----

----

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**Form      10-Q**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**o TRANSITION      REPORT      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

|   |   | **COACHMEN                INDUSTRIES, INC.**                            |   |   |
|--------|--------|-------------------------------------------------------------------------|--------|--------|
|   |   | *(Exact                name of registrant as specified in its charter)* |   |   |

| **Indiana**                                               |   | **35-1101097**                                     |
|-----------------------------------------------------------|--------|----------------------------------------------------|
| *(State                of incorporation or organization*) |   | *(IRS                Employer Identification No.)* |

| **2831                Dexter Drive, Elkhart, Indiana**    |   | **46514**                   |
|-----------------------------------------------------------|--------|-----------------------------|
| *(Address                of principal executive offices)* |   | *(Zip                Code)* |

| Registrant's                telephone number, including area code |   | **(574)                262-0123** |
|-------------------------------------------------------------------|--------|-----------------------------------|

| Large                accelerated filer o |   | Accelerated                filer x |   | Non-accelerated                filer o |
|-----------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------------|

----

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| **FORM                10-Q**                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                               |   |
|                                                                                                                                               |   |
| **INDEX**                                                                                                                                          |
|                                                                                                                                               |   |
| **Part I.                Financial Information**                                                                                              | **Page** |
|                                                                                                                                               |   |
| Financial                Statements:                                                                                                               |   |
| Consolidated                Balance Sheets at September 30, 2007 and                December 31, 2006                                              | 3 |
|                                                                                                                                               |   |
| Consolidated                Statements of Operations for                the three and nine months ended September 30, 2007 and                2006 | 4 |
|                                                                                                                                               |   |
| Consolidated                Statements of Cash Flows for the                nine months ended September 30, 2007 and 2006                          | 5 |
|                                                                                                                                               |   |
| Notes                to Consolidated Financial                Statements                                                                           | 6-15 |
|                                                                                                                                               |   |
| Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                          | 16-25 |
|                                                                                                                                               |   |
| Quantitative                and Qualitative Disclosures About Market                Risk                                                           | 26 |
|                                                                                                                                               |   |
| Controls                and Procedures                                                                                                             | 26 |
|                                                                                                                                               |   |
| **Part                II. Other Information**                                                                                                      |   |
|                                                                                                                                               |   |
| Item                6. Exhibits                                                                                                                    | 27 |
|                                                                                                                                               |   |
| Signatures                                                                                                                                         | 28 |
|                                                                                                                                               |   |
| Index                to Exhibits                                                                                                                   | 29 |

----

*Index*

**Coachmen      Industries, Inc. and      Subsidiaries**

**Consolidated      Balance Sheets**

|                                                                                                                                                                                                                |   | September                30, |    |    | December                31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|---------|-----------------------------|--------|
|                                                                                                                                                                                                                |   | 2007                         |    |    | 2006                        |   |
| **Assets**                                                                                                                                                                                                          |   | (Unaudited)                  |    |    |                        |   |
| CURRENT                ASSETS                                                                                                                                                                                       |   |                         |    |    |                        |   |
| Cash                  and cash equivalents                                                                                                                                                                          |   | $                            | 3,109   |    |                        | $      | 2,651 |   |
| Trade                receivables, less allowance for doubtful receivables 2007 - $833                and 2006                - $1,134                                                                               |   |                         | 24,133  |    |                        |   | 25,874 |   |
| Other                  receivables                                                                                                                                                                                  |   |                         | 3,309   |    |                        |   | 2,332 |   |
| Refundable                income taxes                                                                                                                                                                              |   |                         | 2,912   |    |                        |   | 10,820 |   |
| Inventories                                                                                                                                                                                                         |   |                         | 70,441  |    |                        |   | 83,511 |   |
| Prepaid                expenses and other                                                                                                                                                                           |   |                         | 4,013   |    |                        |   | 3,957 |   |
| Assets                  held for sale                                                                                                                                                                               |   |                         | -       |    |                        |   | 288 |   |
| Total                current assets                                                                                                                                                                                 |   |                         | 107,917 |    |                        |   | 129,433 |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| Property,                plant and equipment**,** net                                                                                                                                                               |   |                         | 54,263  |    |                        |   | 57,018 |   |
| Goodwill                                                                                                                                                                                                            |   |                         | 12,993  |    |                        |   | 16,865 |   |
| Cash                value of life insurance, net of loans                                                                                                                                                           |   |                         | 34,123  |    |                        |   | 31,119 |   |
| Other                                                                                                                                                                                                               |   |                         | 8,460   |    |                        |   | 8,699 |   |
| TOTAL                ASSETS                                                                                                                                                                                         |   | $                            | 217,756 |    |                        | $      | 243,134 |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| **Liabilities                and Shareholders' Equity**                                                                                                                                                             |   |                         |    |    |                        |   |   |   |
| CURRENT                  LIABILITIES                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| Short-term                borrowings                                                                                                                                                                                |   | $                            | 7,427   |    |                        | $      | 9,284 |   |
| Accounts                  payable, trade                                                                                                                                                                            |   |                         | 26,176  |    |                        |   | 16,998 |   |
| Accrued                income taxes                                                                                                                                                                                 |   |                         | 15      |    |                        |   | 18 |   |
| Accrued                  expenses and other liabilities                                                                                                                                                             |   |                         | 30,213  |    |                        |   | 35,116 |   |
| Floorplan                notes payable                                                                                                                                                                              |   |                         | 3,774   |    |                        |   | 4,156 |   |
| Current                  maturities of long-term debt                                                                                                                                                               |   |                         | 917     |    |                        |   | 1,077 |   |
| Total                current liabilities                                                                                                                                                                            |   |                         | 68,522  |    |                        |   | 66,649 |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| Long-term                debt                                                                                                                                                                                       |   |                         | 3,627   |    |                        |   | 3,862 |   |
| Deferred                  income taxes                                                                                                                                                                              |   |                         | 2,865   |    |                        |   | 4,524 |   |
| Postretirement                deferred compensation benefits                                                                                                                                                        |   |                         | 7,815   |    |                        |   | 7,768 |   |
| Other                                                                                                                                                                                                               |   |                         | 26      |    |                        |   | - |   |
| Total                liabilities                                                                                                                                                                                    |   |                         | 82,855  |    |                        |   | 82,803 |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| COMMITMENTS                AND CONTINGENCIES** **(Note                10)                                                                                                                                      |   |                         |    |    |                        |   |   |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| SHAREHOLDERS'                EQUITY                                                                                                                                                                                 |   |                         |    |    |                        |   |   |   |
|         Common                  shares, without par value: authorized 60,000 shares; issued 2007                  - 21,172                  shares and 2006 - 21,156 shares |   |                         | 92,512  |    |                        |   | 92,382 |   |
| Additional                paid-in capital                                                                                                                                                                           |   |                         | 7,795   |    |                        |   | 7,648 |   |
| Accumulated                  other comprehensive loss                                                                                                                                                               |   |                         | (16     | )  |                        |   | (10 | ) |
| Retained                earnings                                                                                                                                                                                    |   |                         | 93,764  |    |                        |   | 119,623 |   |
| Treasury                  shares, at cost, 2007 - 5,402 shares and 2006 - 5,433                  shares                                                                                                             |   |                         | (59,154 | )       |                        |   | (59,312 | ) |
| Total                shareholders' equity                                                                                                                                                                           |   |                         | 134,901 |    |                        |   | 160,331 |   |
|                                                                                                                                                                                                                |   |                         |    |    |                        |   |   |   |
| TOTAL                LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                           |   | $                            | 217,756 |    |                        | $      | 243,134 |   |

