)
                                             -----------------                   ----------------          -------------
                                                                       (Dollars in thousands)
<S>                                                <C>                              <C>                       <C>   
Chassis Received                                      17,179                             17,419                   13,647
Value of Chassis Received(1)                        $305,300                           $309,800                 $223,800
Chassis over 90 days (at period end)                     262                                491                      155
Value of Chassis held over 90 days(1)               $  4,615                          $   8,712                 $  2,713
</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.  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.  The impact of these  factors was
significant in 1996. 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.

         General  Motors  introduced  a newly  redesigned  fullsize van in early
calendar 1996. The Company  believes  dealers reduced their inventory  levels in
1995 in  anticipation  of the  new  chassis  thereby  negatively  impacting  the
Company's sales to dealers. In addition, the Company believes the

                                                                 9

<PAGE>


availability of the newly redesigned  General Motors fullsize van restricted and
negatively  impacted  the  Company's  1996  sales.  At  the  end  of  1996,  the
availability of this chassis to the Company was adequate.

         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,  especially
for General Motors.  In the past, some automotive  dealers have sold vehicles to
brokers who, in turn, have sold them to unauthorized  dealers overseas.  General
Motors' financing subsidiary has 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.  General Motors has significantly increased its efforts to
curtail such activity.  The Company has no control over the eventual disposition
of its vehicles by dealers,  however,  so it cannot eliminate the possibility of
unauthorized  export.  These  efforts  nevertheless  should help assure that the
Company will not be deemed responsible for any unauthorized export.

         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, but such delays have not historically had any material
effect on the Company's production.

Manufacturing

         The incomplete van chassis  Starcraft  receives  directly from the OEMs
have no seats or floor covering or other interior components. Starcraft modifies
the exterior and interior of the chassis body to provide  passenger  comfort and
enhance  safety.  SUVs  and  pickup  trucks  received  have  full  interior  OEM
components.  The Company modifies these components and performs certain exterior
enhancements.

         Vehicle  Modification  and  Assembly.  After a chassis is inspected and
accepted,  the Company  begins the  conversion  process by modifying the chassis
exterior,  installing tinted vista bay windows,  raised roof,  decorative decals
and  ground  effects.  Star-structure  steel  bracing  is  installed  for  added
structural support, followed by rust proofing,  wiring, insulation and vibration
dampening materials.

         After  exterior  seals are tested for leaks,  the vehicle is lined with
fabric and  wood-accented  sidewalls and  headliners.  The Company's  associates
assemble the complete  vehicle  interior in multiple  production lines using the
Company's own manufactured components and parts supplied by

                                                                 10

<PAGE>



others. The Company's distinctive hardwood features, contoured seats, carpeting,
curtains  and other  amenities  are  installed in each  vehicle,  along with the
customer's  selection  from  over 100  optional  accessories,  including  a wide
variety of  electronic  components  such as rear  heating and  air-conditioning,
television, video cassette player and other audio equipment.

         Vehicle  Components.   The  Company   manufactures  its  own  woodwork,
upholstery and wiring harnesses, among other components. Starcraft's distinctive
hardwood  interior  appointments  are manufactured at the Goshen facility in its
45,000  square-foot  woodshop.  The Company  planes,  joins,  shapes,  sands and
finishes rough-cut teak and walnut lumber in a process that combines  automation
and hand craftsmanship.  A wood-burning laser is utilized which can transfer any
image directly onto wood components for added customization.

         Vehicle  seating  and  upholstery  are  primarily  manufactured  at the
Company's Emma,  Indiana,  facility,  located 15 miles from its Goshen,  Indiana
plant  and 25 miles  from  the  Imperial  Elkhart  facility,  although  interior
sidewall  and  headliner  coverings  are  tailored  at the  Goshen  and  Elkhart
facilities. Company associates cut and sew interior wall coverings,  headliners,
curtains and seat upholstery from leather,  cloth and vinyl materials.  The seat
padding and  upholstery  are then assembled on  pre-fabricated  frames.  Some of
Starcraft's  wire harnesses are  manufactured  at the Goshen plant.  The Company
also paints and finishes all of its custom  fiberglass and polymer  vehicle body
components,  such as raised roofs, running boards and other ground effects which
are manufactured to the Company's design  specifications by others.  The Company
maintains  an  enclosed  painting  system  to  provide  fiberglass  and  polymer
components   with  high  quality  base  coat  and  clear  coat  finishes.   This
water-filtered,  down draft  system is similar to those of the major  automotive
manufacturers and is designed to control environmentally harmful emissions.

         By  manufacturing  many of its own  components,  the Company is able to
exercise  significant  control over the quality and supply of  components  built
into its  custom  vehicles  and to  accommodate  a wide  range of  customization
demands.  The Company is also able to provide consumers with ongoing service and
repair  capabilities  by  maintaining  a record of, and access to  supplies  of,
paint, upholstery and other materials used to modify each vehicle.

         Imperial does not  manufacture  many of its internal  components and is
primarily  an  assembler.  To  compete  in the  price-sensitive  market  segment
Imperial's strategy has been to purchase components from suppliers to reduce its
fixed costs. Imperial purchases some seating and interior shades from Starcraft.

         Lonestar purchases substantially all of its components.

         Production  Associates.  The  Company  periodically  employs  associate
training that may include classroom instruction, job certification and technical
and personal skills training. The principal objective of the

<PAGE>



training  is to  develop  associates  into  more  effective  members  of a  team
dedicated to continuous  improvement  in all facets of the  Company's  business.
Starcraft  production  line  associates are  compensated on an hourly basis with
additional incentive tied to quality and productivity. Imperial's and Lonestar's
employees are divided into departments  whose  compensation  include  incentives
based primarily on productivity.

         The Goshen facility  produced 45 custom  vehicles per eight-hour  shift
during  peak  production  periods  in  1996  and  (prior  to the  reorganization
described  below) has  capacity  to  produce  up to 70 units in one  shift.  The
110,000-square-foot   Imperial   facilities   in   Elkhart,   Indiana   produced
approximately  35  vehicles  per  shift  during  peak  periods  in 1996 and have
capacity to produce up to 50 units per shift.  The new McGregor,  Texas facility
has a capacity of 30 units per shift and produced 15 units per shift during peak
times in 1996.

         In October  1996 the  Company  finalized  its plan to  consolidate  the
operations of Imperial into Starcraft's manufacturing complex in Goshen,Indiana.
The Goshen  facility  has been  reorganized  to allow a  production  capacity of
Starcraft  and  Imperial  units of 95 units  per day on one  shift.  The plan is
designed to further  enhance  profitable  growth by reducing  excess  production
capacity,  personnel count and fixed overhead  expenses.  The Company  estimates
that a  $700,000  pretax  restructuring  charge in  connection  with this  plant
consolidation  will be  recorded in the first  quarter of fiscal year 1997.  The
charge includes employee  termination costs,  leasehold asset write-offs and the
recognition of contractual lease obligations.

Sales and Marketing

         Domestic.  The Company sells its custom vehicles to approximately 1,000
automobile dealers throughout the continental U.S. and overseas. Custom vehicles
are 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, SUVs and vans. Starcraft's top 50 dealers accounted for approximately 59%,
51%  and 45% of  unit  sales  in  fiscal  1996,  1995  and  1994,  respectively.
Imperial's  top 50  dealers  accounted  for  approximately  67% of unit sales in
fiscal  1996  compared  to 71% in fiscal  1995.  During the past two years,  the
geographic  areas of the U.S.  where the  Company's  sales  have been  strongest
include (i) the Great Lakes region (i.e., Illinois, Indiana, Michigan, New York,
Ohio, Pennsylvania,  and Wisconsin),  (ii) Oklahoma and Texas and (iii) Northern
California.

         The  Company's  direct sales efforts to dealers are  supplemented  by a
variety of advertising and promotional  programs  including shows and promotions
designed to appeal to the retail market,  media  advertising,  dealer  incentive
programs and  participation  in various  automobile  shows.  The Company is also
refining a targeting  approach to better  utilize  advertising  expenditures  by
expanding  its team selling  efforts and  developing  new  marketing  materials,
including videos.

