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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    **FORM 10-Q****(Mark One)****[X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended: July 31, 2005

                                       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 0-12619

                            Collins Industries, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Missouri                                  43-0985160
--------------------------------------------------------------------------------
      (State or other jurisdiction                     (I.R.S. Employer
            of incorporation)                       Identification Number)

     15 Compound Drive            Hutchinson, Kansas            67502-4349
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number including area code          620-663-5551
                                                 -------------------------------

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 wither the registrant is an accelerated Filer (as defined
under rule 12b-2 of the Act).    Yes           No   X
                                     -----        -----

Indicate  by check mark  wither the  registrant  is a shell  company (as defined
under rule 12b-2 of the Act).    Yes           No   X
                                     -----        -----

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

Number of shares of common stock outstanding as of July 25, 2005: 6,625,324

**COLLINS INDUSTRIES, INC. AND SUBSIDIARIES

                                    FORM 10-Q
                                  July 31, 2005****INDEX**

PART I.           FINANCIAL INFORMATION                                 PAGE NO.
      Item 1.     Financial Statements:
      -------

                  Consolidated Condensed Balance Sheets
                       July 31, 2005 and October 31, 2004                      2

                  Consolidated Condensed Statements of Income and
                       Comprehensive Income
                       Three and Nine Months Ended July 31, 2005 and 2004      3

                 Consolidated Condensed Statements of Cash Flow
                       Nine Months Ended July 31, 2005 and 2004                4

                 Notes to Consolidated Condensed Financial Statements          5

       Item 2.   Management's Discussion and Analysis of Financial
       -------         Condition and Results of Operations                    15

       Item 3.   Quantitative and Qualitative Disclosures
       -------         About Market Risk                                      25

       Item 4.   Controls and Procedures                                      25
       -------

PART II.         OTHER INFORMATION
       Item 1.   Legal Proceedings                                            27
       -------

       Item 2.   Unregistered Sale of Equity Securities and Use of Proceeds   27
       -------

       Item 3.   Defaults upon Senior Securities                              27
       -------

       Item 4.   Submission of Matters to a Vote of Security-Holders          27
       -------

       Item 5.   Other Information                                            27
       -------

       Item 6.   Exhibits                                                     27
       -------

SIGNATURES                                                                    28

                                       1

**PART I - FINANCIAL INFORMATION****Item 1 - Financial Statements**

                    Collins Industries, Inc. and Subsidiaries
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)
                                                                       July 31,                 October 31,
                                                                         2005                      2004
                                                                 -------------------       --------------------

ASSETS
Current Assets:
   Cash                                                                $   152,770                $   163,098
   Receivables, trade & other                                           16,270,668                 10,979,087
   Inventories, lower of cost (FIFO) or market                          46,088,701                 39,059,185
   Prepaid expenses and other current assets                             3,413,067                  4,368,191
                                                                       -----------                -----------
      Total current assets                                              65,925,206                 54,569,561

Restricted cash                                                            317,659                    359,810

Property and equipment, at cost                                         53,768,619                 49,604,273
      Less: accumulated depreciation                                    32,012,877                 30,239,053
                                                                       -----------                -----------
      Net property and equipment                                        21,755,742                 19,365,220
Goodwill                                                                 5,050,232                  5,050,232
Other assets                                                             1,239,449                  1,382,482
                                                                       -----------                -----------
      Total assets                                                     $94,288,288                $80,727,305
                                                                       ===========                ===========

LIABILITIES & SHAREHOLDER'S INVESTMENT
Current liabilities:
   Current maturities of long-term debt & capitalized leases           $ 2,931,733                $ 2,371,734
   Controlled disbursements                                              4,276,708                  5,668,517
   Accounts payable                                                     23,662,071                 18,408,291
   Accrued expenses                                                     11,990,898                  9,469,165
                                                                       -----------                -----------
      Total current liabilities                                         42,861,410                 35,917,707

Long-term debt and capitalized leases                                   25,200,807                 18,515,178

Deferred income tax                                                      1,525,560                  1,525,560

Shareholders' investment:
   Common stock                                                            662,533                    636,933
   Paid-in capital                                                      13,353,447                 13,342,600
   Deferred compensation                                                (1,699,013)                (1,472,590)
   Accumulated other comprehensive income (loss), net                            -                    (25,562)
   Retained earnings                                                    12,383,544                 12,287,479
                                                                       -----------                -----------
      Total shareholders' investment                                    24,700,511                 24,768,860
                                                                       -----------                -----------
      Total liabilities & shareholders' investment                     $94,288,288                $80,727,305
                                                                       ===========                ===========

(See accompanying notes)

                                       2

                                                Collins Industries, Inc. and Subsidiaries
                                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                               (Unaudited)

                                                               Three Months Ended                           Nine Months Ended
                                                                    July 31,                                     July 31,

                                                           2005                  2004                  2005                   2004
                                                     ------------------    ------------------    ------------------    -------------------
                                                                             (as restated)                               (as restated)
Sales                                                     $80,617,600           $59,069,576          $193,459,400           $150,228,298
Cost of sales                                              72,059,819            52,309,263           174,370,129            132,815,730
                                                           ----------            ----------           -----------            -----------

   Gross profit                                             8,557,781             6,760,313            19,089,271             17,412,568

Selling, general and administrative expenses                5,288,328             5,020,542            16,219,953             14,194,802
                                                            ---------             ---------            ----------             ----------

   Income from operations                                   3,269,453             1,739,771             2,869,318              3,217,766

Other income (expense):
   Interest expense                                          (564,233)             (351,900)           (1,497,250)            (1,111,049)
   Other, net                                                   4,055                17,770                30,653                333,490
                                                            ---------             ---------            ----------             ----------
                                                             (560,178)             (334,130)           (1,466,597)              (777,559)
                                                            ---------             ---------            ----------             ----------
Income before income taxes                                  2,709,275             1,405,641             1,402,721              2,440,207

Income tax expense                                          1,060,000               540,000               530,000                920,000
                                                            ---------             ----------           ----------             ----------

Net income                                                 $1,649,275             $ 865,641            $  872,721            $ 1,520,207

Other comprehensive income, net of tax:
   Unrealized gain on interest rate swap                            0                20,307                25,562                 56,196
                                                            ---------             ---------            ----------             ----------
      Comprehensive income                                 $1,649,275             $ 885,948            $  898,283            $ 1,576,403
                                                           ==========             =========            ==========            ===========

Earnings per share:
   Basic                                                   $      .27             $     .15            $      .15            $       .26
                                                           ==========             =========            ==========            ===========
   Diluted                                                 $      .26             $     .14            $      .14            $       .25
                                                           ==========             =========            ==========            ===========

Dividends per share                                        $     .040             $    .035            $     .120            $      .100
                                                           ==========             =========            ==========            ===========

Weighted average common and common
  equivalent shares outstanding:
  Basic                                                     6,053,430             5,758,562             5,936,733              5,842,652
                                                            =========             =========             =========              =========
  Diluted                                                   6,289,658             6,178,537             6,257,081              6,200,556
                                                            =========             =========             =========              =========

(See accompanying notes)

                                       3

                    Collins Industries, Inc. and Subsidiaries
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
                                   (Unaudited)
                                                                                        Nine Months Ended
                                                                                            July 31,
                                                                                 2005                      2004
                                                                          -------------------       --------------------
Cash flow from operations:                                                                             (as restated)
   Cash received from customers                                                $188,167,819               $145,550,587
   Cash paid to suppliers and employees                                        (187,339,593)              (138,609,194)
   Interest paid                                                                 (1,378,545)                (1,135,575)
   Income taxes paid                                                               (743,150)                (1,175,281)
                                                                               ------------               ------------

      Cash provided by (used in) operations                                      (1,293,469)                 4,630,537
                                                                               ------------               ------------

Cash flow from investing activities:
   Capital expenditures                                                          (4,164,346)                (1,187,145)
   Net proceeds from sale of building and land                                            -                    399,810
   Other, net                                                                      (177,532)                   (64,833)
                                                                               ------------               ------------

      Cash used in investing activities                                          (4,341,878)                  (852,168)
                                                                               ------------               ------------