*See      Notes to Consolidated Financial      Statements.*

----

*Index*

**Coachmen      Industries, Inc. and      Subsidiaries**

**Consolidated      Statements of Operations**

|                                                                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|---------|--------|---------------------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                                                                                    |   | Three                Months Ended September                30, |    |   | Nine                Months Ended September                30, |   |
|                                                                                                                                                                                                    |   | 2007                                                           |    |   | 2006                                                          |   |    | 2007   |   |   | 2006    |   |
| Net                  sales                                                                                                                                                                              |   | $                                                              | 123,854 |   |                                                          | $      | 130,715 |   |   | $      | 403,861 |   |   | $ | 448,590 |   |
| Cost                of sales                                                                                                                                                                            |   |                                                           | 116,096 |   |                                                          |   | 124,734 |   |   |   | 388,682 |   |   |   | 428,126 |   |
|                          Gross profit                                                                                                                                |   |                                                           | 7,758   |   |                                                          |   | 5,981   |   |   |   | 15,179  |   |   |   | 20,464 |   |
| Operating                expenses:                                                                                                                                                                 |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
| Selling                                                                                                                                                                                                 |   |                                                           | 5,720   |   |                                                          |   | 6,520   |   |   |   | 17,472  |   |   |   | 16,946 |   |
| General                and administrative                                                                                                                                                               |   |                                                           | 6,410   |   |                                                          |   | 6,226   |   |   |   | 19,621  |   |   |   | 14,403 |   |
| Gain                  on sale of assets, net                                                                                                                                                            |   |                                                           | (143    | )      |                                                          |   | (291    | )      |   |   | (610    | )      |   |   | (6,340 | ) |
| Goodwill                impairment charge                                                                                                                                                               |   |                                                           | -       |   |                                                          |   | -       |   |   |   | 3,872   |   |   |   | - |   |
|                                                                                                                                                                                                    |   |                                                           | 11,987  |   |                                                          |   | 12,455  |   |   |   | 40,355  |   |   |   | 25,009 |   |
|                        Operating loss                                                                                                                                |   |                                                           | (4,229  | )      |                                                          |   | (6,474  | )      |   |   | (25,176 | )      |   |   | (4,545 | ) |
| Nonoperating                  (income) expense:                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
|                        Interest expense                                                                                                                              |   |                                                           | 808     |   |                                                          |   | 916     |   |   |   | 2,595   |   |   |   | 2,616 |   |
|                          Investment income                                                                                                                           |   |                                                           | (423    | )      |                                                          |   | (340    | )      |   |   | (1,376  | )      |   |   | (1,165 | ) |
|                        Other income, net                                                                                                                             |   |                                                           | (271    | )      |                                                          |   | (654    | )      |   |   | (486    | )      |   |   | (897 | ) |
|                                                                                                                                                                                                    |   |                                                           | 114     |   |                                                          |   | (78     | )      |   |   | 733     |   |   |   | 554 |   |
|                        Loss from continuing operations before income taxes                                                                                           |   |                                                           | (4,343  | )      |                                                          |   | (6,396  | )      |   |   | (25,909 | )      |   |   | (5,099 | ) |
| Income                  taxes (credit)                                                                                                                                                             |   |                                                           | 1       |   |                                                          |   | (3,663  | )      |   |   | (994    | )      |   |   | (3,249 | ) |
| Net                loss from continuing operations                                                                                                                                            |   |                                                           | (4,344  | )      |                                                          |   | (2,733  | )      |   |   | (24,915 | )      |   |   | (1,850 | ) |
|                                                                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
| Discontinued                operations                                                                                                                                                             |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
|                          Loss from operations of discontinued entities (net of tax credits                  of                  $(100) and $(423) in 2006) |   |                                                           | -       |   |                                                          |   | (152    | )      |   |   | -       |   |   |   | (657 | ) |
|                        Gain (loss) on sale of assets of discontinued entities (net of taxes                of                ($631) and $2,140 in 2006)              |   |                                                           | -       |   |                                                          |   | (631    | )      |   |   | -       |   |   |   | 2,205 |   |
| Income                  (loss) from discontinued operations                                                                                                                                             |   |                                                           | -       |   |                                                          |   | (783    | )      |   |   | -       |   |   |   | 1,548 |   |
|                               Net loss                                                                                            |   | $                                                              | (4,344  | )      |                                                          | $      | (3,516  | )      |   | $      | (24,915 | )      |   | $ | (302 | ) |
|                                                                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
| Earnings (loss)                per share - Basic                                                                                                                                              |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
|                          Continuing operations                                                                                                                       |   | $                                                              | (.28    | )      |                                                          | $      | (.17    | )      |   | $      | (1.58   | )      |   | $ | (.12 | ) |
|                        Discontinued operations                                                                                                                       |   |                                                           | -       |   |                                                          |   | (.05    | )      |   |   | -       |   |   |   | .10 |   |
|                                 Net loss per share                                                                                |   |                                                           | (.28    | )      |                                                          |   | (.22    | )      |   |   | (1.58   | )      |   |   | (.02 | ) |
| Earnings                (loss) per share - Diluted                                                                                                                                                 |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
|                          Continuing operations                                                                                                                       |   |                                                           | (.28    | )      |                                                          |   | (.17    | )      |   |   | (1.58   | )      |   |   | (.12 | ) |
|                        Discontinued operations                                                                                                                       |   |                                                           | -       |   |                                                          |   | (.05    | )      |   |   | -       |   |   |   | .10 |   |
|                                 Net loss per share                                                                                |   |                                                           | (.28    | )      |                                                          |   | (.22    | )      |   |   | (1.58   | )      |   |   | (.02 | ) |
|                                                                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
| Number                  of common shares used in the computation of earnings (loss) per                  share:                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
|                        Basic                                                                                                                                         |   |                                                           | 15,736  |   |                                                          |   | 15,634  |   |   |   | 15,725  |   |   |   | 15,664 |   |
|                          Diluted                                                                                                                                     |   |                                                           | 15,736  |   |                                                          |   | 15,634  |   |   |   | 15,725  |   |   |   | 15,664 |   |
|                                                                                                                                                                                                    |   |                                                           |    |   |                                                          |   |    |   |   |   |    |   |   |   |   |   |
| Cash                  dividends declared per common share                                                                                                                                          |   | $                                                              | -       |   |                                                          | $      | .03     |   |   | $      | .06     |   |   | $ | .15 |   |