<PAGE>




         International.  Starcraft's  Predecessor,  in conjunction  with General
Motors dealers overseas,  began selling custom vans overseas in 1987.  Starcraft
now exports  converted  vehicles to 17 countries  around the world and employs a
senior vice  president who is  exclusively  responsible  for the  development of
international  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,  Korea and northern  Europe.  The Company  exported
2,543, 2,195 and 1,329 conversions in fiscal 1996, 1995 and 1994, respectively.

         The Company intends to further promote  Starcraft and Imperial vehicles
overseas.  The Company maintains a European parts center owned and operated by a
German corporation  affiliated with Starcraft's  Norwegian dealer to improve its
service to German customers. The Company maintains a distribution agreement with
General  Motors and Mitsui by which the Company  believes  makes Mitsui the sole
distributor of General  Motors vans in Japan.  This agreement will continue from
year-to-year  unless  terminated  on three months notice prior to the end of any
such year. 

         Imperial and Lonestar currently have minimal export sales.

Research and Development

         The Company  continues to devote  efforts and  resources in the area of
research  and  development  to improve  the  appeal and safety of its  products.
Starcraft believes it has a strong record of innovative  product  development to
enhance  customer  appeal and vehicle  quality.  For example,  it introduced the
"Star-Effects"   package   in   September   1992.    Star-Effects   employs   an
impact-resistant  polymer to  produce  van ground  effects  (running  boards and
adjacent areas) with more appealing streamlined styling.

         The  Company  has a patent on a system  called the  Integrated  Belting
System  ("IBS").  Upon a rear-end  collision  in excess of 20 m.p.h.,  passenger
seats in many vehicles can collapse  backward,  increasing the risk of injury to
vehicle occupants. IBS is designed to reduce significantly the risk of seat back
collapse  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.

         IBS has been  successfully  tested by an independent  testing firm. The
Company  believes that only one other automotive  manufacturer  currently offers
seats  with a safety  feature  designed  to  prevent  collapse  on rear  impact.
Eventually,   the   Company   intends  to  license  the  use  of  IBS  by  other
manufacturers.  There is no  assurance,  however,  as to the  extent IBS will be
employed by other manufacturers.

<PAGE>

         To meet new NHTSA standards, the Company developed its "Star-structure"
steel bracing system.  "Star-structure" is installed throughout a van's roof and
sidewalls  and is designed  to absorb  impact in the event of a  collision.  The
extent of potential impact absorption  varies between OEM chassis.  See "Patents
and Trademarks" and "Safety and Regulation."

         The Company has  product  research  and  development  teams  devoted to
design and safety  improvements.  During fiscal 1996, 1995 and 1994, the Company
spent approximately $893,000,  $726,000 and $792,000,  respectively,  on product
research and development.

Competition

         The United States vehicle  conversion  market is very  competitive with
five  principal   national   manufacturers   and  numerous  local  and  regional
manufacturers,  many of which  are  relatively  small  companies  serving  local
dealers.  The  Company  believes it is one of the five  largest  van  conversion
companies in the United States. The others are Glaval Inc., Mark III Industries,
Inc., Tiara Motor Coach and Explorer Van Company.  The Company's Starcraft lines
generally feature high-end,  luxury custom vehicles competing most directly with
Explorer and Tiara.  The Imperial  product  lines  compete more  directly in the
price-sensitive segment of the van conversion market. According to the OEMs, the
number of authorized  converters  declined 8% in 1996. The Company  believes the
number of competitors will continue to decline as increased  quality,  financial
and engineering standards are imposed by the OEMs.

         In  international  markets,  the Company competes with numerous foreign
manufacturers  that produce  vehicles  comparable  to converted  vans,  although
custom  vans such as the  Company's  tend not to be widely  produced  within its
foreign markets.

         The  Company's  Starcraft  lines will  continue to be focused on luxury
vehicle modifications and will seek to increase its market share of high-end van
conversions  for  which  Starcraft  vehicles  have  an  established  reputation.
Starcraft will also continue to be sensitive to changes in consumer preferences.
The Imperial  product lines enable the Company to participate  more fully in the
rapidly growing  price-sensitive  segment of the conversion market and offer its
dealers a full price range of  conversion  vehicles from one  manufacturer.  The
Company believes  competitive factors in its industry include price, quality and
variety of product line,  service and warranty,  dealer network and safety.  The
Company  maintains a leading  position in the conversion  industry  through high
quality   workmanship,   innovation,   versatility   in  meeting   customization
requirements and the diversity of its product line.

Backlog and Seasonality

         At September  29, 1996,  the Company had a backlog of 1,067 unit orders
compared  with a backlog of 1,016 unit  orders at October 1, 1995.  The  Company
considers such orders to be reasonably firm. All of the Company's

<PAGE>



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.

Warranties

         The Company provides a three-year,  36,000 mile limited warranty on its
conversions.  In 1997, the Starcraft  products will offer a 5-year,  60,000 mile
warranty.  The OEMs  provide  their own standard  warranties  of the chassis and
engine. At the time of sale of its products,  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 stylings
included in each vehicle  conversion so that, when  necessary,  it can re-create
matching replacement parts.

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. See "Research and Development."

         Trademarks.  The Company's Predecessor  manufactured boats, motor homes
and  other  recreational  vehicles  under  the  name  "Starcraft."(R)  The  boat
manufacturing  business was sold by the Predecessor to Brunswick  Corporation in
1988. The Company  initially  acquired the recreational  vehicle business in the
Predecessor's 1991 reorganization  proceeding, but immediately sold it to Jayco,
Inc. The Predecessor's  Canadian  conversion business was acquired by a Canadian
firm.   Brunswick   Corporation  has  independently   registered  and  owns  the
"Starcraft"  and related  trademarks for use with boats and marine  products and
thus  Starcraft 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 does not export to Canada and its Canadian  licensee does not export
to the United States.


<PAGE>

         Because   of  these   considerations,   there   is  a  risk   that  the
distinctiveness  of the  "Starcraft"  mark  could  become  diluted  or that  its
reputation  for quality  could be  adversely  affected if the quality of another
manufacturer's  products  sold under the mark  declines.  The Company  believes,
however,  that customers are  sufficiently  discerning when making a purchase as
significant  as a vehicle  conversion  that  confusion  between  the Company and
makers of other "Starcraft" products is unlikely. It also believes its licensees
are  currently  in  compliance  with  their   obligations  under  their  license
agreements.

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 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 were promulgated by the NHTSA in
1992.  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  have been  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 is likely to promulgate new standards in
the  future  respecting  one or more of the  following  matters,  among  others:
occupant protection in vehicle rollovers, mandatory installation of air bags and
side impact protection.

         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. For example, in Japan and Germany each
vehicle  conversion is individually  inspected by local  authorities  before the
vehicle is registered in the country.

         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

<PAGE>



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 September 29, 1996,  the Company  employed 899 people.  Of these,
approximately  694 were  production line associates and 205 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.

         The Company maintains a training and education  process.  The principal
goal  of this  program  is to  build a  team-based  learning  organization  that
develops the combined  skills of associates.  Management  believes this approach
promotes  a  culture   conducive  to  participation  and  teamwork  that  breeds
innovation and improved performance. The process includes personal and practical
skills training, and technical and development training. The Company has applied
for and  received  matching  grants  from the State of Indiana  for part of this
training effort.

Item 2.                    PROPERTIES.

         The Company owns its properties in Goshen, and Emma, Indiana and leases
the Elkhart properties, as further described below.