Cash flow from financing activities:
   Borrowings of long-term debt                                                   8,817,376                  4,288,444
   Principal payments of long-term debt and
     capitalized leases                                                          (1,571,748)                (2,247,964)
   Expenditures of restricted cash                                                   42,151                    115,735
   Purchase of common stock and other capital transactions                         (886,103)                (5,275,874)
   Payment of dividends                                                            (776,657)                  (628,130)
                                                                               ------------               ------------

      Cash provided by financing activities                                       5,625,019                (3,747,789)
                                                                               ------------               ------------

Net increase (decrease) in cash                                                    (10,328)                     30,580
                                                                               ------------               ------------

Cash at beginning of period                                                         163,098                     77,012
                                                                               ------------               ------------

Cash at end of period                                                          $    152,770               $    107,592
                                                                               ============               ============

Reconciliation of net income to net cash provided by
(used in) operations:
   Net income                                                                      $ 872,721               $ 1,520,207
   Depreciation and amortization                                                  2,381,017                  2,540,723
   Restricted stock vesting as severance pay                                        409,500                          -
   Increase in receivables                                                       (5,291,581)                (4,620,425)
   Increase in inventories                                                       (7,029,516)                (2,503,042)
   Decrease in prepaid expenses and other current assets                            980,687                  1,324,612
   Increase in accounts payable and accrued expenses                              6,383,704                  6,664,361
   Gain on sale of building and land                                                      -                   (295,899)
                                                                               ------------               ------------

Cash provided by (used in) operations                                          $ (1,293,469)              $  4,630,537
                                                                               ============               ============

(See accompanying notes)

                                       4

**COLLINS INDUSTRIES, INC. AND SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements**
                                   (Unaudited)

**(1) General**

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

In the opinion of management,  the accompanying unaudited consolidated condensed
financial  statements  contain  all  adjustments   (consisting  of  only  normal
recurring items) necessary to present fairly the Company's financial position at
July 31, 2005 and the results of operations and the cash flows for the three and
nine months ended July 31, 2005 and 2004.

The  Company  suggests  that  the  unaudited  Consolidated  Condensed  Financial
Statements  for the  three  and  nine  months  ended  July  31,  2005 be read in
conjunction  with the  Company's  Annual  Report for the year ended  October 31,
2004.

**(2)  Restatement of Financial Statements**

Subsequent to October 31, 2004,  management  determined that the procedures used
to record  workers  compensation  reserves  were  inappropriate  and resulted in
inadequate   reserves  being  recorded   historically   for  estimated   workers
compensation  costs and  claims.  This  information  was  reported  to the Audit
Committee and the Audit Committee initiated  procedures which ultimately lead to
the special investigation described in Note 9. As a result, and because the 2004
year-end  financial  closing  process  identified  adjustments  to prior  period
financial statements, the Company restated its consolidated financial statements
for the fiscal years ended October 31, 2003 and 2002 and for the quarters  ended
January 31, 2003 to July 31, 2004

*Effects of Restatement on Net Income*

The following  table  identifies  the  adjustments  made to  previously-released
consolidated financial statements:

                                                Three Months       Nine Months
                                                   Ended              Ended
***Description of Adjustment***                         July 31,          July 31,
($ In thousands 000's)                            2004(1)            2004(1)
--------------------------------------------------------------------------------

Workers Compensation Reserve Adjustments(2)        $ 82             $  274
Uncollectible Rebates(3)                            (44)               (58)
Other Accrued Expenses(4)                           (22)               (69)
--------------------------------------------------------------------------------
  **Total pre-tax impact**                             $ 16             $  147
  **Income tax(5)**                                     (10)               (50)
--------------------------------------------------------------------------------
**Total Net Income Impact**                            $  6             $   97
--------------------------------------------------------------------------------

                                       5

(1)  As  originally  reported by the Company for the quarter ended July 31, 2004
     on Form 10-Q.

(2)  Reflects adjustments to workers' compensation  liability reserves which had
     not previously  been recorded.  Amounts in the  three-month  and nine-month
     period ended July 31, 2004 also reflect  adjustment to expense which should
     have been recorded in prior periods.
     Consolidated  Statements of Income and  Comprehensive  Income:  Adjustments
     decreased   cost  of  sales  by  the  amounts  set  forth  in  this  table.
     Consolidated  Balance  Sheets:  Cumulative  adjustments  increased  accrued
     expenses by $1,651 for the period ending July 31, 2004.

(3) Corrections to the estimate of rebate collectibility at July 31, 2004.
     Consolidated  Statements of Income and  Comprehensive  Income:  Adjustments
     increased   cost  of  sales  by  the  amounts  set  forth  in  this  table.
     Consolidated  Balance Sheets:  Cumulative  adjustments  decreased  accounts
     receivable by $64 for the period ending July 31, 2004.

(4)  Relates  to  the  correction  of  accumulated  depreciation  and  unaccrued
     facility  expense.  Consolidated  Statements  of Income  and  Comprehensive
     Income:  Adjustments  increased  cost of sales by the  amounts set forth in
     this table.
     Consolidated Balance Sheets: Adjustments decreased accumulated depreciation
     by $20 and cumulative adjustments increased accounts payable by $40 for the
     period ending July 31, 2004

(5) Income tax benefit related to the adjustments above.
     Consolidated  Statements of Income and  Comprehensive  Income:  Adjustments
     increased  income  tax  expense  by the  amounts  set forth in this  table.
     Consolidated  Balance  Sheets:   Cumulative  adjustment  increased  prepaid
     expenses  and other  current  assets by $700 for the period  ended July 31,
     2004.

As a  result  of  the  foregoing  factors,  the  Company's  unaudited  condensed
consolidated  financial  statements  for the three month and nine month  periods
ended July 31, 2004 have been restated  from amounts  previously  reported.  The
accompanying  consolidated financial data set forth below presents the Company's
consolidated  Statements of Income and Comprehensive Income for the three months
and nine months ended July 31, 2004 and  Consolidated  Balance  Sheet as of July
31, 2004 on a comparative  basis showing the amounts as originally  reported and
as restated.  The restatement  did not result in any change in the  Consolidated
Statement  of Cash Flows  between Cash  Provided by  Operations,  Investing  and
Financing Activities.

As a result of the restatement of the consolidated  financial statements for the
quarter  ended July 31, 2004 net income  increased  by $6, or less than $.01 per
share - diluted  to $866 from  $860 or $.14 per  share - diluted  as  previously
reported.  For the nine months ended July 31, 2004 net income  increased by $97,
or $.02 per share - diluted to $1,520 from $1,423 or $.25 per share - diluted as
previously  reported.  All applicable  financial  information  contained in this
Quarterly Report on Form 10-Q gives effect to these restatements.

                                       6

                    Collins Industries, Inc. and Subsidiaries
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)
                                                                               July 31,                   July 31
                                                                                 2004                      2004
                                                                        -----------------------     --------------------
                                                                                                       (as restated)
ASSETS
Current Assets:
   Cash                                                                           $   107,592              $   107,592
   Receivables, trade & other                                                      11,304,224               11,240,824
   Inventories, lower of cost (FIFO) or market                                     38,894,644               38,894,644
   Prepaid expenses and other current assets                                        2,209,611                2,909,611
                                                                                  -----------              -----------
      Total current assets                                                         52,516,071               53,152,671

Restricted cash                                                                       657,068                  657,068

Property and equipment, at cost                                                    50,443,208               50,443,208
      Less: accumulated depreciation                                               31,117,010               31,097,010
                                                                                   ----------               ----------
      Net property and equipment                                                   19,326,198               19,346,198
Goodwill                                                                            5,050,232                5,050,232
Other assets                                                                        1,328,541                1,328,541
                                                                                  -----------              -----------
      Total assets                                                                $78,878,110              $79,534,710
                                                                                  ===========              ===========

LIABILITIES & SHAREHOLDER'S INVESTMENT
Current liabilities:
   Current maturities of long-term debt & capitalized leases                       $2,483,140               $2,483,140
   Accounts payable                                                                24,374,724               24,415,225
   Accrued expenses                                                                 7,072,044                8,722,424
                                                                                  -----------              -----------
      Total current liabilities                                                    33,929,908               35,620,789

Long-term debt and capitalized leases                                              18,583,591               18,583,591

Deferred income tax                                                                 1,333,571                1,333,571