*See      *
*Notes to Consolidated Financial      Statements*
*.*

----

*Index*

**Coachmen      Industries, Inc. and      Subsidiaries**

**Consolidated      Statements of Cash Flows**

|                                                                                                                                                                                                                                                                           |   | Nine                Months Ended September 30, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                           |   | 2007                                           |    |   | 2006 |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                                                                                           |   |                                           |    |   |   |   |
| Net                  loss                                                                                                                                                                                                                                                      |   | $                                              | (24,915 | ) |   | $ | (302 | ) |
|                           Adjustments to reconcile net loss to net cash provided by operating                activities:                                                                                                     |   |                                           |    |   |   |   |   |   |
| Depreciation                                                                                                                                                                                                                                                                   |   |                                           | 4,389   |   |   |   | 4,869 |   |
| Provision                for doubtful receivables, net of recoveries                                                                                                                                                                                                           |   |                                           | 474     |   |   |   | 444 |   |
| Net                  realized and unrealized losses on derivatives                                                                                                                                                                                                             |   |                                           | (6      | ) |   |   | (4 | ) |
| Goodwill                impairment charge                                                                                                                                                                                                                                      |   |                                           | 3,872   |   |   |   | - |   |
| Gains                  on sale of properties and other assets, net                                                                                                                                                                                                             |   |                                           | (610    | ) |   |   | (10,830 | ) |
| Increase                in cash surrender value of life insurance policies                                                                                                                                                                                                     |   |                                           | (1,495  | ) |   |   | (437 | ) |
| Deferred                  income tax provision (benefit)                                                                                                                                                                                                                       |   |                                           | (1,659  | ) |   |   | 1,641 |   |
| Other                                                                                                                                                                                                                                                                          |   |                                           | 1,199   |   |   |   | 234 |   |
| Changes                  in certain assets and liabilities, net of effects of acquisitions                  and                  dispositions:                                                                                                                                 |   |                                           |    |   |   |   |   |   |
| Trade                receivables                                                                                                                                                                                                                                               |   |                                           | 74      |   |   |   | 21,489 |   |
| Inventories                                                                                                                                                                                                                                                                    |   |                                           | 13,070  |   |   |   | 5,527 |   |
| Prepaid                expenses and other                                                                                                                                                                                                                                      |   |                                           | (56     | ) |   |   | (1,944 | ) |
| Accounts                  payable, trade                                                                                                                                                                                                                                       |   |                                           | 9,178   |   |   |   | (4,502 | ) |
| Income                taxes - accrued and refundable                                                                                                                                                                                                                           |   |                                           | 7,905   |   |   |   | (2,755 | ) |
| Accrued                  expenses and other liabilities                                                                                                                                                                                                                        |   |                                           | (5,709  | ) |   |   | (11,735 | ) |
|                    Net cash provided by operating activities                                                                                                                                                                                                    |   |                                           | 5,711   |   |   |   | 1,695 |   |
|                                                                                                                                                                                                                                                                           |   |                                           |    |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                                                                                                                                                                                           |   |                                           |    |   |   |   |   |   |
| Proceeds                  from sale of properties and other assets                                                                                                                                                                                                             |   |                                           | 1,499   |   |   |   | 24,680 |   |
| Investments                in life insurance policies                                                                                                                                                                                                                          |   |                                           | (1,509  | ) |   |   | (1,334 | ) |
| Purchases                  of property and equipment                                                                                                                                                                                                                           |   |                                           | (2,246  | ) |   |   | (4,139 | ) |
| Other                                                                                                                                                                                                                                                                          |   |                                           | 466     |   |   |   | (276 | ) |
| Net                  cash provided by (used in) investing activities                                                                                                                                                                                                           |   |                                           | (1,790  | ) |   |   | 18,931 |   |
|                                                                                                                                                                                                                                                                           |   |                                           |    |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                                                                                                                                                                         |   |                                           |    |   |   |   |   |   |
| Proceeds                from short-term borrowings                                                                                                                                                                                                                             |   |                                           | 10,659  |   |   |   | 7,070 |   |
| Payments                  of short-term borrowings                                                                                                                                                                                                                             |   |                                           | (12,898 | ) |   |   | (8,620 | ) |
| Proceeds                from long-term debt                                                                                                                                                                                                                                    |   |                                           | -       |   |   |   | 255 |   |
| Payments                  of long-term debt                                                                                                                                                                                                                                    |   |                                           | (395    | ) |   |   | (8,570 | ) |
| Issuance                of common shares under stock incentive plans                                                                                                                                                                                                           |   |                                           | 130     |   |   |   | 192 |   |
| Cash                  dividends paid                                                                                                                                                                                                                                           |   |                                           | (944    | ) |   |   | (1,876 | ) |
| Purchases                of common shares for treasury                                                                                                                                                                                                                         |   |                                           | (15     | ) |   |   | (129 | ) |
|                                                      Net cash used in financing activities |   |                                           | (3,463  | ) |   |   | (11,678 | ) |
| Increase                in cash and cash equivalents                                                                                                                                                                                                                           |   |                                           | 458     |   |   |   | 8,948 |   |
|                                                                                                                                                                                                                                                                           |   |                                           |    |   |   |   |   |   |
| CASH                AND CASH EQUIVALENTS:                                                                                                                                                                                                                                      |   |                                           |    |   |   |   |   |   |
| Beginning                  of period                                                                                                                                                                                                                                           |   |                                           | 2,651   |   |   |   | 2,780 |   |
| End                of period                                                                                                                                                                                                                                                   |   | $                                              | 3,109   |   |   | $ | 11,728 |   |
|                                                                                                                                                                                                                                                                           |   |                                           |    |   |   |   |   |   |
| Supplemental                disclosures of cash flow information:                                                                                                                                                                                                         |   |                                           |    |   |   |   |   |   |
|                          Operating cash received during the period related to insurance                  settlement                                                                                                                         |   | $                                              | -       |   |   | $ | 2,875 |   |