Location               Size of facility     Type of operation

Goshen, Indiana        454,400 Sq. ft.      Executive Offices (20,420 sq. ft.);
                                            Manufacturing and Assembly
Emma, Indiana           42,700 Sq. ft.      Sewing and Upholstery
                                            Manufacturing
Elkhart, Indiana       110,000 Sq. ft.      Offices (20,900 sq. ft.);
(Imperial)                                  Manufacturing and Assembly

Elkhart, Indiana        12,500 Sq. ft.      Offices (1,500 sq. ft.)
(Imperial Truck                             Manufacturing and Assembly
  Plant)

McGregor, Texas         60,000 Sq. ft.      Offices (10,000 sq. ft.)
(since November 1995)                       Manufacturing and Assembly


<PAGE>


         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 Company also stores chassis on a 37-acre lot it owns near its
Goshen production facility. The Goshen facility produced 45 units per day during
peak  production  periods in 1996 (and,  prior to the  reorganization  described
below,  has estimated  capacity to produce  approximately 70 units per day). See
"Manufacturing."

         The first  Elkhart  facility,  on  approximately  17 acres of land,  is
leased for five years  through  February 15, 1998,  with two,  one-year  renewal
options at the Company's  discretion.  The lease  contains an option to purchase
for $3.45 million.  Monthly rent is $23,900 and the Company is  responsible  for
property taxes and building insurance. The second Elkhart facility is leased for
2 years  through  June  1997.  Rent in the first year is $2,500 per month and is
$3,000 per month in the second  year.  The  McGregor  facility is leased for one
year with nine, one-year options to renew at the Company's discretion.

         In October  1996 the  Company  finalized  its plan to  consolidate  the
operations of Imperial into Starcraft's manufacturing complex in Goshen,Indiana.
The Goshen  facility  has been  reorganized  to allow a  production  capacity of
Starcraft  and  Imperial  units of 95 units  per day on one  shift.  The plan is
designed to further  enhance  profitable  growth by reducing  excess  production
capacity,  personnel count and fixed overhead  expenses.  The Company  estimates
that a  $700,000  pretax  restructuring  charge in  connection  with this  plant
consolidation  will be  recorded in the first  quarter of fiscal year 1997.  The
charge includes employee  termination costs,  leasehold asset write-offs and the
recognition of contractual lease obligations.


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
condition or results of operations.  The Company is subject to product liability
claims arising from traffic  accidents.  The Company maintains product liability
insurance which it currently considers adequate.



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

         Not Applicable.

<PAGE>

                                     PART II

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

         Starcraft commenced its initial public offering of Common Stock on July
21,  1993.  Its Common  Stock is quoted on the  Nasdaq  Stock  Market,  National
Market,  under the  symbol  "STCR."  As of  December  27,  1996,  there  were 87
shareholders of record of Starcraft's Common Stock.

         The following table sets forth the high and low bid prices per share of
Common Stock for the periods indicated.

Quarter Ended                        High                      Low
-------------                        ----                      ---
January 1, 1995                   $ 8.500                   $6.000
April 2, 1995                       9.000                    6.875
July 1, 1995                        8.000                    4.500
October 1, 1995                     6.750                    5.125
Dec. 31, 1996                       6.750                    3.875
March 31, 1996                      5.375                    4.250
June 30, 1996                       5.437                    3.750
Sept. 29, 1996                      5.000                    3.750


                  Source:  Media General Financial Services.

The foregoing quotations reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission and may not represent actual transactions.

         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. During 1996 the company repurchased 53,000 common shares
in the open market for $246,000.  As of December 27, 1996,  153,000  shares have
been  repurchased and additional  shares may be acquired during the remainder of
fiscal 1997 if in the opinion of the management the Company's stock continues to
be undervalued by the market.

         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

<PAGE>



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).


<PAGE>

Item 6.  SELECTED FINANCIAL DATA.


<TABLE>
<CAPTION>
     
                           
                                                   Year Ended
                         --------------------------------------------------------------
(dollars in thousands,     Sept. 29,     Oct. 1,      Oct 2,     Oct 3,      Sept. 27,
except per share data)        1996        1995        1994       1993         1992 (1)
---------------------------------------------------------------------------------------
INCOME   
STATEMENT
DATA     
<S>                      <C>          <C>          <C>         <C>          <C>      
Net sales:
     Domestic            $  73,317    $  91,652    $  81,640   $  75,278    $  69,284
     Export                 25,648       21,408       10,734      10,001        7,169
                            98,965      113,060       92,374      85,279       76,453

Cost of goods sold          83,669       92,692       73,775      68,262       61,101
Gross profit                15,296       20,368       18,599      17,017       15,352
Operating expenses          15,049       15,864       12,505      11,099        9,970
Operating income               247        4,504        6,094       5,918        5,382

Interest (expense)            (293)        (208)          99        (373)        (257)
Other, net                     176          214          104          31          100

Income before taxes            130        4,510        6,297       5,576        5,225

Income taxes/pro forma
   income taxes(2)              20        1,753        2,517       2,241        2,090
Net income/pro forma
   net income            $     110    $   2,757    $   3,780   $   3,335    $   3,135
Weighted common
   shares outstanding        4,142        4,261        4,193       3,512        3,583
Earnings per share       $    0.03    $    0.65    $    0.90   $    0.95    $    0.87

BALANCE
SHEET
DATA

Working capital          $   8,476    $   8,693    $   8,140   $   9,072    $   6,822
Total assets                36,524       34,213       32,772      24,590       18,973
Long-term debt                   0          323          196         209        5,576
Shareholders' equity        21,552       21,688       19,556      14,866        5,558
Book value per share          5.23         5.20         4.58        3.05         1.57
</TABLE>
---------
                                                                                
(1)  Unaudited information.

(2)  For all periods up through July 21, 1993,  the Company was an S Corporation
     for federal and state income tax purposes and, accordingly, was not subject
     to such  taxes.  The pro  forma  information  has been  computed  as if the
     Company  were  subject to federal  and state  income  taxes for all periods
     presented, based on the tax laws in effect during the respective periods.

<PAGE>

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATION.

     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.

1996 Versus 1995
NET SALES

     Net sales for 1996 were $99.0 million, down 12.5% from 1995. Domestic sales
decreased  20.0% to $73.3  million while export sales  increased  19.8% to $25.6
million. Unit sales decreased 4.9% to 16,106 in 1996.

     Domestic  sales  were  hampered  early in the year by the  availability  of
General Motors products,  primarily  attributable to the OEM strike,  production
issues on the  minivan  and the  delayed  introduction  of the newly  redesigned
fullsize  van.  As the Company  historically  relies  heavily on General  Motors
products,  the Company's  unit van shipments  declined 12.7% in 1996 compared to
the industry's decline of 6.5% as reported by the Recreational  Vehicle Industry
Association.  Van conversion sales are being negatively  impacted by the growing
popularity of OEM sport utility vehicles  ("SUVs").  The Company's  shipments of
converted pickup trucks and SUVs increased 11.3% in 1996. International sales in
1996 benefited from the early build of 1997 model minivans for Japan totaling $6
million. Sales to Japan in 1997 are estimated to be $4 million lower as a result
of this early build. 

     The  average  conversion  price  declined  9.3% in 1996 due to a change  in
product sales mix toward pickup trucks and SUVs and the  percentage  increase of
Imperial and  Lonestar  units which  compete  primarily in the entry level price
range.

GROSS PROFIT

     Gross profit margin for 1996 was 15.5% compared to 18.0% in the prior year.
The 1996  decline is due to the impact of fixed  overhead on the lower sales and
approximately  $200,000 of project expenses  incurred on the start-up of the new
Texas facility.

SELLING AND PROMOTION EXPENSE

     Selling and  promotion  expense for 1996  decreased  11.2% to $8.3 million,
primarily  attributable to the reduced sales. Selling and promotion expense as a
percent of sales was 8.4% in 1996 compared to 8.2% in the prior year.

GENERAL AND
ADMINISTRATIVE EXPENSE

     General  and  administrative  expense  was $6.8  million  in  1996,  a 3.4%
increase from 1995. The increase is due to approximately $360,000 of expenses to
start-up the new Texas  facility,  offset by the  successful  implementation  of
several expense-containment strategies including personnel reductions.

