----

----

**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 June 30, 2007 and December 31,                2006                              | 3 |
|                                                                                                                          |   |
| Consolidated                Statements of Operations for the three and                six months ended June 30, 2007 and 2006 | 4 |
|                                                                                                                          |   |
| Consolidated                Statements of Cash Flows for the six months                ended June 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                4. Submission of Matters to a Vote of                Security Holders                                     | 27 |
|                                                                                                                          |   |
| Item                6. Exhibits                                                                                               | 27 |
|                                                                                                                          |   |
| Signatures                                                                                                                    | 28 |
|                                                                                                                          |   |
| Index                to Exhibits                                                                                              | 29 |

----

Index

**Coachmen      Industries, Inc. and Subsidiaries**

**Consolidated      Balance Sheets**

|                                                                                                                                                                                                                |   | June                30, |    |    | December                31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|---------|-----------------------------|--------|
|                                                                                                                                                                                                                |   | 2007                    |    |    | 2006                        |   |
| **Assets**                                                                                                                                                                                                          |   | (Unaudited)             |    |    |                        |   |
| CURRENT                ASSETS                                                                                                                                                                                       |   |                    |    |    |                        |   |
| Cash                  and cash equivalents                                                                                                                                                                          |   | $                       | 3,255   |    |                        | $      | 2,651 |   |
| Trade                  receivables, less allowance for doubtful receivables 2007 -                  $1,348                  and 2006 - $1,134                                                                       |   |                    | 38,840  |    |                        |   | 25,874 |   |
| Other                  receivables                                                                                                                                                                                  |   |                    | 2,172   |    |                        |   | 2,332 |   |
| Refundable                  income taxes                                                                                                                                                                            |   |                    | 3,218   |    |                        |   | 10,820 |   |
| Inventories                                                                                                                                                                                                         |   |                    | 74,871  |    |                        |   | 83,511 |   |
| Prepaid                  expenses and other                                                                                                                                                                         |   |                    | 2,013   |    |                        |   | 3,957 |   |
| Assets                  held for sale                                                                                                                                                                               |   |                    | -       |    |                        |   | 288 |   |
| Total                  current assets                                                                                                                                                                               |   |                    | 124,369 |    |                        |   | 129,433 |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| Property,                  plant and equipment**,** net                                                                                                                                                             |   |                    | 55,640  |    |                        |   | 57,018 |   |
| Goodwill                                                                                                                                                                                                            |   |                    | 12,993  |    |                        |   | 16,865 |   |
| Cash                  value of life insurance, net of loans                                                                                                                                                         |   |                    | 33,748  |    |                        |   | 31,119 |   |
| Other                                                                                                                                                                                                               |   |                    | 8,544   |    |                        |   | 8,699 |   |
| TOTAL                  ASSETS                                                                                                                                                                                       |   | $                       | 235,294 |    |                        | $      | 243,134 |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| **Liabilities                  and Shareholders' Equity**                                                                                                                                                           |   |                    |    |    |                        |   |   |   |
| CURRENT                  LIABILITIES                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| Short-term                  borrowings                                                                                                                                                                              |   | $                       | 13,423  |    |                        | $      | 9,284 |   |
| Accounts                  payable, trade                                                                                                                                                                            |   |                    | 31,293  |    |                        |   | 16,998 |   |
| Accrued                  income taxes                                                                                                                                                                               |   |                    | 15      |    |                        |   | 18 |   |
| Accrued                  expenses and other liabilities                                                                                                                                                             |   |                    | 31,322  |    |                        |   | 35,116 |   |
| Floorplan                  notes payable                                                                                                                                                                            |   |                    | 4,404   |    |                        |   | 4,156 |   |
| Current                  maturities of long-term debt                                                                                                                                                               |   |                    | 981     |    |                        |   | 1,077 |   |
| Total                  current liabilities                                                                                                                                                                          |   |                    | 81,438  |    |                        |   | 66,649 |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| Long-term                  debt                                                                                                                                                                                     |   |                    | 3,794   |    |                        |   | 3,862 |   |
| Deferred                  income taxes                                                                                                                                                                              |   |                    | 2,865   |    |                        |   | 4,524 |   |
| Postretirement                  deferred compensation benefits                                                                                                                                                      |   |                    | 8,051   |    |                        |   | 7,768 |   |
| Other                                                                                                                                                                                                               |   |                    | 1       |    |                        |   | - |   |
| Total                  liabilities                                                                                                                                                                                  |   |                    | 96,149  |    |                        |   | 82,803 |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| COMMITMENTS                  AND CONTINGENCIES** **(Note                  10)                                                                                                                                  |   |                    |    |    |                        |   |   |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| SHAREHOLDERS'                  EQUITY                                                                                                                                                                               |   |                    |    |    |                        |   |   |   |
|         Common                  shares, without par value: authorized 60,000 shares; issued 2007                  - 21,165                  shares and 2006 - 21,156 shares |   |                    | 92,470  |    |                        |   | 92,382 |   |
| Additional                  paid-in capital                                                                                                                                                                         |   |                    | 7,721   |    |                        |   | 7,648 |   |
| Accumulated                other comprehensive loss                                                                                                                                                                 |   |                    | (1      | )  |                        |   | (10 | ) |
| Retained                  earnings                                                                                                                                                                                  |   |                    | 98,108  |    |                        |   | 119,623 |   |
| Treasury                  shares, at cost, 2007 - 5,402 shares and 2006 - 5,433                  shares                                                                                                             |   |                    | (59,153 | )       |                        |   | (59,312 | ) |
| Total                  shareholders' equity                                                                                                                                                                         |   |                    | 139,145 |    |                        |   | 160,331 |   |
|                                                                                                                                                                                                                |   |                    |    |    |                        |   |   |   |
| TOTAL                  LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                         |   | $                       | 235,294 |    |                        | $      | 243,134 |   |