*See      Notes to Consolidated Financial      Statements.*

----

*Index*

**Coachmen      Industries, Inc. and Subsidiaries**

**Notes      to Consolidated Financial Statements**

**1.         BASIS OF PRESENTATION.**

**Statement      of Operations Classification - **
*Accounting Changes and      Error Corrections*

**Reclassifications      - **

**2.   SEGMENT      INFORMATION.**

Note      9

|                                   |   | Three                Months Ended September                30, |    |   | Nine                Months Ended September                30, |   |
|----------------------------------------|--------|----------------------------------------------------------------|---------|--------|---------------------------------------------------------------|--------|
|                                   |   | 2007                                                           |    |   | 2006                                                          |   |   | 2007 |   |   | 2006 |   |
| Net                sales               |   |                                                           |    |   |                                                          |   |   |   |   |   |   |   |
| Recreational                  vehicles |   | $                                                              | 91,778  |   |                                                          | $      | 90,490 |   |   | $ | 307,158 |   |   | $ | 321,454 |   |
| Housing                                |   |                                                           | 32,076  |   |                                                          |   | 40,225 |   |   |   | 96,703 |   |   |   | 127,136 |   |
|                                   |   |                                                           |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total      |   | $                                                              | 123,854 |   |                                                          | $      | 130,715 |   |   | $ | 403,861 |   |   | $ | 448,590 |   |
|                                   |   |                                                           |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

**2.         SEGMENT INFORMATION, continued.**

|                                                              |                                                           |
|-------------------------------------------------------------------|----------------------------------------------------------------|
|                                                              | Three                Months Ended September                30, |   | Nine                Months Ended September                30, |   |
|                                                              | 2007                                                           |   | 2006 |   | 2007 |   | 2006 |   |
| Gross                profit                                       |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                  vehicles                            |                                                           | $ | 3,501 |   |   | $ | 557 |   |   | $ | 2,566 |   |   | $ | 3,141 |   |
| Housing                                                           |                                                           |   | 4,257 |   |   |   | 5,424 |   |   |   | 12,613 |   |   |   | 17,322 |   |
| Other                  reconciling items                          |                                                           |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                  total                               |                                                           | $ | 7,758 |   |   | $ | 5,981 |   |   | $ | 15,179 |   |   | $ | 20,464 |   |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                               |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                              |                                                           | $ | 7,758 |   |   | $ | 7,833 |   |   | $ | 27,011 |   |   | $ | 18,091 |   |
| Housing                                                           |                                                           |   | 4,907 |   |   |   | 5,079 |   |   |   | 14,944 |   |   |   | 14,378 |   |
| Other                reconciling items                            |                                                           |   | (678 | ) |   |   | (457 | ) |   |   | (1,600 | ) |   |   | (7,460 | ) |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                                 |                                                           | $ | 11,987 |   |   | $ | 12,455 |   |   | $ | 40,355 |   |   | $ | 25,009 |   |
|                                                              |                                                           |   |   |   |   |   |   |   |
| Operating                income (loss)                            |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                  vehicles                            |                                                           | $ | (4,257 | ) |   | $ | (7,276 | ) |   | $ | (24,445 | ) |   | $ | (14,950 | ) |
| Housing                                                           |                                                           |   | (650 | ) |   |   | 345 |   |   |   | (2,331 | ) |   |   | 2,944 |   |
| Other                  reconciling items                          |                                                           |   | 678 |   |   |   | 457 |   |   |   | 1,600 |   |   |   | 7,461 |   |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                  total                               |                                                           | $ | (4,229 | ) |   | $ | (6,474 | ) |   | $ | (25,176 | ) |   | $ | (4,545 | ) |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax                  income (loss) from continuing operations |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                              |                                                           | $ | (4,156 | ) |   | $ | (7,003 | ) |   | $ | (24,471 | ) |   | $ | (15,028 | ) |
| Housing                                                           |                                                           |   | (690 | ) |   |   | 255 |   |   |   | (2,271 | ) |   |   | 2,843 |   |
| Other                reconciling items                            |                                                           |   | 503 |   |   |   | 352 |   |   |   | 833 |   |   |   | 7,086 |   |
|                                                              |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                                 |                                                           | $ | (4,343 | ) |   | $ | (6,396 | ) |   | $ | (25,909 | ) |   | $ | (5,099 | ) |

|                                                                                                                                                                                                                                            |   | September                30, |    |   | December                31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|-----------------------------|--------|
|                                                                                                                                                                                                                                            |   | 2007                         |    |   | 2006                        |   |
| Total                assets                                                                                                                                                                                                                     |   |                         |    |   |                        |   |
| Recreational                  vehicles                                                                                                                                                                                                          |   | $                            | 94,188  |   |                        | $      | 113,627 |   |
| Housing                                                                                                                                                                                                                                         |   |                         | 55,864  |   |                        |   | 57,968 |   |
| Other                  reconciling items                                                                                                                                                                                                        |   |                         | 67,704  |   |                        |   | 71,539 |   |
|                                                                                                                                                                                                                                            |   |                         |    |   |                        |   |   |   |
| Total                                        |   | $                            | 217,756 |   |                        | $      | 243,134 |   |

----

*Index*

**3.         INVENTORIES.**

|                                                                                    |   | September                30, |   |   | December                31, |   |
|-----------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|-----------------------------|--------|
|                                                                                    |   | 2007                         |   |   | 2006                        |   |
|  Raw                materials                                                      |   |                         |   |   |                        |   |
|  Recreational                  vehicles                                            |   | $                            | 14,118 |   |                        | $      | 13,874 |   |
|  Housing                                                                           |   |                         | 5,382  |   |                        |   | 6,065 |   |
|  Total                                                                             |   |                         | 19,500 |   |                        |   | 19,939 |   |
|                                                                                    |   |                         |   |   |                        |   |   |   |
| Work                  in process                                                        |   |                         |   |   |                        |   |   |   |
|  Recreational                vehicles                                              |   |                         | 14,415 |   |                        |   | 15,661 |   |
|                           Housing               |   |                         | 4,120  |   |                        |   | 3,466 |   |
|          Total                             |   |                         | 18,535 |   |                        |   | 19,127 |   |
|                                                                                    |   |                         |   |   |                        |   |   |   |
|                         Improved lots           |   |                         |   |   |                        |   |   |   |
|                           Housing               |   |                         | 204    |   |                        |   | 221 |   |
|          Total                             |   |                         | 204    |   |                        |   | 221 |   |
|                                                                                    |   |                         |   |   |                        |   |   |   |
|                         Finished goods          |   |                         |   |   |                        |   |   |   |
|                           Recreational vehicles |   |                         | 24,106 |   |                        |   | 35,079 |   |
|                         Housing                 |   |                         | 8,096  |   |                        |   | 9,145 |   |
|                           Total                 |   |                         | 32,202 |   |                        |   | 44,224 |   |
|                                                                                    |   |                         |   |   |                        |   |   |   |
| Total                                                                                   |   | $                            | 70,441 |   |                        | $      | 83,511 |   |