INCOME TAX EXPENSE

     The  effective  tax rate on income for 1996 was 15.4%  compared to 38.9% in
the prior year. The effective rate in 1996 benefited from the  implementation of
a foreign sales corporation subsidiary.

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
(dollars in thousands)                                                              1995 to 1996
                                               1996                   1995              Change
------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>       <C>          <C>          <C>    
Net sales                            $  98,965      100.0%   $113,060      100.0%       (12.5%)
Cost of gods sold                       83,669       84.5%     92,692       82.0%        (9.7%)
                                     ---------        ---   ---------        ---         ---- 
Gross profit                            15,296       15.5%     20,368       18.0%       (24.9%)
Selling and promotion expense            8,252        8.4%      9,292        8.2%       (11.2%)
General and administrative expense       6,797        6.9%      6,572        5.8%         3.4%
                                     ---------        ---   ---------        ---         ---- 
Operating income                           247        0.2%      4,504        4.0%       (94.5%)
Interest expense                          (293)      (0.3%)      (208)      (0.2%)       40.9%
Other income, net                          176        0.2%        214        0.2%       (17.8%)
                                     ---------        ---   ---------        ---         ---- 
Income before taxes                        130        0.1%      4,510        4.0%       (97.1%)
Income taxes                                20        0.0%      1,753        1.6%       (98.9%)
                                     ---------        ---   ---------        ---         ---- 
NET INCOME                           $     110        0.1%  $   2,757        2.4%       (96.0%)
                                     =========        ===   =========        ===         ==== 
</TABLE>

<PAGE>
1995 VERSUS 1994
NET SALES

     The Company's net sales for 1995  increased by 22.4% to $113.1 million from
$92.4 million in the prior year. Unit shipments increased to 16,940 in 1995 from
13,000  in  1994.  This  sales  improvement  was  attributable  to the  Imperial
Automotive Group ("Imperial  Group")  acquisition,  which added $20.2 million in
sales on 5,230  incremental unit shipments and additional  export sales of $10.7
million on 870  incremental  units,  offset by an $11.0 million sales decline on
2,160 less units in Starcraft  Automotive Group's  ("Starcraft  Group") domestic
business.

     The Company's average conversion price decreased 6.3% reflecting the impact
of the Imperial  Group  acquisition,  which  competes in a more  price-sensitive
segment of the market. This decline was partially offset by the increased export
sales,  which  carried a higher  average  conversion  price.  Starcraft  Group's
average  conversion  price in 1995 was $8,500  compared  to $3,700 for  Imperial
Group.

     Industry domestic  conversion  shipments declined 12.3% in 1995 as reported
by the  Recreational  Vehicle  Industry  Association.  The  industry  decline in
conjunction  with Starcraft  Group dealers  reducing  inventory  levels by 34.0%
during 1995 resulted in a decrease of 22.5% in Starcraft  Group's  domestic unit
sales volume.  The Company  believes  General Motors dealers  reduced  inventory
levels primarily in anticipation of the 1996  introduction of the newly designed
GMT 600  fullsize van  chassis.  The retail sales of Starcraft  Group units from
domestic dealers to consumers declined 3.7% in 1995.

GROSS PROFIT

     Gross profit for 1995 increased by 9.5% to $20.4 million from $18.6 million
in the prior year.  Gross profit as a percentage of net sales was 18.0% for 1995
compared to 20.1% for 1994.

     The  decrease  in margin  rate was the result of the  increased  sales from
Imperial  Group,  which  carries a lower  margin  rate.  Additionally,  Imperial
Group's  costs to move to a new facility  reduced the margin rate by 0.4% of net
sales.

SELLING AND
PROMOTION EXPENSE

     Selling and  promotion  expense as a percentage  of net sales  increased to
8.2% in 1995 from 8.0% in the prior year.  Starcraft Group's advertising expense
increased  0.2%  of net  sales  due  to  additional  direct  mail  programs  and
sponsorships.

GENERAL AND
ADMINISTRATIVE EXPENSE

     General and administrative  expense for 1995 increased to $6.6 million from
$5.1 million in the prior year primarily due to the Imperial Group  acquisition.
As a percentage of net sales,  such expenses  increased to 5.8% from 5.5% in the
prior year due to increased insurance and legal costs.

INTEREST

     Net  interest  expense  for 1995 was  $208,000  compared  to $99,000 in net
interest  income for 1994.  The increase in expense is primarily due to interest
incurred on  additional  borrowings  incurred to pay the  purchase  price of the
Imperial Group acquisition.

INCOME TAX EXPENSE

     The  effective  income  tax rate for 1995 was 38.9%  compared  to 39.9% for
1994.  The decrease is primarily  attributable  to a change in federal and state
permanent timing differences.

<PAGE>

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------
(dollars in thousands)                                                              1994 to 1995
                                               1995                   1994              Change
------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>       <C>          <C>          <C>    
Net sales                            $ 113,060      100.0%    $92,374      100.0%        22.4%
Cost of gods sold                       92,692       82.0%     73,775       79.9%        25.6%
                                     ---------      -----     -------      -----         ---- 
Gross profit                            20,368       18.0%     18,599       20.1%         9.5%
Selling and promotion expense            9,292        8.2%      7,393        8.0%        25.7%
General and administrative expense       6,572        5.8%      5,112        5.5%        28.6%
                                     ---------      -----     -------      -----         ---- 
Operating income                         4,504        4.0%      6,094        6.6%       (26.1%)
Interest (expense) income                 (208)      (0.2%)        99        0.1%         ---
Other income, net                          214        0.2%        104        0.1%       105.8%
                                     ---------      -----     -------      -----         ---- 
Income before taxes                      4,510        4.0%      6,297        6.8%       (28.4%)
Income taxes                             1,753        1.6%      2,517        2.7%       (30.4%)
                                     ---------      -----     -------      -----         ---- 
NET INCOME                           $   2,757        2.4%     $3,780        4.1%       (27.1%)
                                     =========      =====     =======      =====         ==== 
</TABLE>


<PAGE>

SEASONALITY AND TRENDS

     The Company's sales and profits are dependent on the automotive  markets in
the United  States and Japan and the OEM's ability to supply  chassis.  Although
the Company currently does not face such issues, during 1996 the Company's sales
were  adversely  impacted by chassis  availability  from the OEMs.  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.  General
Motors' chassis represented 72% of the Company's total unit shipments in 1996.

     The Company's retail dealers had  approximately  5,300 units on hand at the
end of 1996  compared to 5,600 at the end of the prior year.  Both these  levels
remain significantly lower than the 1994 level of 7,200. The lower levels appear
to be the result of dealer  caution in  stocking  the newly  redesigned  General
Motors fullsize van and the trend of dealers to stock more SUVs.

LIQUIDITY AND CAPITAL RESOURCES

     Operating activities provided cash of $1.9 million compared to $1.1 million
in the prior year. This  improvement came principally from a favorable change in
working  capital.  Receivables  increased  $2.8  million due to the  increase in
international  receivables  which carry longer  payment  terms.  The increase in
accounts  payable  of $2.9  million  in 1996 is  attributable  to the ramp up of
production  in  September  1996 for the  increased  international  business  and
improved  vendor payment terms.  Operating  cashflows were applied  primarily to
fund capital  expenditures,  repurchase  the  Company's  Common Stock and reduce
outstanding indebtedness.

     At the end of 1996  long-term  debt was zero.  The Company  maintains a $15
million bank  revolving  credit line.  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 OEMs 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%.

     In 1995 the Board of  Directors  approved the  repurchase  of up to 500,000
shares of the  Company's  outstanding  shares of Common  Stock.  During 1996 the
Company repurchased 53,000 common shares in the open market for $246,000.  As of
December  27,  1996,  153,000  common  shares have been  repurchased  under this
program.  Additional  shares  may be  acquired  in 1997 if,  in the  opinion  of
management, the Company's stock continues to be undervalued by the market.