Shareholders' investment:
   Common stock                                                                       636,920                  636,920
   Paid-in capital                                                                 13,341,803               13,341,803
   Deferred compensation                                                           (1,636,814)              (1,636,814)
   Accumulated other comprehensive income (loss), net                                 (45,020)                 (45,020)
   Retained earnings                                                               12,734,151               11,699,870
                                                                                  -----------              -----------
      Total shareholders' investment                                               25,031,040               23,996,759
                                                                                  -----------              -----------
      Total liabilities & shareholders' investment                                $78,878,110              $79,534,710
                                                                                  ===========              ===========

                                       7

                                                Collins Industries, Inc. and Subsidiaries
                                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                               (Unaudited)

                                                              Three Months Ended                            Nine Months Ended
                                                                   July 31,                                      July 31,

                                                           2004                  2004                  2004                    2004
                                                   --------------------    ----------------    --------------------    -------------------
                                                                            (as restated)                                (as restated)
Sales                                                     $59,069,576         $59,069,576            $150,174,904           $150,228,298
Cost of sales                                              52,325,095          52,309,263             132,934,959            132,815,730
                                                          -----------         -----------            ------------           ------------

   Gross profits                                            6,744,481           6,760,313              17,239,945             17,412,568

Selling, general and administrative
expenses                                                    5,020,542           5,020,542              14,168,913             14,194,802
                                                          -----------         -----------            ------------           ------------

   Income from operations                                   1,723,939           1,739,771               3,071,032              3,217,766

Other income (expense):
   Interest expense                                          (351,900)           (351,900)             (1,111,049)            (1,111,049)
   Other, net                                                  17,770              17,770                 333,490                333,490
                                                          -----------         -----------            ------------           ------------
                                                             (334,130)           (334,130)               (777,559)              (777,559)
                                                          -----------         -----------            ------------           ------------

Income before income taxes                                  1,389,909           1,405,641               2,293,473              2,440,207

Income tax expense                                            530,000             540,000                 870,000                920,000
                                                          -----------         -----------            ------------           ------------

Net income                                                  $ 859,809           $ 865,641             $ 1,423,473            $ 1,520,207

Other comprehensive income, net of tax:
   Unrealized gain on interest rate swap                       20,307              20,307                  56,196                 56,196
                                                          -----------         -----------            ------------           ------------

      Comprehensive income                                $   880,116         $   885,948            $  1,479,669           $  1,576,403
                                                          ===========         ===========            ============           ============

Earnings per share:
   Basic                                                  $       .15         $       .15            $        .24           $        .26
                                                          ===========         ===========            ============           ============
   Diluted                                                $       .14         $       .14            $        .23           $        .25
                                                          ===========         ===========            ============           ============

Dividends per share                                       $      .035         $      .035            $        .10           $        .10
                                                          ===========         ===========            ============           ============

Weighted average common and common
  equivalent shares outstanding:
  Basic                                                     5,758,562           5,758,562               5,842,652              5,842,652
                                                            =========           =========               =========              =========
  Diluted                                                   6,178,537           6,178,537               6,200,556              6,200,556
                                                            =========           =========               =========              =========

                                       8

**(3) Inventories**

Inventories,  which include  material,  labor, and manufacturing  overhead,  are
stated at the lower of cost (FIFO) or market.

Major classes of  inventories as of July 31, 2005 and October 31, 2004 consisted
of the following:

                                        July 31, 2005        October 31, 2004
                                       ---------------      ------------------

       Chassis                            $ 8,781,645             $ 5,767,019
       Raw materials & components          16,766,235              14,997,408
       Work-in-process                     11,006,069               9,037,199
       Finished goods                       9,534,752               9,257,559
                                            ---------               ---------
                                          $46,088,701             $39,059,185
                                          ===========             ===========

**(4) Earnings per Share**

Dilutive  securities,  consisting  of options to purchase the  Company's  common
stock and restricted  stock awards,  are included in the  calculation of diluted
weighted average common shares.  Dilutive  securities for the three month period
ended July 31, 2005 were 236,228. Dilutive securities for the three month period
ended July 31, 2004 were 419,975.  Dilutive securities for the nine months ended
July 31, 2005 were 320,348.  Dilutive  securities for the nine months ended July
31, 2004 were 357,904.

**(5) Contingencies and Litigation**

At July 31, 2005 the  Company had  contingencies  and pending  litigation  which
arose  in the  ordinary  course  of  business.  Litigation  is  subject  to many
uncertainties  and  the  outcome  of the  individual  matters  is not  presently
determinable.  It is management's  opinion that this litigation would not result
in  liabilities  that  would  have a material  adverse  effect on the  Company's
consolidated financial position or results of operations or cash flows.

Certain  workers  compensation  claims have been denied by the Company's  excess
liability  insurance  carrier.  Reserves have been recorded assuming no recovery
from the excess  insurance  carrier is received.  Management  is  disputing  the
denial of coverage by the excess liability insurance carrier but recovery of any
amounts is contingent  and management  cannot  provide any assurances  regarding
recovery  of any  amounts.  The  amount of excess  coverage  being  disputed  is
approximately $0.6 million.

The  Company  was  advised on  February  25,  2005 that the SEC had  initiated a
preliminary  investigation of certain accounting  practices of the Company.  The
Company  has  provided  the  SEC  with  the  results  of  the  Audit   Committee
investigation  described in Note 9 and does not anticipate  any further  inquiry
into this matter.

                                       9

**(6) Segment Information**

The  Company  has three  reportable  segments:  ambulances,  buses and  terminal
trucks/road  construction equipment.  The ambulance segment produces modular and
van type ambulances for sale to hospitals,  ambulance services, fire departments
and other  governmental  agencies.  The bus segment produces small school buses,
commercial buses and shuttle buses for sale to schools,  hotel shuttle services,
airports, and other governmental agencies. The terminal truck/road  construction
equipment  segment  produces  off road  trucks  designed  to move  trailers  and
containers  for  warehouses,  truck  terminals,  rail yards,  rail terminals and
shipping ports and produces a line of road construction equipment.

                                                   Three Months Ended                  Nine Months Ended
       (In Thousands)                                   July 31,                           July 31,

                                                 2005               2004             2005             2004
                                           -----------------    -------------    -------------    --------------
**Revenues from external customers:**                               (as restated)                      (as restated)
   Ambulance                                       $29,106          $20,376         $ 72,951          $ 59,460
   Buses                                            28,531           19,817           56,212            42,211
   Terminal Trucks/Road Construction
     Equipment                                      22,981           18,877           64,296            48,557
                                                    ------           ------           ------            ------
Consolidated Total                                 $80,618          $59,070         $193,459          $150,228
                                                   =======          =======         ========          ========

**Pretax segment profit (loss):**
   Ambulance                                       $   517          $   555         $    361          $  1,929
   Buses                                             1,364              949            1,403               814
   Terminal Trucks/Road Construction
      Equipment                                      2,389              910            4,536             2,227
   Other                                            (1,561)          (1,009)          (4,897)           (2,530)
                                                   -------          -------        ---------          --------
Consolidated Total                                 $ 2,709          $ 1,405        $   1,403          $  2,440
                                                   =======          =======        =========          ========

                                                              As of
                                                   July 31,          October 31,
                                                     2005                2004
                                             -----------------    ----------------
**Segment assets:**
   Ambulance                                         $39,035             $35,165
   Buses                                              21,450              18,100
   Terminal Trucks/Road Construction
      Equipment                                       24,441              21,866
   Other                                               9,362               5,596
                                                     -------             -------
Consolidated Total                                   $94,288             $80,727
                                                     =======             =======

                                       10

**(7) Guarantees and Warranties**

Letters of Credit

The Company has issued various  standby letters of credit in the ordinary course
of business.  No liability has been reflected in the accompanying  balance sheet
and no draws on the Company's standby letters of credit have ever been made. The
current  outstanding  standby  letters of credit are  limited to (i) a letter of
credit  originally  issued  approximately  15 years ago (renewable  annually) as
required  under  Kansas  law  to  backup   self-insured   reserves  for  workers
compensation insurance, (ii) a declining standby letter of credit required under
Texas  law to  backup  certain  industrial  revenue  bonds  issued  for a  plant
expansion in Longview,  Texas in 1999 that is renewable annually and (iii) other
standby  letters of credit related to periodic bids and issued for other similar
purposes.   A  default  in  meeting  an  obligation   or  condition   under  the
above-referenced standby letters of credit could require the Company to record a
liability.  The letters of credit outstanding at July 31, 2005 are summarized as
follows:

                                                                          Date of
Purpose                                                   Amount        Expiration
-------                                                   ------        ----------

Workers compensation - Kansas self-insurance reserves   $1,373,000    April 1, 2006
Industrial revenue bond-Longview, Texas [a]              1,314,911    June 30, 2006
Bids and other                                             638,454       Various

[a] All assets  (originally  $3.0  million)  acquired  with the  proceeds of the
Longview,  Texas industrial  revenue bonds would also be available to offset any
defaults under these  obligations.  The liquidation amount of such assets is not
reasonably estimable.