**4.         PROPERTY, PLANT AND EQUIPMENT.**

|                                              |   | September                30,2007 |    |   | December                31,2006 |   |
|---------------------------------------------------|--------|----------------------------------|---------|--------|---------------------------------|--------|
|                                              |   |                             |    |   |                            |   |
| Land                  and improvements            |   | $                                | 11,651  |   |                            | $      | 11,562 |   |
| Buildings                and improvements         |   |                             | 60,879  |   |                            |   | 61,043 |   |
| Machinery                  and equipment          |   |                             | 25,061  |   |                            |   | 24,798 |   |
| Transportation                equipment           |   |                             | 14,524  |   |                            |   | 14,310 |   |
| Office                  furniture and fixtures    |   |                             | 17,268  |   |                            |   | 17,481 |   |
|                                              |   |                             |    |   |                            |   |   |   |
| Total                                             |   |                             | 129,383 |   |                            |   | 129,194 |   |
| Less,                accumulated depreciation     |   |                             | 75,120  |   |                            |   | 72,176 |   |
|                                              |   |                             |    |   |                            |   |   |   |
| Property,                plant and equipment, net |   | $                                | 54,263  |   |                            | $      | 57,018 |   |

----

*Index*

**5.         ACCRUED EXPENSES AND OTHER LIABILITIES.**

|                                                                                                                                                 |   | September                30,2007 |   |   | December                31,2006 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
|                                                                                                                                                 |   |                             |   |   |                            |   |
| Wages,                  salaries, bonuses and commissions                                                                                            |   | $                                | 3,620  |   |                            | $      | 3,135 |   |
| Dealer                incentives, including volume bonuses, dealer trips, interest                reimbursement, co-op advertising and other rebates |   |                             | 1,367  |   |                            |   | 4,140 |   |
| Warranty                                                                                                                                             |   |                             | 9,537  |   |                            |   | 11,099 |   |
| Insurance-products                and general liability, workers compensation, group health and                other                                 |   |                             | 7,437  |   |                            |   | 7,593 |   |
| Customer                  deposits and unearned revenues                                                                                             |   |                             | 3,570  |   |                            |   | 3,865 |   |
| Litigation                                                                                                                                           |   |                             | 625    |   |                            |   | 345 |   |
| Interest                                                                                                                                             |   |                             | 714    |   |                            |   | 955 |   |
| Sales                and property taxes                                                                                                              |   |                             | 1,626  |   |                            |   | 1,226 |   |
| Other                  current liabilities                                                                                                           |   |                             | 1,717  |   |                            |   | 2,758 |   |
|                                                                                                                                                 |   |                             |   |   |                            |   |   |   |
| Total                                                                                                                                                |   | $                                | 30,213 |   |                            | $      | 35,116 |   |

|                                                                                                                       |   | Three                Months Ended September                30, |   |   | Nine                Months Ended September                30, |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                                                                                                                       |   | 2007                                                           |   |   | 2006                                                          |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                       |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |
| Balance                  of accrued warranty at beginning of period                                                        |   | $                                                              | 9,766  |   |                                                          | $      | 13,359 |   |   | $ | 11,099 |   |   | $ | 20,005 |   |
|                                                                                                                       |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Warranties                  issued during the period and changes in liability for pre-existing                  warranties |   |                                                           | 4,074  |   |                                                          |   | 4,411 |   |   |   | 14,184 |   |   |   | 15,576 |   |
|                                                                                                                       |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Settlements                  made during the period                                                                        |   |                                                           | (4,303 | )      |                                                          |   | (6,251 | ) |   |   | (15,746 | ) |   |   | (24,062 | ) |
|                                                                                                                       |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  of accrued warranty at September 30                                                               |   | $                                                              | 9,537  |   |                                                          | $      | 11,519 |   |   | $ | 9,537 |   |   | $ | 11,519 |   |

----

*Index*

**6.         COMPREHENSIVE LOSS.**

|                                                                    |   | Three                Months Ended September                30, |   |   | Nine                Months Ended September                30, |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                                                                    |   | 2007                                                           |   |   | 2006                                                          |   |   | 2007 |   |   | 2006 |   |
|                                                                    |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |
| Net                  loss                                               |   | $                                                              | (4,344 | )      |                                                          | $      | (3,516 | ) |   | $ | (24,915 | ) |   | $ | (302 | ) |
| Unrealized losses                on cash flow hedges, net of taxes |   |                                                           | (16    | )      |                                                          |   | (28 | ) |   |   | (6 | ) |   |   | (4 | ) |
|                                                                    |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                loss                                       |   | $                                                              | (4,360 | )      |                                                          | $      | (3,544 | ) |   | $ | (24,921 | ) |   | $ | (306 | ) |

**7.         EARNINGS PER SHARE AND COMMON STOCK MATTERS.**

|                                                                         |   | Three                Months Ended September                30, |   |   | Nine                Months Ended September                30, |   |
|------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                                                                         |   | 2007                                                           |   |   | 2006                                                          |   |   | 2007 |   |   | 2006 |   |
| Numerator:                                                                   |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |
| Net                  loss available to common stockholders                   |   | $                                                              | (4,344 | )      |                                                          | $      | (3,516 | ) |   | $ | (24,915 | ) |   | $ | (302 | ) |
| Denominator:                                                                 |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Number                  of shares outstanding, end of period:                |   |                                                           |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of common shares used in basic EPS    |   |                                                           | 15,736 |   |                                                          |   | 15,634 |   |   |   | 15,725 |   |   |   | 15,664 |   |
| Effect                  of dilutive securities                               |   |                                                           | -      |   |                                                          |   | - |   |   |   | - |   |   |   | - |   |
| Weighted                average number of common shares used in dilutive EPS |   |                                                           | 15,736 |   |                                                          |   | 15,634 |   |   |   | 15,725 |   |   |   | 15,664 |   |