     In  October  1996,  the  Company  finalized  its  plan to  consolidate  the
operations of the Imperial Automotive Group manufacturing operation,  located in
Elkhart,  Indiana,  into Starcraft Automotive Group's  manufacturing  complex in
Goshen,  Indiana,  during  December  1996.  This  plan is  designed  to  enhance
profitable  growth by reducing excess production  capacity,  personnel count and
fixed  overhead   expenses.   The  Company  estimates  that  a  $700,000  pretax
restructuring  charge  in  connection  with  this  plant  consolidation  will be
recorded in the first quarter of 1997. The charge includes employee  termination
costs,  leasehold  asset  write-offs and the  recognition  of contractual  lease
obligations.

     The Company believes that cash flows from operations, funds available under
its bank  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 1997.

DISCUSSION OF FORWARD-LOOKING INFORMATION

     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.  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  sufficient  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.

     Acquisitions.  The Company expects to be engaged in negotiations  from time
to  time  regarding   prospective   acquisitions  of  van  conversion  or  other
businesses. Such acquisitions could be material to the Company and, if effected,
could have

<PAGE>

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.  

     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.  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.

     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.
The impact of these  factors was  significant  in 1996.  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,  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.  There is no  assurance  the Company will be able to
maintain its current  competitive  position in the vehicle  conversion market or
that it will be able to expand  its sales of custom  truck and SUV  conversions.

     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,  "lemon law" claims 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.

<PAGE>

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
Starcraft Corporation

         We  have  audited  the  accompanying   consolidated  balance  sheet  of
Starcraft  Corporation and Subsidiaries as of September 29, 1996 and the related
consolidated statements of income,  shareholders' equity, and cash flows for the
year 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 audit. The consolidated
financial statements of Starcraft  Corporation and Subsidiaries as of October 1,
1995 and for each of the two years in the  period  then  ended  were  audited by
other  auditors  whose report dated  November 3, 1995  expressed an  unqualified
opinion on those statements.

         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 financial position of
Starcraft  Corporation  and  Subsidiaries  as of  September  29,  1996  and the
consolidated  results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles.

                                                  /s/ Ernst & Young LLP
November 7, 1996
Fort Wayne, Indiana

<PAGE>


                                     [Logo]
                             McGLADREY & PULLEN, LLP
                  Certified Public Accountants and Consultants


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Starcraft Corporation
Goshen, Indiana


We have  audited  the  accompanying  consolidated  balance  sheet  of  Starcraft
Corporation and Subsidiaries as of October 1, 1995, and the related consolidated
statements of income, shareholders' equity, and cash flows for the periods ended
October 1, 1995, and October 2, 1994. These  consolidated  financial  statements
are the  responsibility of the Companies'  management.  Our responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable   assurance  about  whether  the  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  financial  position  of  Starcraft
Corporation  and  Subsidiaries  as of October 1, 1995,  and the results of their
operations  and their  cash  flows for the  periods  ended  October  1, 1995 and
October 2, 1994, in conformity with generally accepted accounting principles.




                                                     /s/ McGLADREY & PULLEN, LLP
Elkhart, Indiana
November 3, 1995

<PAGE>


Consolidated Balance Sheets

ASSETS
CURRENT ASSETS:
<TABLE>
<CAPTION>
                                                                                September 29,       October 1,
(in thousands, except share data)                                                   1996              1995
                                                                                -------------       ----------
<S>                                                                               <C>                <C>    
     Cash and cash equivalents                                                    $ 1,366            $ 1,255
     Trade receivables, less allowance for                                                        
         doubtful accounts: (1996 - $51; 1995 - $57)                                9,165              6,045
     Manufacturers rebates receivable                                               1,079              1,389
     Inventories                                                                   11,508             11,713
     Other                                                                            330                493
                                                                                  -------            -------
               Total current assets                                                23,448             20,895
PROPERTY AND EQUIPMENT:                                                                           
     Land, buildings, and improvements                                              6,033              5,702
     Machinery and equipment                                                        4,430              3,871
                                                                                  -------            -------
                                                                                   10,463              9,573
     Less accumulated depreciation                                                  2,697              1,898
                                                                                  -------            -------
                                                                                    7,766              7,675
GOODWILL, at amortized cost                                                         5,140              5,365
                                                                                  -------            -------
OTHER ASSETS                                                                          170                278
                                                                                  $36,524            $34,213
                                                                                  =======            =======
LIABILITIES AND                                                                                   
SHAREHOLDERS' EQUITY                                                                              
CURRENT LIABILITIES                                                                               
                                                                                                  
     Accounts payable, trade                                                      $ 9,330            $ 6,383
     Accrued expenses:                                                                            
         Warranty                                                                   1,600              1,785
         Compensation and related expenses                                            882              1,143
         Taxes                                                                      1,280                929
         Other                                                                      1,557              1,352
     Current portion of long-term debt:                                               323                610
                                                                                  -------            -------
               Total current liabilities                                           14,972             12,202
LONG-TERM DEBT, less current portion                                                   --                323
                                                                                                  
COMMITMENTS AND CONTINGENCIES                                                                     
                                                                                                  
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 1996 - 4,118,600; 1995 - 4,171,600          13,971             14,104
     Additional paid-in capital                                                     1,008              1,008
     Retained earnings                                                              6,573              6,576
                                                                                  -------            -------
                                                                                   21,552             21,688
                                                                                  -------            -------
                                                                                  $36,524            $34,213
                                                                                  =======            =======
</TABLE>                                                                

<PAGE>

Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                                         Year Ended
                                                  ------------------------------------------------------
                                                   September 29,         October 1,           October 2, 
(in thousands, except share data)                      1996                 1995                 1994
--------------------------------------------------------------------------------------------------------
NET SALES
<S>                                               <C>                  <C>                  <C>        
     Domestic                                     $    73,317          $    91,652          $    81,640
     Export                                            25,648               21,408               10,734
                                                    ---------            ---------            ---------
                                                       98,965              113,060               92,374
COST OF GOODS SOLD                                     83,669               92,692               73,775
                                                    ---------            ---------            ---------
               Gross profit                            15,296               20,368               18,599
                                                                                           
OPERATING EXPENSES                                                                         
     Selling and promotion                              8,252                9,292                7,393
     General and administrative                         6,797                6,572                5,112
                                                    ---------            ---------            ---------
                                                       15,049               15,864               12,505
                                                    ---------            ---------            ---------
               Operating income                           247                4,504                6,094
                                                                                           
NON-OPERATING (EXPENSE) INCOME:                                                            
     Interest, net                                       (293)                (208)                  99
     Other income, net                                    176                  214                  104
                                                    ---------            ---------            ---------
                                                         (117)                   6                  203
                                                    ---------            ---------            ---------
               Income before income taxes                 130                4,510                6,297
                                                                                           
FEDERAL AND STATE INCOME TAXES                             20                1,753                2,517
                                                    ---------            ---------            ---------
               Net Income                         $       110          $     2,757          $     3,780
                                                    =========            =========            =========
EARNINGS PER COMMON                                                                        
   AND COMMMON EQUIVALENT SHARE                   $      0.03          $      0.65          $      0.90
                                                    =========            =========            =========
AVERAGE NUMBER OF COMMON                                                                   
   AND COMMMON EQUIVALENT SHARES OUTSTANDING        4,142,402            4,260,915            4,193,003
                                                    =========            =========            =========
</TABLE>

<PAGE>

Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                              Year Ended
                                                                           --------------------------------------------------
                                                                           September 29,       October 1,          October 2,
(in thousands)                                                                1996                1995                 1994
-----------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S>                                                                         <C>                 <C>                 <C>    
     Net income                                                             $   110             $ 2,757             $ 3,780
     Adjustments to reconcile net income to net                                                                   
         cash provided by operating activities:                                                                   
         Depreciation and amortization                                        1,087               1,006                 613
         Other                                                                   51                  93                  60
         Change in operating assets and liabilities                                      
            Receivables                                                      (2,810)               (229)             (1,013)      
            Inventories                                                         205              (1,346)              2,457   
            Other                                                               163                 176                  53
            Accounts payable                                                  2,947                (696)                126
            Accrued expenses                                                    110                (703)                863
                                                                            -------             -------             -------
               Net cash provided by operating activities                      1,863               1,058               6,939
                                                                                                                  