Warranties

The Company's  products  generally carry explicit product warranties that extend
from  several  months to more  than a year,  based on terms  that are  generally
accepted in the marketplace.  Certain  components  included in the Company's end
products  (such as chassis,  engines,  axles,  transmissions,  tires,  etc.) may
include  warranties  from  original  equipment  manufacturers  (OEM).  These OEM
warranties are generally passed on to the end customer of the Company's products
and  the  customer  generally  deals  directly  with  the  applicable  component
manufacturer.  The Company records  provisions for estimated  warranty and other
related costs at the time of sale based on historical  warranty loss  experience
and periodically adjusts these provisions to reflect actual experience.  Certain
warranty and other related claims involve matters of dispute that ultimately are
resolved by  negotiation,  arbitration or litigation.  Infrequently,  a material
warranty  issue may arise which is beyond the scope of the Company's  historical
experience.  The Company  provides for any such  warranty  issues as they become
known and estimable. It is reasonably possible that from time to time additional
warranty and other  related  claims could arise from  disputes or other  matters
beyond the scope of the Company's  historical  experience.  The following tables
provide the changes in the Company's product warranties (in thousands):

                                       11

Reconciliation of Accrued Warranties
For the Three Months Ended July 31,                          2005        2004
-----------------------------------------------------     ----------  ----------

Accrued warranties at beginning of period                   $1,350       $1,146

Provisions for warranties charged against income               621          373

Payments and adjustments of warranties                        (565)        (348)
                                                              ----         ----

Accrued warranties at end of period                         $1,406       $1,171
                                                            ======       ======

Reconciliation of Accrued Warranties
For the Nine Months Ended July 31,                           2005        2004
-----------------------------------------------------     ----------  ----------

Accrued warranties at beginning of period                   $1,184       $1,133

Provisions for warranties charged against income             1,552        1,021

Payments and adjustments of warranties                      (1,330)        (983)
                                                            ------         ----

Accrued warranties at end of period                         $1,406       $1,171
                                                            ======       ======

**(8) Stock Based Compensation**

At July 31, 2005 the Company had two stock-based  employee  compensation  plans,
which are more fully described in Note 6 of the "Notes to Consolidated Financial
Statements"  in the  Company's  2004 Form 10-K.  The Company  accounts for these
plans under the recognition  and  measurement  principles of APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations. No stock
based compensation cost is reflected in net income, as all options granted under
those plans had an exercise  price equal to the market  value of the  underlying
common stock on the date of grant. No stock options have been granted since 1999
and therefore, no proforma net income disclosures are required.

**(9) Audit Committee Investigation**

On January 31, 2005, the Company  announced  that it was delaying  filing of the
Form 10-K for the year ended  October  31,  2004 as Company  management  and the
Audit Committee of its Board of Directors were  investigating  and analyzing the
Company's manner of establishing reserves in various worker's compensation cases
in the states of Kansas and  Florida.  The  decision to delay filing of the Form
10-K for the year  ended  October  31,  2004 was made to  permit  the  Company's
management and Audit Committee to complete the investigation  and analysis,  and
to allow its independent  registered  public  accounting firm sufficient time to
complete the audit of the Company's October 31, 2004 financial statements.

The Audit Committee hired independent legal counsel and an independent insurance
consultant to assist in its investigation of the workers compensation  reserves.
Due to the complexity of calculating the reserves  required at the various dates
and the  difficulty of estimating  the reserve

                                       12

amount  in  each  case,   additional  time  was  needed  to  ensure  a  complete
investigation  and this factor  caused the Company to not be in position to file
its periodic reports with the SEC on a timely basis.

The Company  discovered  issues with workers'  compensation  claims for injuries
dating back to 1990. The special  investigation  revealed that Company personnel
with  responsibility  for setting reserves did so in an aggressive  manner which
caused the third-party  administrator  adjusters to recommend reserves at levels
lower than they would have  otherwise  recommended.  Personnel  also  employed a
practice  known as  stair-stepping  reserves for certain  claims.  This involves
recording  reserves initially at an amount lower than the amount the claim would
be expected to settle for and  increasing  the reserve  over time.  In addition,
several  Florida  claims that had  existed  for an  extended  period of time had
reserves which had been set artificially low and then increased  periodically to
reflect  on-going  payments to  claimants.  The accrual of these  amounts in the
period that claims were incurred  resulted in a charge to retained  earnings for
periods prior to October 31, 2001 and a reversal of reserves in subsequent years
to reflect amounts that should already have been recorded.

On May 12, 2005, the Company  announced that its Audit Committee had recommended
revised  procedures for establishing  workers'  compensation  reserves.  Revised
procedures were put in place to help ensure reserve  recommendations made by the
third  party  administrator  ("TPA")  are  recorded.  Procedures  also  prohibit
inappropriate  influence  by  management  in  the  determination  of  the  TPA's
recommended reserve amounts. The revised procedures require increased accounting
oversight  to help insure  reserves are recorded in  accordance  with  generally
accepted   accounting   principles.   The  Board  of   Directors   approved  the
recommendation.

**(10) Other Matters**

The delay in providing audited financial  statements for the year ending October
31, 2004 would have constituted a covenant  violation  pursuant to the Company's
Loan and  Security  Agreement.  The  Company  obtained a waiver  from its lender
regarding this event.  The delay in providing the audited  financial  statements
also  resulted in  non-compliance  under  other debt  agreements,  although  the
non-compliance  did not  result  in an event of  default.  The  Company  has not
received any default  notifications.  Management believes all default conditions
have now been remedied and the Company is in compliance with its covenants under
its lending agreements.

On February  22,  2005,  the  Company  announced  that it  received  notice of a
determination by NASDAQ's Listing  Qualifications Staff that it failed to comply
with NASDAQ listing  standards set forth in NASDAQ  Marketplace Rule 4310(c)(14)
due to the delayed  filing with the  Securities  and Exchange  Commission of its
annual report on Form 10-K for the period ended  October 31, 2004,  and that its
common stock would  therefore be subject to delisting  from the NASDAQ  National
Market.  On May 16, the common stock of the Company was delisted from the NASDAQ
National Market due to the delay in filing its annual report on Form 10-K.

On May 13, 2005, the Company's Mid Bus subsidiary  completed the purchase of its
Bluffton,  Ohio  manufacturing  facility  for a  purchase  price  of  $2,000,000
financed by the  Company's  lead bank.  This  property was leased prior to being
purchased.  In addition to the purchase price, the Company agreed to purchase up
to $1,000,000  of parts or products at customary  prices and terms over the next
five years from an affiliate of the seller. Certain penalties are imposed on the
Company if it is unable or unwilling to meet this purchase commitment.

                                       13

On March 21, 2005,  the Company  reported  that the Executive  Vice  President -
Operations,  Terry L. Clark, and Chief Financial Officer,  Larry Sayre,  retired
effective March 18, 2005. On April 1, 2005,  Randall Swift became Vice President
and Chief  Operating  Officer of the Company.  On May 23, 2005,  Cletus Glasener
became Vice President of Finance and Chief Financial  Officer of the Company.  A
charge to income totaling  approximately $1.1 million was recorded in the second
quarter of fiscal year 2005.  This amount  represents  the  estimated  severance
obligation to the two executives who retired.

                                       14

**Item 2 - Management's  Discussion and Analysis of Financial Condition and Result****of Operations*****GENERAL***

The following  discussion and analysis  provides  information  which  management
believes  is  relevant  to an  assessment  and  understanding  of the  Company's
consolidated  results of operations  and  financial  condition.  The  discussion
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto.