**Share      Repurchase Programs**

----

*Index*

**8.         INCOME TAXES.**

*Accounting for Uncertainty in Income Taxes*

**9.**  **RESTRUCTURING      CHARGES AND      DISCONTINUED OPERATIONS.**

----

*Index*

**9.**
**RESTRUCTURING      CHARGES AND DISCONTINUED OPERATIONS, continued.**

**Housing      Segment**

**Recreational      Vehicle Segment**

**10. COMMITMENTS      AND CONTINGENCIES.**

**Obligation      to Purchase Consigned Inventories**

----

*Index*

**10.**
**COMMITMENTS      AND CONTINGENCIES, continued.**

**Repurchase      Agreements**

**Corporate      Guarantees**

----

*Index*

**10.  COMMITMENTS      AND CONTINGENCIES, continued.**

**Financing      Obligation**

**Litigation**

**11.       STOCK-BASED COMPENSATION.**

*Share-Based Payment*

----

*Index*

**12.  GOODWILL      AND INTANGIBLE ASSETS.**

*Goodwill and Other Intangible Assets,*

----

*Index*

**Coachmen      Industries, Inc. and Subsidiaries**

**Management’s      Discussion and Analysis of**

**Financial      Condition and Results of Operations**

|                                                                            |   | Three                Months Ended |    |   | Percentage                Change |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------|---------|--------|----------------------------------|--------|
|                                                                            |   |                              |    |   | Percentage                       |   |   |   |   |   | Percentage |   |   | 2007 |   |
|                                                                            |   | September                30,      |    |   | of                               |   |   | September                30, |   |   | of |   |   | to |   |
|                                                                            |   | 2007                              |    |   | Net                Sales         |   |   | 2006 |   |   | Net                Sales |   |   | 2006 |   |
| Net                  sales:                                                |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |
|   Recreational                vehicles                                |   | $                                 | 91,778  |   |                             |   | 74.1 | % |   | $ | 90,490 |   |   |   | 69.2 | % |   |   | 1.4 | % |
|   Housing                                                             |   |                              | 32,076  |   |                             |   | 25.9 |   |   |   | 40,225 |   |   |   | 30.8 |   |   |   | (20.3 | ) |
| Consolidated                total                                               |   |                              | 123,854 |   |                             |   | 100.0 |   |   |   | 130,715 |   |   |   | 100.0 |   |   |   | (5.2 | ) |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                profit:                                               |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                              |   |                              | 3,501   |   |                             |   | 2.8 |   |   |   | 557 |   |   |   | 0.4 |   |   |   | 528.5 |   |
|   Housing                                                             |   |                              | 4,257   |   |                             |   | 3.4 |   |   |   | 5,424 |   |   |   | 4.2 |   |   |   | (21.5 | ) |
| Consolidated                  total                                             |   |                              | 7,758   |   |                             |   | 6.2 |   |   |   | 5,981 |   |   |   | 4.6 |   |   |   | 29.7 |   |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses:                                       |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Selling                                                        |   |                              | 5,720   |   |                             |   | 4.6 |   |   |   | 6,520 |   |   |   | 4.9 |   |   |   | (12.3 | )  |
|   General                  and administrative                    |   |                              | 6,410   |   |                             |   | 5.2 |   |   |   | 6,226 |   |   |   | 4.8 |   |   |   | 3.0 |   |
|   Gain                on sale of assets, net                     |   |                              | (143    | )      |                             |   | (0.1 | )  |   |   | (291 | ) |   |   | (0.2 | ) |   |   | (50.9 | ) |
|   Goodwill                  impairment charge                         |   |                              | -       |   |                             |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consolidated                total                                               |   |                              | 11,987  |   |                             |   | 9.7 |   |   |   | 12,455 |   |   |   | 9.5 |   |   |   | (3.8 | )  |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating                expense                                        |   |                              | 114     |   |                             |   | - |   |   |   | (78 | ) |   |   | - |   |   |   | n/m |   |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations before income taxes         |   |                              | (4,343  | )      |                             |   | (3.5 | ) |   |   | (6,396 | ) |   |   | (4.9 | )  |   |   | 32.1 |   |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                taxes (credit)                                       |   |                              | 1       |   |                             |   | - |   |   |   | (3,663 | ) |   |   | (2.8 | )  |   |   | (100.0 | )  |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                             |   |                              | (4,344  | )      |                             |   | (3.5 | ) |   |   | (2,733 | ) |   |   | (2.1 | )  |   |   | (58.9 | )  |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued                operations:                                    |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loss                  from operations of discontinued entities, net |   |                              | -       |   |                             |   | - |   |   |   | (152 | ) |   |   | (0.1 | ) |   |   | 100.0 |   |
|   Loss                on sale of assets of discontinued entities, net |   |                              |  - |   |                             |   | - |   |   |   |  (631 | ) |   |   |  (0.5 | )  |   |   |  100.0 |   |
|   Loss                  from discontinued operations                  |   |                              | -       |   |                             |   | - |   |   |   | (783 | ) |   |   | (0.6 | ) |   |   | 100.0 |   |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                  |   | $                                 | (4,344  | )      |                             |   | (3.5 | )% |   | $ | (3,516 | ) |   |   | (2.7 | )% |   |   | (23.5 | )%  |
|                                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  n/m                  - not meaningful                                     |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