INVESTING ACTIVITIES                                                                                       
     Purchase of property and equipment                                        (932)             (1,630)             (1,451)
     Purchase of assets of Imperial Industries, Inc.                             --                  --              (3,900) 
     Other                                                                       36                  45                (146)
                                                                            -------             -------             -------
               Net cash used in investing activities                           (896)             (1,585)             (5,497)
                                                                                                                  
FINANCING ACTIVITIES                                                                                              
     Proceeds  from  revolving  credit  agreement                             7,800               5,100                 700
     Payments on revolving  credit agreement                                 (7,800)             (5,100)               (700)
     Payments on long-term  debt                                               (610)               (512)               (466)
     Repurchase of common stock                                                (246)               (625)                 --
                                                                            -------             -------             -------
               Net cash used in financing activities                           (856)             (1,137)               (466)
                                                                            -------             -------             -------
                    Net increase (decrease) 
                         in cash and cash equivalents                           111              (1,664)                976   
                                                                                                                  
     Cash and cash equivalents at beginning of year                           1,255               2,919               1,943
                                                                            -------             -------             -------
     Cash and cash equivalents at end of year                               $ 1,366             $ 1,255             $ 2,919
                                                                            =======             =======             =======
                                                                                                                  
     Supplemental information:                                                                                    
            Interest paid                                                   $   304             $   222             $    15
                                                                                                                  
            Income taxes paid                                               $    60             $ 2,205             $ 2,484
</TABLE>


<PAGE>

Consolidated Statements of Shareholders Equity

<TABLE>
<CAPTION>

                                         Common          Additional         Retained         Common Stock       Total
(in thousands, except share data)        Stock         Paid-In Capital      Earnings         Repurchased              
-----------------------------------------------------------------------------------------------------------------------
<S>              <C>                   <C>               <C>               <C>               <C>               <C>     
BALANCE, October 3, 1993               $ 13,932          $  4,608          $    326          $ (4,000)         $ 14,866
     Net income                              --                --             3,780                --             3,780
       Issuance of 130,000                                                                                    
       shares of common stock               910                --                --                --               910
     Retirement of 738,400                                                                                    
       shares of repurchased                                                                                  
       common stock                        (400)           (3,600)               --             4,000                -- 
                                       --------          --------          --------             -----          --------
BALANCE, October 2, 1994                 14,442             1,008             4,106                --            19,556
     Net income                              --                --             2,757                --             2,757
     Repurchase and retirement                                                                                
       of 100,000 shares                                                                                      
       of common stock                     (338)               --              (287)               --              (625)
                                       --------          --------          --------               ---          --------
BALANCE, October 1, 1995                 14,104             1,008             6,576                --            21,688
     Net income                              --                --               110                --               110
     Repurchase and retirement                                                                                
       of 53,000 shares                                                                                       
       of common stock                     (133)               --              (113)               --              (246)
                                       --------          --------          --------               ---          --------
BALANCE, September 29, 1996            $ 13,971          $  1,008          $  6,573                $-          $ 21,552
                                       ========          ========          ========               ===          ========
</TABLE>

 <PAGE>


NOTES TO FINANCIAL STATEMENTS

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.  The  consolidated  financial  statements  include the  accounts of
Starcraft  Corporation and its wholly owned subsidiaries:  Starcraft  Automotive
Group, Inc., Imperial Automotive Group, Inc. and Starcraft  Southwest,  Inc. All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  

     The Company's  customers  operate in the automotive  industry.  The Company
sells  conversion  units  throughout  the United  States,  and export  sales are
principally  to  locations  in Japan,  Korea,  and  northern  Europe.  Credit is
extended  to  customers  based  on an  evaluation  of the  customer's  financial
condition,  and when credit is extended  collateral  is generally  not required.
Sales to the Company's  largest customer for the years ended September 29, 1996,
October  1,  1995,  and  October  2,  1994  were  $18,526,000,  $15,185,000  and
$5,009,000, respectively.

Significant Accounting Policies

Cash Equivalents

     Cash equivalents  include all highly-liquid  investments with a maturity of
three months or less.

     The Company maintains deposits in one or more financial institutions which,
at times, may be in excess of FDIC insurance limits.

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  ($8,408,000 at
September 29, 1996) and by the first-in,  first-out  (FIFO) method for all other
inventories ($3,100,000 at September 29, 1996).

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 a period  of 50  years,
building  improvements over periods of 5 to 20 years, and equipment over periods
of 3 to 12 years.

Goodwill

     Goodwill is amortized by the straight-line method over a period of 25 years
and is stated net of  accumulated  amortization  of  $482,000  and  $257,000  at
September 29, 1996 and October 1, 1995, respectively.

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  generally  recognized  upon
shipment. Net sales do not include the cost of chassis (see Note 7).

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."


<PAGE>

Use of Estimates

     The  preparation of the financial  statements in conformity  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.

Accounting Changes

     In March 1995, the Financial  Accounting  Standards Board issued  Statement
No. 121 ("SFAS 121"),  "Accounting  for the Impairment of Long-Lived  Assets and
for Long-Lived Assets to be Disposed of," which required impairment losses to be
recorded on long-lived  assets used in operations  when indicators of impairment
are present and the  undiscounted  cash flows estimated to be generated by those
assets are less than the  assets'  carrying  amount.  The  Company's  long-lived
assets  are  assessed  for  potential  impairment  whenever  existing  facts and
circumstances   indicate  the  carrying   value  of  those  assets  may  not  be
recoverable.  The  adoption  of SFAS 121 in  fiscal  1996 had no  effect  on the
Company's financial statements.

Seasonality

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

Fiscal Year

     The Company's  fiscal year ends on the Sunday  closest to September 30. The
years  ended  September  29,  1996,  October 1, 1995,  and  October 2, 1994 each
contain 52 weeks.

2. Inventories

The  composition  of inventories at September 29, 1996 and October 1, 1995 is as
follows:

(in thousands)                    1996            1995
-------------------------------------------------------       
Raw materials                 $   7,126        $  6,808
Work-in-process                   1,786           2,340
Finished goods                    2,596           2,565
                              ---------        --------
                              $  11,508        $ 11,713
                              =========        ========
                   

     The use of the LIFO method of determining  the cost of inventories  did not
have a material  effect on inventories at September 29, 1996 and October 1, 1995
or net income for the years then ended.

3. Debt Arrangements

     The Company has a bank line of credit  totaling $15 million,  none of which
was outstanding at September 29, 1996. Borrowings under this line of credit bear
interest at the prime rate of the lending bank (8.25% at September 29, 1996), or
at the Company's  option,  LIBOR plus 1.25%,  and are  unsecured.  This facility
expires in January 1998.

     At  September  29,  1996,  the  Company  has a  note  payable  to  Imperial
Industries,  Inc. for $323,000  resulting from additional  consideration paid as
part of the  acquisition  of its assets (see Note 6). The note is due in monthly
installments of $55,178 including  interest at 8% with the final installment due
March 1997.

     Interest  expense for the years ended September 29, 1996,  October 1, 1995,
and  October  2,  1994,  was  approximately  $305,000,  $224,000,  and  $15,000,
respectively.