                                                  Three Months Ended             Nine Months Ended
                                                       July 31,                      July 31,

                                                 2005           2004            2005           2004
                                                 ----           ----            ----           ----
                                                             (restated)                     (restated)

Sales                                           100.0%         100.0%          100.0%         100.0%
Cost of sales                                    89.4           88.5            90.1           88.4
                                                 ----           ----            ----           ----
          Gross profit                           10.6           11.5            9.9            11.6

Selling, general and administrative expenses      6.5            8.5            8.4             9.4
                                                  ---            ---            ---             ---

          Income from operations                  4.1            3.0            1.5             2.2

Other income (expense):
   Interest, net                                 (0.7)          (0.6)          (0.8)           (0.7)
   Other, net                                     0.0            0.0            0.0             0.2
                                                  ---            ---            ---             ---

          Income before provision for
             income taxes                         3.4            2.4            0.7             1.7

Income tax provision                             (1.4)          (0.9)          (0.3)           (0.6)
                                                 -----          ----           -----           ----

          Net income                              2.0%           1.5%           0.4%            1.1%

***OVERVIEW***

Collins  Industries,  Inc. is a manufacturer of specialty vehicles and has three
reportable segments:  ambulances,  buses and terminal  trucks/road  construction
equipment.  The ambulance  segment  produces modular and van type ambulances for
sale to hospitals,  ambulance services,  fire departments and other governmental
agencies.  The bus segment  produces  small school buses,  commercial  buses and
shuttle buses for sale to schools,  hotel shuttle services,  airports, and other
governmental agencies.  The terminal trucks/road  construction equipment segment
produces   off-road   trucks  designed  to  move  trailers  and  containers  for
warehouses,  truck terminals,  rail yards, rail terminals and shipping ports and
produces a line of road  construction  equipment.  Each of the Company's product
groups is responsible for its own marketing activities and maintains independent
relationships with dealers and distributors.

The accounting  policies of the segments are the same as those  described in the
summary  of  significant  accounting  policies  of the  "Notes  to  Consolidated
Financial  Statements" in the

                                       15

Company's 2004 Form 10-K. The Company  evaluates  performance based on profit or
loss from operations  before income taxes not including  nonrecurring  gains and
losses.

The Company  accounts for  intersegment  sales and  transfers as if the sales or
transfers  were to third  parties,  with all  intercompany  sales  eliminated in
consolidation.

The  Company's  reportable  segments  are  strategic  business  units that offer
different  products  and  services.  They are managed  separately  because  each
business requires different technology and marketing strategies.

The  Company  posted a 56%  increase  in its sales  backlog at July 31,  2005 to
$116.0  million  compared  to $74.3  million at July 31,  2004.  The  backlog at
October  31,  2004 was $68.5  million.  The  increased  backlog at July 31, 2005
resulted  from  increased   orders  primarily  in  the  Terminal  Truck  /  Road
Construction and Ambulance segments. Approximately 63% and 35% of the backlog is
expected to be converted  into sales  during the  remainder of FY 2005 and in FY
2006,  respectively,  with the remaining backlog coverted to sales subsequent to
October 31, 2006.

See "Segment Information" (Note 6 to the Consolidated  Financial Statements) for
quantitative segment information.

***RESULTS OF OPERATIONS******Three months ended July 31***
Consolidated  sales for the three  months ended July 31, 2005  increased  36% to
$80.6 million  compared to $59.1 million for the same period last year. This was
the result of increases of 43%, 44% and 22% in the  ambulance,  bus and terminal
truck/road construction product segments, respectively.

Consolidated  gross profit for the three  months  ended July 31, 2005  increased
$1.8  million  or 26.6%  over the same  period  last  year.  This  increase  was
principally  due to the impact of higher sales and was  partially  offset by the
impact of raw  material  cost  increases  absorbed on units  before  sales price
increases were initiated.

Consolidated selling,  general and administrative  expenses for the three months
ended July 31, 2005 increased $0.3 million or 5% over the same period last year.
This increase was principally due to auditing and legal expense  associated with
the restatement of the 2004 financial statements.

Interest  expense for the three  months  ended July 31, 2005  increased to $0.56
million  compared to $0.35  million in the same period last year.  This increase
was  principally  a result  of an  overall  increase  of the  Company's  average
borrowings throughout most of the third quarter of fiscal 2005 to fund increased
inventory and interest rate increases.

The Company posted  consolidated  net income of $1.65 million ($0.26 per share -
diluted)  for the three  months  ended July 31,  2005  compared to net income of
$0.87  million  ($0.14 per share - diluted)  for the same period last year.  The
improvement for the three months ended July 31, 2005  principally  resulted from
increased revenue and gross profits.

***Nine  months ended July 31***
Consolidated  sales for the nine  months  ended July 31, 2005  increased  29% to
$193.5 million  compared to $150.2  million the same period last year.  This was
the result of increases of 23%,

                                       16

33% and 32% in the ambulance,  bus and terminal truck/road  construction product
segments, respectively.

Consolidated  gross  profit for the nine months  ended July 31,  2005  increased
$1.68 million or approximately 10% over the same period last year. This increase
was principally due to the increased sales volume.

Consolidated  selling,  general and administrative  expenses for the nine months
ended July 31, 2005  increased  $2.0  million  over same period last year.  This
increase  was  principally  due to  severance  accruals  and  auditing and legal
expense associated with the restatement of the 2004 financial statements.

Interest  expense for the nine months  ended July 31,  2005  increased  to $1.50
million  compared to $1.11  million in the same period last year.  This increase
was  principally  a result  of an  overall  increase  of the  Company's  average
borrowings throughout most of fiscal 2005 combined with interest rate increases.

Other income for the nine months ended July 31, 2005 was $0.03 million  compared
to $0.33  million for the same period last year. Of the amount for the period in
2004,  $0.30  million  resulted  from a  nonrecurring  gain  from  the sale of a
building and land.

The Company posted  consolidated  net income of $0.87 million ($0.14 per share -
diluted) for the nine months ended July 31, 2005 compared to net income of $1.52
million  ($0.25 per share - diluted) for the same period last year. The decrease
in net income for the nine months ended July 31, 2005 resulted  principally from
increases in general and administrative expenses associated with the restatement
of the 2004  financials  combined  with a reduction  in gross  margins  from the
impact of raw  material  cost  increases  absorbed on units  before  sales price
increases were initiated.

**AMBULANCE SEGMENT*****Three months ended July 31***
For the three months ended July 31, 2005, the ambulance segment sales were $29.1
million or 36.1% of the Company's  consolidated  sales compared to $20.4 million
or 34.5% for the same  period in fiscal  2004.  Unit volume  sales of  ambulance
products  increased  34.7% for the three months ended July 31, 2005  compared to
the same period in fiscal 2004.  This increase was  principally due to increased
unit sales in all model types.  Ambulance products average selling prices in the
three months ended July 31, 2005  increased  6.0% compared to the same period in
fiscal 2004 primarily due to model mix.

For the three  months  ended  July 31,  2005,  ambulance  segment  gross  profit
decreased 1.6% and selling,  general and administrative  expenses decreased 7.1%
compared to the same period last year. The gross profit decline was  principally
due to reduced chassis and parts margins.

Pretax  profit of the ambulance  segment  decreased by 6.8% to $0.52 million for
the three  months  ended July 31, 2005  compared  to $0.56  million for the same
period  last  year  principally  as a result  of the  materials  cost  increases
discussed above.

                                       17

***Nine months ended July 31***
For the nine months ended July 31, 2005, the ambulance  segment sales were $73.0
million or 37.7% of the Company's  consolidated  sales compared to $59.5 million
or 39.6% for the same period last year. Unit volume sales of ambulance  products
increased  18.0% for the nine months  ended July 31,  2005  compared to the same
period in fiscal 2004. This increase was principally due to increased unit sales
to  governmental   agencies.   Ambulance   products   selling  prices  increased
approximately  4.4% in the nine months ended July 31, 2005  compared to the same
period in fiscal  2004.  This  increase  principally  resulted  from  changes in
product mix.

For the nine  months  ended  July  31,  2005,  ambulance  segment  gross  profit
decreased  18.9% and  selling,  general and  administrative  expenses  were flat
compared  to the same  period in  fiscal  2004.  Substantially  all of the gross
profit decrease was principally due to the impact of raw material cost increases
absorbed on units before sales price increases were initiated.