**  **

|                                                                         |   | Nine                Months Ended |    |   | Percentage                Change |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|----------------------------------|--------|
|                                                                              |   |                             |    |   | Percentage                       |   |   |   |   |   | Percentage |   |   | 2007 |   |
|                                                                              |   | September                30,     |    |   | of                               |   |   | September                30, |   |   | of |   |   | to |   |
|                                                                              |   | 2007                             |    |   | Net                Sales         |   |   | 2006 |   |   | Net                Sales |   |   | 2006 |   |
| Net                  sales:                                                  |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |
|   Recreational                vehicles                                  |   | $                                | 307,158 |   |                             |   | 76.1 | % |   | $ | 321,454 |   |   |   | 71.7 | % |   |   | (4.4 | )% |
|   Housing                                                               |   |                             | 96,703  |   |                             |   | 23.9 |   |   |   | 127,136 |   |   |   | 28.3 |   |   |   | (23.9 | ) |
| Consolidated                total                                                 |   |                             | 403,861 |   |                             |   | 100.0 |   |   |   | 448,590 |   |   |   | 100.0 |   |   |   | (10.0 | ) |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                profit:                                                 |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                                |   |                             | 2,566   |   |                             |   | 0.7 |   |   |   | 3,141 |   |   |   | 0.7 |   |   |   | (18.3 | ) |
|   Housing                                                               |   |                             | 12,613  |   |                             |   | 3.1 |   |   |   | 17,322 |   |   |   | 3.9 |   |   |   | (27.2 | ) |
|   Other                                                                 |   |                             | -       |   |                             |   | - |   |   |   | 1 |   |   |   | - |   |   |   | (100.0 | )  |
| Consolidated                total                                                 |   |                             | 15,179  |   |                             |   | 3.8 |   |   |   | 20,464 |   |   |   | 4.6 |   |   |   | (25.8 | ) |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses:                                           |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Selling                                                          |   |                             | 17,472  |   |                             |   | 4.3 |   |   |   | 16,946 |   |   |   | 3.8 |   |   |   | 3.1 |   |
|   General                and administrative                        |   |                             | 19,621  |   |                             |   | 4.9 |   |   |   | 14,403 |   |   |   | 3.2 |   |   |   | 36.2 |   |
|   Gain                  on sale of assets, net                     |   |                             | (610    | )      |                             |   | (0.2 | ) |   |   | (6,340 | ) |   |   | (1.4 | ) |   |   | (90.4 | ) |
|   Goodwill                impairment charge                             |   |                             | 3,872   |   |                             |   | 1.0 |   |   |   | - |   |   |   | - |   |   |   | 100.0 |   |
| Consolidated                  total                                               |   |                             | 40,355  |   |                             |   | 10.0 |   |   |   | 25,009 |   |   |   | 5.6 |   |   |   | 61.4 |   |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating                  expense                                        |   |                             | 733     |   |                             |   | 0.2 |   |   |   | 554 |   |   |   | 0.1 |   |   |   | 32.3 |   |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before income taxes         |   |                             | (25,909 | )      |                             |   | (6.4 | ) |   |   | (5,099 | ) |   |   | (1.1 | )  |   |   | (408.1 | )  |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax credit                                                |   |                             | (994    | )      |                             |   | (0.2 | ) |   |   | (3,249 | ) |   |   | (0.7 | )  |   |   | 69.4 |   |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss from continuing operations                         |   |                             | (24,915 | )      |                             |   | (6.2 | ) |   |   | (1,850 | ) |   |   | (0.4 | )  |   |   | n/m |   |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued                  operations:                                    |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loss                from operations of discontinued entities, net     |   |                             | -       |   |                             |   | - |   |   |   | (657 | ) |   |   | (0.2 | ) |   |   | 100.0 |   |
|   Gain                  on sale of assets of discontinued entities, net |   |                             | -       |   |                             |   | - |   |   |   | 2,205 |   |   |   | 0.5 |   |   |   | (100.0 | ) |
|   Income                from discontinued operations                    |   |                             |    |   |                             |   |   |   |   |   | 1,548 |   |   |   | 0.3 |   |   |   | (100.0 | ) |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                           |   | $                                | (24,915 | )      |                             |   | (6.2 | )% |   | $ | (302 | ) |   |   | (0.1 | )% |   |   | n/m | %  |
|                                                                              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  n/m                - not meaningful                                         |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                                  |   | Three                Months  |   |   | Three                Months  |   |   | Nine                Months   |   |   | Nine                Months   |   |
|-------------------------------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|--------|------------------------------|--------|--------|------------------------------|--------|
|                                                  |   | Ended                        |   |   | Ended                        |   |   | Ended                        |   |   | Ended                        |   |
|                                                  |   | September                30, |   |   | September                30, |   |   | September                30, |   |   | September                30, |   |
|                                                  |   | 2007                         |   |   | 2006                         |   |   | 2007                         |   |   | 2006                         |   |
|                                                  |   |                         |   |   |                         |   |   |                         |   |   |                         |   |
| (Gain)                loss on sale of assets:         |   |                         |   |   |                         |   |   |                         |   |   |                         |   |
| **Continuing                operations:**             |   |                         |   |   |                         |   |   |                         |   |   |                         |   |
| Texas                  property (Grapevine, TX)       |   | $                            | -      |   |                         | $      | 146    |                         |   | $      | -                            |   |   | $ | (1,678 | ) |
| Michigan                property (Edwardsburg, MI)    |   |                         | (75    | )      |                         |   | (122   | )                            |   |   | (380                         | )      |   |   | (597 | ) |
| Indiana                  property (various)           |   |                         | -      |   |                         |   | (72    | )                            |   |   | (122                         | )      |   |   | (870 | ) |
| Florida                property (Palm Shores, FL)     |   |                         | -      |   |                         |   | -      |                         |   |   | -                            |   |   |   | (1,180 | ) |
| Corporate                  aircraft                   |   |                         | -      |   |                         |   | -      |                         |   |   | -                            |   |   |   | (1,772 | ) |
| North                  Carolina property (various)    |   |                         | -      |   |                         |   | (57    | )                            |   |   | -                            |   |   |   | (57 | ) |
| Tennessee                  property (Springfield, TN) |   |                         | -      |   |                         |   | 37     |                         |   |   | -                            |   |   |   | 37 |   |
| Virginia                  property (Rocky Mount, VA)  |   |                         | (71    | )      |                         |   | (223   | )                            |   |   | (71                          | )      |   |   | (223 | ) |
| Miscellaneous                  assets                 |   |                         | 3      |   |                         |   | -      |                         |   |   | (37                          | )      |   |   | - |   |
| Total                                                 |   | $                            | (143   | )      |                         | $      | (291   | )                            |   | $      | (610                         | )      |   | $ | (6,340 | ) |
|                                                  |   |                         |   |   |                         |   |   |                         |   |   |                         |   |   |   |   |   |
| **Discontinued                operations**:           |   |                         |   |   |                         |   |   |                         |   |   |                         |   |   |   |   |   |
| Miller                                                |   | $                            | -      |   |                         | $      |   |                         |   | $      | -                            |   |   | $ | (2,522 | ) |
| Prodesign                                             |   |                         | -      |   |                         |   |   |                         |   |   | -                            |   |   |   | (1,899 | ) |
| All                  American Homes – Kansas    |   |                         | -      |   |                         |   |   |                         |   |   | -                            |   |   |   | 76 |   |
| Total                                                 |   |                         | -      |   |                         |   |   |                         |   |   | -                            |   |   |   | (4,345 | ) |
| Taxes                                                 |   |                         | -      |   |                         |   | (631   | )                            |   |   | -                            |   |   |   | 2,140 |   |
| Total,                net of taxes                    |   | $                            | -      |   |                         | $      | (631   | )                            |   | $      | -                            |   |   | $ | (2,205 | ) |
|                                                  |   |                         |   |   |                         |   |   |                         |   |   |                         |   |   |   |   |   |
| Legal                expense recoveries               |   | $                            | -      |   |                         | $      | -      |                         |   | $      | -                            |   |   | $ | (3,620 | ) |
|                                                  |   |                         |   |   |                         |   |   |                         |   |   |                         |   |   |   |   |   |
| Goodwill                impairment charge             |   | $                            | -      |   |                         | $      | -      |                         |   | $      | 3,872                        |   |   | $ | - |   |