*See      Notes to Consolidated Financial      Statements.*

----

*Index*
**Coachmen      Industries, Inc. and      Subsidiaries**

**Consolidated      Statements of Operations**

|                                                                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|--------------------------------------------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                                                                                    |   | Three                  Months Ended June 30, |    |   | Six                  Months Ended June 30, |   |
|                                                                                                                                                                                                    |   | 2007                                         |    |   | 2006                                       |   |    | 2007   |   |   | 2006    |   |
| Net                  sales                                                                                                                                                                              |   | $                                            | 149,763 |   |                                       | $      | 155,321 |   |   | $      | 280,006 |   |   | $ | 317,875 |   |
| Cost                  of sales                                                                                                                                                                          |   |                                         | 143,769 |   |                                       |   | 147,251 |   |   |   | 272,586 |   |   |   | 303,392 |   |
|                          Gross profit                                                                                                                                |   |                                         | 5,994   |   |                                       |   | 8,070   |   |   |   | 7,420   |   |   |   | 14,483 |   |
| Operating                  expenses:                                                                                                                                                               |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Selling                                                                                                                                     |   |                                         | 5,939   |   |                                       |   | 5,247   |   |   |   | 11,752  |   |   |   | 10,426 |   |
| General                and administrative                                                                                                                                                               |   |                                         | 6,976   |   |                                       |   | 5,327   |   |   |   | 13,210  |   |   |   | 8,177 |   |
| Gain                on sale of assets, net                                                                                                                                                              |   |                                         | (22     | )      |                                       |   | (3,372  | )      |   |   | (467    | )      |   |   | (6,048 | ) |
|                          Goodwill impairment charge                                                                                                                  |   |                                         | 3,872   |   |                                       |   | -       |   |   |   | 3,872   |   |   |   | - |   |
|                                                                                                                                                                                                    |   |                                         | 16,765  |   |                                       |   | 7,202   |   |   |   | 28,367  |   |   |   | 12,555 |   |
|                          Operating income (loss)                                                                                                                     |   |                                         | (10,771 | )      |                                       |   | 868     |   |   |   | (20,947 | )      |   |   | 1,928 |   |
| Nonoperating                  (income) expense:                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Interest expense                                                                                                                            |   |                                         | 944     |   |                                       |   | 732     |   |   |   | 1,787   |   |   |   | 1,700 |   |
|                          Investment income                                                                                                                           |   |                                         | (479    | )      |                                       |   | (464    | )      |   |   | (953    | )      |   |   | (826 | ) |
|                          Other income, net                                                                                                                           |   |                                         | (119    | )      |                                       |   | (79     | )      |   |   | (215    | )      |   |   | (243 | ) |
|                                                                                                                                                                                                    |   |                                         | 346     |   |                                       |   | 189     |   |   |   | 619     |   |   |   | 631 |   |
|                          Income (loss) from continuing operations before income                  taxes                                                               |   |                                         | (11,117 | )      |                                       |   | 679     |   |   |   | (21,566 | )      |   |   | 1,297 |   |
| Income                  taxes (credit)                                                                                                                                                             |   |                                         | (994    | )      |                                       |   | 199     |   |   |   | (995    | )      |   |   | 413 |   |
| Net                  income (loss) from continuing operations                                                                                                                                 |   |                                         | (10,123 | )      |                                       |   | 480     |   |   |   | (20,571 | )      |   |   | 884 |   |
|                                                                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
| Discontinued                  operations                                                                                                                                                           |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Loss from operations of discontinued entities (net of tax credits                  of                  $(244) and $(419) in 2006) |   |                                         | -       |   |                                       |   | (176    | )      |   |   | -       |   |   |   | (505 | ) |
|                          Gain on sale of assets of discontinued entities (net of taxes of                  $1,510 in                  2006)                          |   |                                         | -       |   |                                       |   | -       |   |   |   | -       |   |   |   | 2,835 |   |
| Income                  (loss) from discontinued operations                                                                                                                                             |   |                                         | -       |   |                                       |   | (176    | )      |   |   | -       |   |   |   | 2,330 |   |
|                                 Net income (loss)                                                                                 |   | $                                            | (10,123 | )      |                                       | $      | 304     |   |   | $      | (20,571 | )      |   | $ | 3,214 |   |
|                                                                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
| Earnings (loss)                  per share - Basic                                                                                                                                            |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Continuing operations                                                                                                                       |   | $                                            | (.64    | )      |                                       | $      | .03     |   |   | $      | (1.31   | )      |   | $ | .06 |   |
|                          Discontinued operations                                                                                                                     |   |                                         | -       |   |                                       |   | (.01    | )      |   |   | -       |   |   |   | .15 |   |
|                                 Net earnings (loss) per share                                                                     |   |                                         | (.64    | )      |                                       |   | .02     |   |   |   | (1.31   | )      |   |   | .21 |   |
| Earnings                  (loss) per share - Diluted                                                                                                                                               |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Continuing operations                                                                                                                       |   |                                         | (.64    | )      |                                       |   | .03     |   |   |   | (1.31   | )      |   |   | .06 |   |
|                          Discontinued operations                                                                                                                     |   |                                         | -       |   |                                       |   | (.01    | )      |   |   | -       |   |   |   | .15 |   |
|                                 Net earnings (loss) per share                                                                     |   |                                         | (.64    | )      |                                       |   | .02     |   |   |   | (1.31   | )      |   |   | .21 |   |
|                                                                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
| Number                  of common shares used in the computation of earnings (loss) per                  share:                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
|                          Basic                                                                                                                                       |   |                                         | 15,726  |   |                                       |   | 15,625  |   |   |   | 15,722  |   |   |   | 15,611 |   |
|                          Diluted                                                                                                                                     |   |                                         | 15,726  |   |                                       |   | 15,643  |   |   |   | 15,722  |   |   |   | 15,634 |   |
|                                                                                                                                                                                                    |   |                                         |    |   |                                       |   |    |   |   |   |    |   |   |   |   |   |
| Cash                  dividends declared per common share                                                                                                                                          |   | $                                            | .03     |   |                                       | $      | .06     |   |   | $      | .06     |   |   | $ | .12 |   |