Pretax  profit of the  ambulance  segment was $0.36  million for the nine months
ended July 31, 2005 compared to $1.9 million for the same period last year.  The
reduction in pretax income principally  resulted from the result of raw material
cost increases absorbed on units before sales price increases were initiated.

**BUS SEGMENT*****Three months ended July 31***
For the three months ended July 31, 2005,  bus segment  sales were $28.5 million
or 35.4% of the Company's  consolidated sales compared to $19.8 million or 33.5%
for the same period last year.  This increase was  principally  due to increased
sales to child care providers and contractors and increased  chassis sales.  The
average  unit  selling  price of bus  products  increased  by 33.4% in the three
months  ended  July  31,  2005  compared  to the same  period  in  fiscal  2004.
Substantially  all of this unit price increase  resulted from increased  chassis
sales.

For the three  months  ended July 31,  2005,  gross  profit  increased  2.6% and
selling,  general and administrative expenses decreased by 12.2% compared to the
same  period last year.  The  increase in gross  profit was  principally  due to
increase in sales volume for the three months. The reduction in selling, general
and  administrative  expense was  principally a result of lower  promotion,  and
sales policy allowance expenses.

Pretax  profit of the bus  segment  increased  by 43.7% to $1.4  million for the
three months ended July 31, 2005  compared to $0.95  million for the same period
last year. This increase  principally  resulted from an increase in sales volume
combined with the reduction of selling,  general and administrative expenses for
the three months.

***Nine months ended July 31***
For the nine months ended July 31, 2005, bus segment sales were $56.2 million or
29.1% of the Company's consolidated sales compared to $42.2 million or 28.1% for
the same period last year. The increase was principally due to increased chassis
sales and increased sales to child care providers and  contractors.  Unit volume
sales of bus products  increased by 8.4% for the nine months ended July 31, 2005
compared to the same period in fiscal 2004. This increase was principally due to
increased sales to child care providers and contractors.  The average unit price
of bus  products  increased  by 30.7% in the nine  months  ended  July 31,  2005
compared to the same period in fiscal 2004. Substantially all of this unit price
increase resulted from increased chassis sales.

                                       18

For the nine months ended July 31,  2005,  bus segment  gross  profit  increased
22.5%  compared to the same period last year.  The  increase in gross profit was
principally  attributable to increases in sales volumes discussed above combined
with temporary production  inefficiencies during the first nine months of fiscal
2004.  For  the  nine  months  ended  July  31,  2005,   selling,   general  and
administrative expenses increased by 1.8% compared to the same period last year.
This increase was principally a result of higher promotional expenses, partially
offset by a reduction in sales policy allowances.

The bus  segment  earned $1.4  million  for the nine months  ended July 31, 2005
compared to pretax  earnings of $0.8  million in the same period in fiscal 2004.
The  improvement  was  principally  attributable  to increases in sales  volumes
discussed  above,  partially  offset  by  increases  in  selling,   general  and
administrative expenses and increases in interest expense.

**TERMINAL TRUCK/ROAD CONSTRUCTION SEGMENT*****Three months ended July 31***
For the three  months  ended July 31,  2005,  terminal  truck/road  construction
segment sales were $23.0 million or 28.5% of the  Company's  consolidated  sales
compared to $18.9  million or 32.0% for the same  period last year.  Unit volume
sales of terminal  truck/road  construction  products increased by 10.7% for the
three  months  ended July 31, 2005  compared to the same period in fiscal  2004.
This  increase  was  principally  due to the impact of  additional  export sales
associated  with  foreign  stevedoring  operations.  Additionally,  this segment
continued  to  experience a rebound in the number of road  sweepers  sold to the
domestic  rental  market.   The  average  unit  price  of  terminal   truck/road
construction products increased by 10.7% in the three months ended July 31, 2005
compared to the same period in fiscal 2004.  Substantially  all of this increase
related to the product mix of terminal truck products.

For the three  months  ended July 31,  2005,  terminal  truck/road  construction
segment gross profit  increased  85.2% and selling,  general and  administrative
expenses  increased by 17.0% compared to the same period last year. The increase
in gross profit was  principally a result of the higher sales volumes  described
above.  The  increase  in  selling,  general  and  administrative  expenses  was
principally  due to  higher  commissions  associated  with  improved  sales  and
profitability.

The pretax income of the terminal truck/road  construction  segment increased to
$2.4 million for the three months ended July 31, 2005  compared to $0.91 million
in the same  period  last year.  The pretax  income of the  terminal  truck/road
construction segment increased principally as a result of the sales volume gains
discussed above.

***Nine months ended July 31***
For the nine  months  ended  July 31,  2005,  terminal  truck/road  construction
segment sales were $64.3 million or 33.2% of the  Company's  consolidated  sales
compared to $48.6  million or 32.3% for the same  period last year.  Unit volume
sales of terminal  truck/road  construction  products increased by 26.4% for the
nine months ended July 31, 2005 compared to the same period in fiscal 2004. This
increase was principally due to the impact of additional export sales associated
with foreign stevedoring  operations and higher domestic sales to intermodal and
warehousing  customers.  Additionally,  this segment  continues to experience an
increase in the number of road sweepers sold to the domestic rental market.  The
average unit price of terminal  truck/road  construction  products  increased by
8.7% in the nine  months  ended July 31,  2005  compared  to the

                                       19

same  period in fiscal  2004.  Substantially  all of this  unit  price  increase
related to the product mix of terminal truck products.

For the nine  months  ended  July 31,  2005,  terminal  truck/road  construction
segment gross profit  increased  50.7% and selling,  general and  administrative
expenses  increased by 15.4% compared to the same period last year. The increase
in gross  profit was  principally  a result of higher  sales  volumes  described
above.  The  increase  in  selling,  general  and  administrative  expenses  was
principally due to higher promotional  expenses and commissions  associated with
improved sales and profitability.

The pretax income of the terminal truck/road  construction  segment increased to
$4.54  million for the nine months ended July 31, 2005 compared to $2.23 million
in the same  period  last year.  The pretax  income of the  terminal  truck/road
construction segment increased principally as a result of the sales volume gains
discussed above.

**LIQUIDITY AND CAPITAL RESOURCES**

The Company used existing credit lines,  proceeds from Industrial Revenue Bonds,
internally  generated  funds and supplier  financing to fund its  operations and
capital expenditures for the nine months ended July 31, 2005.

Cash used in  operations  was $1.3  million for the nine  months  ended July 31,
2005,  compared to cash  provided  by  operations  of $4.6  million for the same
period last year.  Cash used in operations was principally due to an increase in
inventories  of $7.0  million and an increase  in  accounts  receivable  of $5.3
million. These uses of cash were partially offset by net income of $0.9 million,
an increase in accounts payable of $3.9 million, an increase in accrued expenses
of $2.5 million and a decrease in prepaid expenses of $1.0 million.

Cash used in  investing  activities  was $4.4  million for the nine months ended
July 31,  2005  compared to $0.9  million  for the same  period  last year.  The
increase in cash used by  investing  activities  was  principally  due to higher
capital  expenditures  for the nine months ended July 31, 2005 and proceeds from
the sale of a building and land in the first fiscal quarter of 2004.

Cash flow provided by financing  activities was $5.6 million for the nine months
ended July 31, 2005  compared to a use of $3.7  million for the same period last
year. This change  principally  resulted from higher borrowing in fiscal 2005 to
finance increased inventory and capital expenditures and the use of $5.3 million
in fiscal 2004 for the  repurchase of 1,050,879  shares of the Company's  common
stock in a modified Dutch auction tender offer.

The Company  believes that its cash flows from  operations,  its credit facility
with its lead bank and unused funds  restricted for future capital  expenditures
will be  sufficient  to  satisfy  its  future  working  capital  needs,  capital
expenditure  requirements and anticipated dividends.  The total amount of unused
revolving credit available to the Company was $10.8 million at July 31, 2005.

The credit facility is collateralized by receivables, inventories, equipment and
certain real property. Under the terms of the Agreement, the Company is required
to  maintain  certain  financial  ratios  and other  financial  conditions.  The
Agreement  also  prohibits  the  Company  from  incurring   certain   additional
indebtedness,  limits  certain  investments,  advances  or loans  and  restricts
substantial asset sales and capital expenditures. The delay in providing audited
financial statements for the year ending October 31, 2004 constituted a covenant
violation  pursuant to the

                                       20

Agreement.  The Company  obtained a waiver from its lender regarding this event.
The delay in  providing  the  audited  financial  statements  also  resulted  in
non-compliance under other debt agreements,  although the non-compliance did not
result  in an event  of  default.  The  Company  has not  received  any  default
notifications. Management believes all default conditions have now been remedied
and  the  Company  is  in  compliance  with  its  covenants  under  its  lending
agreements.