----

*Index*

**NET      SALES**

**COST      OF SALES**

----

*Index*

*Accounting      Changes and Error Corrections*

**OPERATING      EXPENSES**

**GAIN      ON THE SALE OF ASSETS, NET**

----

*Index*

**GOODWILL      IMPAIRMENT CHARGE**

*Goodwill and Other Intangible Assets,*

**INTEREST      EXPENSE**

**INVESTMENT      INCOME**

**OTHER      INCOME, NET**

**PRE-TAX      LOSS**

Note 2

**INCOME      TAXES**

----

*Index*

*Accounting for Uncertainty in Income Taxes*

**DISCONTINUED      OPERATIONS**

----

*Index*

**NET      LOSS**

**LIQUIDITY,      CAPITAL RESOURCES AND FINANCIAL CONDITION**

**CRITICAL      ACCOUNTING POLICIES**

----

*Index*

**FORWARD-LOOKING      STATEMENTS**

| • | the                ability of the new management team to achieve desired                results;                                                                                                                                                                                                                                              |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | interest                rates, which affect the affordability of the Company's                products;                                                                                                                                                                                                                                       |
| • | consumer                confidence and the availability of credit;                                                                                                                                                                                                                                                                            |
| • | the                Company’s ability to utilize manufacturing resources                efficiently;                                                                                                                                                                                                                                     |
| • | the                Company’s ability to introduce new models that achieve consumer                acceptance;                                                                                                                                                                                                                           |
| • | the                margins associated with the mix of products the Company sells in                a                particular period;                                                                                                                                                                                                        |
| • | the                availability of floorplan financing for the Company's recreational                vehicle                dealers and corresponding availability of cash to the                Company;                                                                                                                                     |
| • | oil                supplies and the availability and price of gasoline and diesel fuel,                which                can impact the sale of recreational vehicles;                                                                                                                                                                     |
| • | the                Company's dependence on chassis and other suppliers;                                                                                                                                                                                                                                                                       |
| • | potential                liabilities under repurchase agreements and guarantees;                                                                                                                                                                                                                                                              |
| • | consolidation                of distribution channels in the recreational vehicle                industry;                                                                                                                                                                                                                                    |
| • | legislation                governing the relationships of the Company with its recreational                vehicle                dealers, which may affect the Company’s options and liabilities in the                event of a general economic downturn;                                                                           |
| • | the                price volatility of materials used in production and the ability                to pass                on rapidly increasing costs of product components and raw materials                to end                buyers;                                                                                                    |
| • | the                availability and cost of real estate for residential                housing;                                                                                                                                                                                                                                               |
| • | the                increased size and scope of work of military housing projects, and                other                major projects, as compared to the Company's traditional single-family                homes business, with increased reliance on third parties for performance                which could impact the Company;  |
| • | the                ability to perform in new market segments or geographic areas where                it has                limited experience;                                                                                                                                                                                               |
| • | the                impact of performance on the valuation of intangible                assets;                                                                                                                                                                                                                                                |
| • | the                supply of existing homes within the Company’s markets;                                                                                                                                                                                                                                                               |
| • | the                impact of home values on housing demand;                                                                                                                                                                                                                                                                                   |
| • | uncertainties                and timing with respect to sales resulting from recovery efforts                in the                Gulf Coast;                                                                                                                                                                                                |
| • | adverse                weather conditions affecting home deliveries;                                                                                                                                                                                                                                                                          |
| • | changing                government regulations, including those covering accounting                standards;                                                                                                                                                                                                                                 |
| • | environmental                matters or product warranties and recalls, which may affect costs                of                operations, revenues, product acceptance and                profitability;                                                                                                                                    |
| • | the                state of the recreational vehicle and housing industries in the United                States;                                                                                                                                                                                                                              |
| • | changes                in property taxes and energy costs;                                                                                                                                                                                                                                                                                    |
| • | changes                in federal income tax laws and federal mortgage financing                programs;                                                                                                                                                                                                                                     |
| • | competition                in the industries in which the Company operates;                                                                                                                                                                                                                                                                   |
| • | further                developments in the war on terrorism and related international                crises;                                                                                                                                                                                                                                  |
| • | uncertainties                of matters in litigation and other risks and                uncertainties;                                                                                                                                                                                                                                       |
| • | the                ability of the Company to generate taxable income in future years                to                utilize deferred tax assets and net operating loss carryforwards                that are                available;                                                                                                      |
| • | the                availability of financing under the Company’s letter of credit especially                in the sub-prime climate;                                                                                                                                                                                                   |
| • | the                Company’s ability to increase gross margins which are critical whether or                not there are increased sales;                                                                                                                                                                                              |
| • | the                Company’s use of incentives at either the wholesale or retail                level;                                                                                                                                                                                                                                  |
| • | the                impact of sub-prime lending on the availability of credit for the                broader                housing market;                                                                                                                                                                                                    |
| • | the                dependence on key customers within certain product                types;                                                                                                                                                                                                                                                   |
| • | the                potential fluctuation in the Company’s operating                results;                                                                                                                                                                                                                                             |
| • | uncertainties                regarding the impact of the disclosed restructuring steps in both                the                Recreational Vehicle and Housing                Segments.                                                                                                                                                    |

----

*Index*

----

*Index*

**ITEM      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK**

**ITEM      4. CONTROLS AND PROCEDURES**

----

*Index*

**PART      II. OTHER INFORMATION**

|   | See                Index to Exhibits incorporated by reference                herein. |
|--------|---------------------------------------------------------------------------------------|

----

*Index*

**SIGNATURES**

**COACHMEN      INDUSTRIES, INC.**

| Date:                October 31, 2007 | By:    | /s/                Richard M. Lavers                            |
|---------------------------------------|--------|-----------------------------------------------------------------|
|                                  |   | Richard                M. Lavers, Chief Executive Officer       |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
| Date:                October 31, 2007 | By:    | /s/                Colleen A. Zuhl                              |
|                                  |   | Colleen                A. Zuhl, Chief Financial Officer         |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
|                                  |   |                                                            |
| Date:                October 31, 2007 | By:    | /s/                Martin L. Miranda                            |
|                                  |   | Martin                L. Miranda, Vice President, Treasurer and |
|                                  |   | Corporate                Controller                             |

----

*Index*

**INDEX      TO EXHIBITS**

| Number                AssignedIn                RegulationS-K,                Item 601 | Description                of Exhibit                                                                                                                                                                                                                                |
|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (3)(a)(i)                                                                              | Articles                of Incorporation of the Company as amended on May 30, 1995 (incorporated                by reference to Exhibit 3(i) to the Company's Annual Report on Form                10-K                for the fiscal year ended December 31, 1995). |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (3)(a)(ii)                                                                             | Articles                of Amendment to Articles of Incorporation (incorporated by reference                to                Exhibit 4.2 to the Company's Form S-3 Registration Statement, File                No.                333-14579).                       |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (3)(b)                                                                                 | By-Laws                as modified through August 22, 2007.                                                                                                                                                                                                          |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (3)(b)(ii)                                                                             | Amendment                to Section 6.2 of the By-Laws, as amended effective August 22, 2007                (incorporated by reference to the Company’s Form 8-K filed August 28,                2007).                                                        |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (31.1)                                                                                 | Rule                13a-14(a) Certification of Chief Executive Officer.                                                                                                                                                                                              |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (31.2)                                                                                 | Rule                13a-14(a) Certification of Chief Financial Officer.                                                                                                                                                                                              |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (32.1)                                                                                 | Section                1350 Certification of Chief Executive Officer.                                                                                                                                                                                                |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (32.2)                                                                                 | Section                1350 Certification of Chief Financial                Officer.                                                                                                                                                                                 |

----

----