4. Income Taxes

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

Year Ended          Sept. 29,       Oct. 1,        Oct. 2,
(in thousands)        1996            1995           1994
-----------------------------------------------------------
Current:
   Federal         $  (103)         $ 1,272         $ 2,011
   State                55              378             457
                   -------          -------         -------
                       (48)           1,650           2,468
Deferred:                                          
   Federal              54               83              41
   State                14               20               8
                   -------          -------         -------
                        68              103              49
                   -------          -------         -------
                   $    20          $ 1,753         $ 2,517
                   =======          =======         =======
                                             


<PAGE>

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:

Year Ended               Sept. 29,       Oct. 1,           Oct. 2,
(in thousands)             1996             1995            1994
------------------------------------------------------------------
Rate applied to
   pre-tax income        $    44          $ 1,533         $ 2,141
State taxes, net of                                     
   federal benefit            46              182             372
Foreign sales                                           
   corporation              (205)              --              --
Other, net                   135               38               4
                         -------          -------         -------
                         $    20          $ 1,753         $ 2,517
                         =======          =======         =======
                                                   

     The composition of the deferred tax assets and liabilities at September 29,
1996 and October 1, 1995 is as follows:

(in thousands)                           1996               1995
-----------------------------------------------------------------
Deferred tax liabilities:                                
   Accelerated depreciation             $(330)             $(247)
   Inventory basis difference             (64)              (127)
   Other                                  (84)               (59)
                                        -----              -----
                                         (478)              (433)
                                                         
Deferred tax assets:                                     
   Nondeductible accruals:                               
      Warranty                            378                450
      Other                               175                126
                                        -----              -----
                                          553                576
                                        -----              -----
Net deferred tax assets                 $  75              $ 143
                                        =====              =====
                          


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 matching  contribution  by the  Company of the  employee's
salary deduction, up to 6% of compensation. In addition, the plan provides for a
discretionary contribution annually as determined by the Board of Directors. The
amounts  charged to expense for the years ended  September 29, 1996,  October 1,
1995, and October 2, 1994 for this plan were approximately  $107,000,  $470,000,
and $364,000, respectively.

     The Company  sponsors a qualified  stock option plan with 380,000 shares of
common stock  reserved for options to key  employees  and  directors.  Under the
plan, options may not be granted at prices below 85% of the current market value

<PAGE>

of the stock at the date of the grant. All options awarded through September 29,
1996 have been at fair  market  value on the date of grant.  For the year  ended
September 29, 1996,  the effect of the stock  options in computing  earnings per
common share was antidilutive.

The following is a summary of  transactions of shares under option for the years
ended September 29, 1996, October 1, 1995, and October 2, 1994.

                                                Year Ended
------------------------------------------------------------------------------
                               1996                1995                1994
------------------------------------------------------------------------------
Outstanding, beginning                                            
   of year                    311,850             241,350             166,850
Granted during                                                    
   the year                   171,000             167,000              79,500
Canceled during                                                   
   the year                  (113,001)            (96,500)             (5,000)
                             --------             -------              ------ 
Outstanding,                                                      
   end of year                369,849             311,850             241,350
                              =======             =======             =======
                                                                  
                                                                  
Eligible, end of                                                  
   year for exercise                                              
   currently (between                                             
   $3.875 and $10                                                 
   per share)                 354,349             248,076             118,105
                              =======             =======             =======
                                                            

     The Company  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.  Under this plan, 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 September 29, 1996 have been at fair market value on the
date of grant.  There were 5,500 options  outstanding  as of September 29, 1996.
For the year  ended  September  29,  1996,  the  effect of the stock  options in
computing earnings per common share was antidilutive.

6. Business Combination

     On July 3, 1994,  the  Company  acquired  the assets  and  assumed  certain
liabilities of Imperial  Industries,  Inc.  (Imperial),  a  manufacturer  of van
conversions.  The purchase  price of the acquired  assets was $3,900,000 in cash
and 130,000 shares of the Company's common stock with a value of $910,000.

     Based upon Imperial  achieving certain pre-tax net profits for the calendar
year 1994,  the Company was required to pay  additional  consideration  of $1.22
million  in the form of a 24 month  note (see Note 3).  This  consideration  was
recorded as an addition to goodwill in 1995.

     Unaudited pro forma  consolidated  results of operations for the year ended
October 2, 1994 as though the acquisition of Imperial had occurred as of October
3, 1993 are as follows (in thousands, except per share data):

        Net sales                             $ 109,582
        Net income                                4,504
        Earnings per common and
           common equivalent share                 1.07

     The  above  pro  forma  results  of  operations  reflect   adjustments  for
amortization of goodwill,  imputed interest on borrowed funds, and income taxes.
The pro forma  amounts  do not  purport  to be  indicative  of what  would  have
occurred had the acquisition been made as of October 1, 1993 or of results which
may occur in the future.


<PAGE>

7. 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.

     The agreements are secured by various  credit  arrangements  with the OEMs.
The OEMs may  require  the  Company  to  purchase  chassis in the event that the
restricted sales agreements are terminated.  Chassis  purchases  required by the
terms of these  arrangements were not material during the periods covered by the
accompanying financial statements.  The Company pays the OEMs a nominal carrying
charge for the first 90 days that it  possesses  a chassis.  After 90 days,  the
carrying charges accelerate to approximate market interest rates. Throughout the
consignment  period,  the  Company is subject to the risk of decline in value of
consigned chassis.

     Consistent  with the practice in their 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.

     At  September  29,  1996,  the  Company  has  possession  of chassis in the
aggregate  amount of  $45,167,000  (of which  $4,615,000  related  to chassis on
consignment  for  periods   exceeding  90  days)  and  has  total  chassis  line
availability  between $73.7 million and $83.9 million based on the time of year.
Carrying  charges on consignment  chassis,  which are presented in cost of goods
sold,  for the years  September 29, 1996,  October 1, 1995,  and October 2, 1994
were approximately $1,729,000,  $2,046,000, and $795,000, respectively. The OEMs
have also instituted  incentive rebates to second-stage  manufacturers  based on
the number of chassis  delivered to dealers.  Those  incentives  reduced cost of
goods sold by  approximately  $1,135,000,  $1,415,000,  and  $1,075,000 in 1996,
1995, and 1994, respectively.

8. 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 for the years ended  September 29, 1996,  October 1, 1995,
and  October  2, 1994  were  approximately  $893,000,  $726,000,  and  $792,000,
respectively.


<PAGE>

9. Commitments

     The Company  leases  certain of its  facilities  and  equipment.  The total
rental  expense for the years ended  September  29, 1996,  October 1, 1995,  and
October  2,  1994 is  $490,000,  $295,000,  and  $50,000,  respectively.  Rental
commitments at September 29, 1996 for long-term  noncancelable  operating leases
are as follows:

                             1997           $386,000
                             1998            135,000
                             1999             14,000
                             2000              6,000
                             2001              5,000
                                            --------
                                            $546,000
                                            ========
             

10. Unaudited Interim Financial Information

     Presented below is certain unaudited  quarterly  financial  information for
the years ended September 29, 1996 and October 1, 1995.

(in thousands, except share data)

                                          Quarter Ended
--------------------------------------------------------------------------
                      Dec. 31,       March 31,      June 30,     Sept. 29,
                       1995           1996           1996          1996
--------------------------------------------------------------------------  
Net sales            $ 15,658       $ 23,063       $ 31,507      $ 28,737
Gross profit            1,538          1,717          6,276         5,765
Net income                                                      
   (loss)              (1,142)        (1,229)         1,414         1,067
Earnings (loss)                                                 
   per common                                                   
   share                 (.27)          (.30)           .34           .26
                                                             

                                            Quarter Ended
--------------------------------------------------------------------------
                      Jan. 1,         April 2,        July 2,      Oct. 1,
                       1995            1995            1995         1995
-------------------------------------------------------------------------- 
Net sales             $25,558         $31,759         $30,973      $24,770
Gross profit            4,443           5,105           6,473        4,347
Net income                352             848           1,402          155
Earnings                                                         
   per common                                                    
   share                  .08             .20             .33          .04
                                                     
11. Subsequent Event

     In  October  1996,  the  Company  finalized  its  plan to  consolidate  the
operations of the Imperial Automotive Group manufacturing operation,  located in
Elkhart,  Indiana,  into Starcraft Automotive Group's  manufacturing  complex in
Goshen,  Indiana during  December  1996.  The Company  estimates that a $700,000
pre-tax restructuring charge in connection with this plant consolidation will be
recorded in the first quarter of fiscal 1997.