It is customary  practice for  companies in the  specialty  vehicle  industry to
enter into repurchase  agreements  with financing  institutions to provide floor
plan financing for dealers.  In the event of a dealer default,  these agreements
generally  require the repurchase of products at the original  invoice price net
of certain adjustments.  The risk of loss under the agreements is limited to the
risk that  market  prices for these  products  may  decline  between the time of
delivery to the dealer and time of  repurchase  and resale by the  Company.  The
risk  is  spread  over  numerous  dealers  and  the  Company  has  not  incurred
significant  losses under these  agreements.  In the opinion of management,  any
future losses under these  agreements will not have a material adverse effect on
the  Company's  financial  position  or results  of  operations.  The  Company's
repurchase obligation under these agreements is limited to vehicles which are in
new  condition  and as to which the dealer  still  holds  title.  The  Company's
contingent  obligation under such agreements was  approximately  $3.7 million at
July 31, 2005.

***CRITICAL ACCOUNTING PRINCIPLES AND ESTIMATES***

The Company's  consolidated financial statements are prepared in conformity with
accounting  principles  generally accepted in the United States. The preparation
of these  financial  statements  requires the use of estimates,  judgments,  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses  during  the  periods  presented.  We  believe  that  of  our  critical
accounting  policies,  the  following  may involve a higher degree of judgments,
estimates, and complexity:

**Inventories**

The Company values its  inventories at the lower of cost or market.  The company
has  chosen  the  first-in,   first-out   (FIFO)  cost  method  of  valuing  its
inventories. The effect of the FIFO method is to value ending inventories on the
balance  sheet at their  approximate  current or most  recent  cost.  The market
values for finished goods  inventories  are  determined  based on recent selling
prices.

**Goodwill and Other Assets**

In June 2002, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  No. 142,  "Goodwill  and Other  Intangible
Assets" (SFAS No. 142).  SFAS No. 142 was  effective for fiscal years  beginning
after December 15, 2002.  Goodwill is no longer  amortized over future  periods,
but will be assessed for  impairment at least  annually using a fair value test.
The Company adopted this new standard on November 1, 2002.

As of  October  31,  2004,  the  Company  tested for  impairment  of the bus and
terminal  truck/road  construction  business  segments using the discounted cash
flow  approach and  determined  that the fair values for each of these  segments
exceeded  the related  carrying  values.  On an on-going  basis,  and absent any
impairment  indicators,  the Company will  annually  conduct  similar  tests and
record any  impairment  loss.  Management  believes that the estimates of future
cash flows and fair values are reasonable; however, changes in estimates of such
cash flows and fair value could affect the evaluations.

                                       21

**Insurance Reserves**

In periods prior to fiscal year 2005 the Company  failed to  adequately  provide
for estimated future workers  compensation  costs related to certain claims that
have been denied by the Company's  excess  liability  insurance  carrier and for
certain other claims. When management discovered the error, an independent third
party  administrator  was  retained to estimate  and  determine  the  additional
potential  liability related to these claims. The Company is currently disputing
the denial of coverage by the excess liability insurance carrier, but the amount
of future recovery, if any, can not be assured.

Generally,  the Company is self-insured  for worker's  compensation  for certain
subsidiaries and for all group medical insurance. Under these plans, liabilities
are recognized for claims incurred  (including claims incurred but not reported)
and changes in the reserves. At the time a workers' compensation claim is filed,
a  liability  is  estimated  to settle the claim.  The  liability  for  workers'
compensation claims is determined based on management's  estimates of the nature
and  severity of the claims and based on analyses by third party  administrators
and by various state statutes and reserve  requirements.  Since the liability is
an  estimate,  the  ultimate  liability  may be more or less than  reported.  If
previously  established  accruals are required to be adjusted,  such amounts are
included in cost of sales. Group medical reserves are funded through a trust and
are estimated using historical claims' experience.

Effective  July  1,  2005,  the  Company   purchased   guaranteed  cost  workers
compensation  insurance for the states in which it had previously  self-insured.
The  Company  continues  to  be  self-insured  in  certain  states  for  workers
compensation claims incurred prior to July 1, 2005.

Due to the nature of the Company's  products,  the Company is subject to product
liability claims in the normal course of business. To the extent permitted under
applicable law, the Company  maintains  insurance to reduce or eliminate risk to
the Company. This insurance coverage includes self-insured  retentions that vary
each year.

The Company maintains excess liability insurance with outside insurance carriers
to  minimize  its  risks  related  to  catastrophic  claims  in  excess  of  all
self-insured positions.  Any material change in the aforementioned factors could
have an adverse impact on our operating results.

**Warranties**

The Company's  products  generally carry explicit product warranties that extend
from  several  months to more  than a year,  based on terms  that are  generally
accepted in the marketplace.  Certain  components  included in the Company's end
products  (such as chassis,  engines,  axles,  transmissions,  tires,  etc.) may
include  warranties  from  original  equipment  manufacturers  (OEM).  These OEM
warranties are generally passed on to the end customer of the Company's products
and  the  customer  generally  deals  directly  with  the  applicable  component
manufacturer.  The Company records  provisions for estimated  warranty and other
related costs at the time of sale based on historical  warranty loss  experience
and periodically adjusts these provisions to reflect actual experience.  Certain
warranty and other related claims involve matters of dispute that ultimately are
resolved by  negotiation,  arbitration or litigation.  Infrequently,  a material
warranty  issue may arise which is beyond the scope of the Company's  historical
experience.  The Company  provides for any such  warranty  issues as they become
known and estimable. It is reasonably

                                       22

possible that from time to time  additional  warranty and other  related  claims
could arise from  disputes or other  matters  beyond the scope of the  Company's
historical experience.

**Revenue Recognition**

The Company  records  vehicle  sales,  and passes title to the customer,  at the
earlier of  completion of the vehicle and receipt of full payment or shipment or
delivery to the customer as specified by the customer  purchase order.  Customer
deposits  for partial  payment of vehicles  are  deferred and treated as current
liabilities  until the  vehicle is  completed  and  recognized  as  revenue.  In
instances  where revenue has been recognized and the vehicle is on the Company's
property,  the customer has  instructed  in writing the Company to hold the unit
for specific business reasons,  a delivery date normally within the next 30 days
has been  established,  the  vehicles  are  complete,  ready for  shipment,  and
segregated  from other  vehicles,  and the risk of  ownership  has passed to the
customer.

***NEW ACCOUNTING PRONOUNCEMENTS***

In November 2004, the FASB issued FASB Statement No. 151,  "Inventory  Costs: an
amendment  of ARB No.  43".  FASB No.  151 will no longer  permit  companies  to
capitalize  inventory  costs on their balance sheets when the production  defect
rate varies  significantly  from the expected rate. The statement also clarifies
that fixed overhead should be allocated to inventory based on "normal capacity".
The  statement is effective for the Company  beginning on November 1, 2005.  The
Company is unable to estimate the financial  statement  impact of this statement
at this time.
In December  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation  46R  (FIN  46R),  a  revision  to  Interpretation  46 (FIN  46),
Consolidation  of Variable  Interest  Entities.  FIN 46R  clarifies  some of the
provisions of FIN 46 and exempts certain entities from its requirements. FIN 46R
is effective at the end of the first interim period ending after March 15, 2004.
Entities that have adopted FIN 46 prior to this  effective  date can continue to
apply  the  provisions  of FIN 46 until the  effective  date of FIN 46R or elect
early  adoption  of FIN 46R.  The  adoption of FIN 46 and FIN 46R did not have a
significant  impact  on  our  financial  statements.  FASB  Statement  No.  123,
Accounting for Stock-Based Compensation,  was revised in December 2004 ("Revised
Statement").  The Revised  Statement,  Share Based Payment,  also supersedes APB
Opinion  No. 25,  Accounting  for Stock  Issued to  Employees,  and its  related
implementation  guidance.  The Revised Statement  establishes  standards for the
accounting for transactions in which an entity exchanges its equity  instruments
for goods or services. It also addresses  transactions in which an entity incurs
liabilities  in exchange for goods or services  that are based on the fair value
of the  entity's  equity  instruments  or that may be settled by the issuance of
those equity  instruments.  For the Company,  the Revised Statement is effective
November 1, 2005. The adoption of this Revised Statement is not expected to have
a material impact on our financial statements.