<PAGE>

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

         Previously  reported in the Registrant's  Form 10-K for the fiscal year
ending October 1, 1995.

                                    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 27, 1997.


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 27, 1997.

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 27, 1997.

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 27, 1997.

<PAGE>




                                     PART IV

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

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

Financial Statements (as of and for the fiscal periods ended September 29, 1996,
  October 1, 1995 and October 2, 1994):

         Balance Sheets
         Statements of Income
         Statements of Cash Flows
         Statements of Shareholders' Equity
         Notes to Financial Statements
        
(b)      Reports on Form 8-K

         Registrant  filed no  reports on Form 8-K  during  the  quarter  ending
         September 29, 1996.

(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 a 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.


<PAGE>

                     STARCRAFT CORPORATION AND SUBSIDIARIES


                                   SCHEDULE II
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                             Balance at                                Deductions from
                                            Beginning of          Charged to            Additions to          Balance at Close
                                               Period             Operations             Reserves(a)              of Period
----------------------------------------------------------------------------------------------------------------------------------
Allowance for doubtful accounts  
-deducted from accounts  receivable,  
trade, in the consolidated balance sheets:

<C>                                              <C>                   <C>                  <C>                       <C>  
52 weeks ended September 29, 1996                $  57                $  --                 $    (6)                   $  51
                                                                  
52 weeks ended October 1, 1995                   $  60                $  --                 $    (3)                   $  57
                                                                  
52 weeks ended October 2, 1994                   $  41                $  --                 $    19 (b)                $  60
</TABLE>                                                        
------------
(a)      Write-off of bad debts, less recoveries.

(b)      Includes  $20  acquired  as part of  acquisition  of assets of Imperial
         Industries, Inc.


<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 27, 1996                       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 27th day of December,
1996:


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, 
                  Michael H. Schoeffler     Secretary

(3)      The Board of Directors:

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

   By:   /s/  Frank K. Martin               Director
         ----------------------
                  Frank K. Martin

   By:   /s/  L. Craig Fulmer               Director
         ----------------------
                  L. Craig Fulmer

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

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

<PAGE>



                                  EXHIBIT INDEX

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

2.1      Asset  Purchase  and  Sale  Agreement  between  Imperial
         Industries, Inc. and the Registrant, dated June 2, 1994.
         Incorporated   by   reference  to  Exhibit  2.1  to  the
         Registrant's  Form  8-K,  as  amended,  filed  with  the
         Securities Exchange Commission on July 20, 1994.                  *

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.                        [ ]

3.3      Form of Share Certificate.                                        **

4.1      Article  6  -  "Terms  of  Shares"   and   Article  9  -
         "Provisions for Certain  Business  Combinations"  of the
         Registrant's Articles of Incorporation, as amended.

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.

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 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.                                     *

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

10.1(b)  The Starcraft Corporation 1997 Stock Incentive Plan.             [ ]



<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 June 2,
         1993.  Incorporated by reference to Exhibit  10.10(a) of
         the Registrant's Form S-1.                                        **

10.3(b)  Employment  Agreement  with Kelly L. Rose dated December
         12, 1996.                                                        [ ]

10.3(c)  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(d)  Employment  Agreement between the Registrant and Michael
         H.  Schoeffler  dated January 16, 1995.  Incorporated by
         reference to Exhibit  10.3(m) of the  Registrant's  Form
         10-K for the year ending October 1, 1995.                         *

10.3(e)  Employment  Agreement between the Registrant and Michael
         H. Schoeffler dated December 12, 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.                                            **

10.6     Intercreditor    Agreement    between   General   Motors
         Acceptance Corporation and Bank One, Indianapolis,  N.A.
         dated July 21, 1992. Incorporated by reference to
         Exhibit 10.16 of the Registrant's Form S-1.                       **



<PAGE>




10.7     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.                       **

10.8     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.                                            **

10.9     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.                                            **

10.10    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.                                                              **

10.11    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.                                                              **

10.12    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.                                            **

10.13    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.                                            **

10.14    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.                                            **

10.15    Contract  for  Conditional  Sale of Real  Estate  by and
         between  the   Registrant  and  the  Harold  A.  Schrock
         Revocable  Trust  dated  December  20,  1991 and amended
         February 28, 1992.  Incorporated by reference to Exhibit
         10.26 of the Registrant's Form S-1.                               **



<PAGE>




10.16(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.                                                          *

10.16(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.                                                  *

10.17    Ford   Authorized   Convertor  Pool  Agreement   between
         Imperial Automotive Group, Inc. and Ford Motor Co. dated
         June 29,  1994.  Incorporated  by  reference  to Exhibit
         10.19 of the Registrant's  Form 10-K for the fiscal year
         ending October 2, 1994.                                           *

10.18    Inventory Loan and Security  Agreement  between Imperial
         Automotive  Group,  Inc. and General  Motors  Acceptance
         Corporation   dated  June  20,  1994.   Incorporated  by
         reference to Exhibit 10.20 of the Registrant's Form 10-K
         for the fiscal year ending October 2, 1994.                       *

10.19    Ford Authorizing  Converter Pool Agreement  between Ford
         Motor Co. and Imperial Automotive Group, Inc. dated June
         29, 1994.  Incorporated by reference to Exhibit 10.21 of
         the  Registrant's  Form 10-K for the fiscal  year ending
         October 2, 1994.                                                  *

10.20    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.                               *

10.21    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.                                           *


<PAGE>




10.22    GMC  Truck  Special  Vehicle  Manufacturer's   Agreement
         between  Imperial  Automotive  Group,  Inc.  and the GMC
         division  of  General   Motors   Corporation   effective
         February 1, 1995.  Incorporated  by reference to Exhibit
         10.22 of the Registrant's  Form 10-K for the year ending
         October 1, 1995.                                                  *


10.23    Lease between Imperial  Automotive  Group, Inc. and Beck
         Real  Estate   Corporation   dated   February  3,  1995.
         Incorporated   by   reference   to  Exhibit  10  to  the
         Registrant's Form 10-Q for the quarter ending January 1,
         1995.                                                             *


10.24    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.                                                             *


10.25    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.                                                             *


10.26    Promissory   Note  from  the   Registrant   to  Imperial
         Industries,  Inc. dated April 1, 1995.  Incorporated  by
         reference to Exhibit 10(3) to the Registrant's Form 10-Q
         for the quarter ending April 2, 1995.                             *

10.27    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>




10.28    Chevrolet  Quality Approved  Converters  Program between
         Imperial  Automotive Group, Inc. and Chevrolet  division
         of General  Motors  Corporation  dated  April 10,  1995.
         Incorporated  by  reference  to  Exhibit  10.28  of  the
         Registrant's  Form 10-K for the year  ending  October 1,
         1995.                                                             * 

10.29    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.                         *

10.30    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.                                                             *

10.31    Agreement  between  Chrysler  Corporation  and  Imperial
         Industries,  Inc.  dated July 1, 1995.  Incorporated  by
         reference to Exhibit 10.31 of the Registrant's Form 10-K
         for the year ending October 1, 1995.                              *

10.32    Pool  Company   Wholesale   Finance  Plan  and  Security
         Agreement   between  Chrysler  Credit   Corporation  and
         Imperial   Industries,   Inc.   dated   July  1,   1995.
         Incorporated  by  reference  to  Exhibit  10.32  of  the
         Registrant's  Form 10-K for the year  ending  October 1,
         1995.                                                             *

10.33    Promissory  Note  from Duke T. Hale  dated  November  4,
         1995.  Incorporated by reference to Exhibit 10(1) to the
         Registrant's  Form 10-Q for the quarter  ending April 2,
         1995.                                                             *

11       Computation of Earnings Per Share                                [ ]

21       Subsidiaries of the Registrant.                                  [ ]

23 (a)   Consent of Ernst & Young LLP.                                    [ ]

23 (b)   Consent of McGladrey & Pullen, LLP

27       Financial Data Schedule



<PAGE>   

*        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.