                                       23

***CAUTIONARY  STATEMENTS  REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
RESULTS***

This report and other written reports and oral statements made from time to time
by the Company  may contain  so-called  "forward-looking  statements"  about the
business,  financial  condition and  prospects of the Company,  all of which are
subject  to risks and  uncertainties.  One can  identify  these  forward-looking
statements by their use of words such as "expect", "plans", "will", "estimates",
"forecasts",  "projects",  and  other  words of  similar  meaning.  One can also
identify  them by the fact that they do not relate  strictly  to  historical  or
current  facts.  One should  understand  that it is not  possible  to predict or
identify all factors, which involve risks and uncertainties.  Consequently,  the
reader  should not consider any such list or listing to be a complete  statement
or all potential risks or uncertainties.

The  forward-looking  statements are made pursuant to the safe harbor provisions
of the Private  Securities  Litigation  Reform Act of 1995. The Company believes
the  assumptions  underlying  these  forward-looking  statements are reasonable;
however,  any of the  assumptions  could be inaccurate,  and  therefore,  actual
results  may differ  materially  from  those  projected  in the  forward-looking
statements due to certain risks and  uncertainties,  including,  but not limited
to, changes in funds budgeted by Federal,  state and local governments,  changes
in  product  demand,  the  availability  of key raw  materials,  components  and
chassis, various inventory risks due to changes in market conditions, changes in
competition,  substantial  dependence  on third  parties  for  product  quality,
interest rate  fluctuations,  adequate  direct labor pools,  development  of new
products, changes in tax and other governmental rules and regulations applicable
to the Company,  reliability and timely fulfillment of orders and other risks as
indicated in the Company's filings with the Securities and Exchange  Commission.
The Company  undertakes no  obligation to publicly  release any revisions to any
forward-looking  statements  contained herein to reflect events or circumstances
occurring after the date released or to reflect the occurrence of  unanticipated
events.

The  Company  does not  assume  the  obligation  to update  any  forward-looking
statement.  One should  carefully  evaluate such  statements in light of factors
described in the Company's filings with the Securities and Exchange  Commission,
especially on Forms 10-K, 10-Q and 8-K (if any).

                                       24

**Item 3 - Quantitative and Qualitative Disclosures About Market Risk**

There has been no material change in this disclosure.

**Item 4 - Controls and Procedures**

For the period  covered by this report,  the Company  carried out an evaluation,
under the supervision and with the  participation  of the Company's  management,
including the Company's Chief Executive Officer and Chief Financial Officer,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures. Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures  (as defined in Rule 13a - 15(e) or Rule  15d-15(e) of the Securities
Exchange Act of 1934,  as amended (the  "Exchange  Act") are effective to ensure
that information  required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded,  processed,  summarized and
reported within the required time periods. There are inherent limitations to the
effectiveness  of  any  system  of  disclosure  controls  and  procedures.  Even
effective  disclosure  controls  and  procedures  can  only  provide  reasonable
assurance of achieving their control objectives.

Attached as  Exhibits  31.1 and 31.2 to this  report are  certifications  of the
Chief Executive  Officer and Chief Financial Officer required in accordance with
Rule 13a-14(a) of the Exchange Act. This portion of the Company's  annual report
includes the information  concerning the controls  evaluation referred to in the
certifications  and should be read in conjunction with the  certifications for a
more complete understanding of the topics presented.

Except as  described  below,  there were no changes  in the  Company's  internal
control over  financial  reporting  that  occurred  during this period that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's  internal control over financial  reporting.  During their fiscal year
2004 year-end review,  the Company's prior independent  accountants,  identified
and reported to management and the Audit Committee two material weaknesses under
standards  established by the Public Company Accounting Oversight Board (PCAOB).
A material weakness is a significant  deficiency,  or combination of significant
deficiencies,  that  results  in more than a remote  likelihood  that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. A significant deficiency is a control deficiency, or combination of
control deficiencies,  that adversely affects the Company's ability to initiate,
authorize,  record,  process,  or report  external  financial  data  reliably in
accordance with generally accepted accounting principles such that there is more
than a remote  likelihood that a misstatement of the company's annual or interim
financial  statements that is more than inconsequential will not be prevented or
detected.

The material weaknesses were identified as:

(1) Control Policies and Procedures

         The Company did not have effective  policies and  procedures  regarding
         management override of controls, and it did not have effective policies
         and procedures  implementing its Code of Conduct.  As a result,  it did
         not  maintain  a control  environment  that  promoted  open and  candid
         communication.  In some instances,  certain  officers and personnel did
         not  communicate   critical   information  needed  to  properly  record
         transactions.   These  deficiencies   result  in  more  than  a  remote
         likelihood that a material  misstatement of interim or annual financial
         statements could occur and not be detected.

                                       25

(2) Workers' Compensation Reserves

         The  Company  had  inadequate  controls  in  place to  record  worker's
         compensation  reserves in accordance with generally accepted accounting
         principles.  Specifically,  it did not have  appropriate  policies  and
         procedures to ensure the estimates provided by an independent insurance
         advisor,   which  was  utilized  to  assist  in   estimating   workers'
         compensation   reserves  were   appropriate.   As  a  result,   workers
         compensation  reserves were  materially  misstated in previously  filed
         consolidated  financial statements.  Historical  consolidated financial
         statements have been restated to correct these errors.

The Company has taken steps to correct the material  weaknesses  identified  and
will  continue to evaluate the material  weaknesses  and will take all necessary
action to correct the internal control deficiencies identified. The Company will
also further  develop and enhance its  internal  control  policies,  procedures,
systems  and staff to allow it to  mitigate  the risk that  material  accounting
errors  might  go  undetected  and be  included  in its  consolidated  financial
statements.

The Company contemplates  undertaking a thorough review of its internal controls
as part of the Company's  preparation for compliance with the requirements under
Section  404 of the  Sarbanes-Oxley  Act of 2002 and the  Company  is using this
review to further assist in identifying and correcting control deficiencies.  At
this time, the Company has not completed its review of the existing controls and
their  effectiveness.  Unless and until the material  weaknesses  and reportable
conditions described above, or any identified during this review, are completely
remedied, evaluated and tested, there can be no assurances that the Company will
be able to  assert  that  its  internal  control  over  financial  reporting  is
effective,  pursuant to the rules  adopted by the SEC under  Section  404,  when
those rules take effect.

                                       26

**PART II - OTHER INFORMATION****Item 1 - Legal Proceedings**

          Not applicable

**Item 2 - Unregistered Sale of Equity Securities and Use of Proceeds**

          Not applicable

**Item 3 - Defaults upon Senior Securities**

          Not applicable

**Item 4 - Submission of Matters to a Vote of Security-Holders**

          Not applicable

**Item 5 - Other Information**

          Not applicable

**Item 6 - Exhibits**

          The exhibits  required to be filed  pursuant to Item 601 of Regulation
          S-K are listed in the  Exhibit  Index  that  immediately  follows  the
          signature page of this report.

                                       27

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                       COLLINS INDUSTRIES, INC.
Dated:  September 14, 2005

                                       By: /s/ Cletus C. Glasener
                                          --------------------------------------
                                           Cletus C. Glasener, Vice President of
                                           Finance and Chief Financial Officer
                                           (Signing on behalf of the registrant
                                           and as principal accounting officer)

                                       28

**EXHIBIT INDEX**ItemDescription

31.1           Rule  13a-14(a)/15d-14(a)  Certification  of President  and Chief
               Executive Officer (Principal Executive Officer).

31.2           Rule  13a-14(a)/15d-14(a)  Certification  of  Vice  President  of
               Finance and Chief  Financial  Officer  (Principal  Financial  and
               Accounting Officer).

32.1           Section  1350  Certification  of  President  and Chief  Executive
               Officer (Principal Executive Officer).

32.2           Section 1350 Certification of Vice President of Finance and Chief
               Financial Officer (Principal Financial and Accounting Officer).

                                       29
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