*See      Notes to Consolidated Financial      Statements.*

----

*Index*
**Coachmen      Industries, Inc. and      Subsidiaries**

**Consolidated      Statements of Cash Flows**

|                                                                                                                                                                                                                                                                                                          |   | Six                Months Ended June 30, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                          |   | 2007                                     |    |   | 2006 |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                                                                                                                          |   |                                     |    |   |   |   |
| Net                  income (loss)                                                                                                                                                                                                                                                                            |   | $                                        | (20,571 | ) |   | $ | 3,214 |   |
|                             Adjustments to reconcile net income (loss) to net cash used in                  operating                  activities:                                                                                                          |   |                                     |    |   |   |   |   |   |
| Depreciation                                                                                                                                                                                                                                                                                                  |   |                                     | 3,011   |   |   |   | 3,292 |   |
| Provision                  for doubtful receivables, net of recoveries                                                                                                                                                                                                                                        |   |                                     | 314     |   |   |   | 107 |   |
| Net                realized and unrealized losses on derivatives                                                                                                                                                                                                                                              |   |                                     | 9       |   |   |   | 24 |   |
| Goodwill                impairment charge                                                                                                                                                                                                                                                                     |   |                                     | 3,872   |   |   |   | - |   |
| Gains                on sale of properties and other assets, net                                                                                                                                                                                                                                              |   |                                     | (467    | ) |   |   | (10,393 | ) |
| Increase                  in cash surrender value of life insurance policies                                                                                                                                                                                                                                  |   |                                     | (1,120  | ) |   |   | (122 | ) |
| Deferred                  income tax provision (benefit)                                                                                                                                                                                                                                                      |   |                                     | (1,659  | ) |   |   | 1,658 |   |
| Other                                                                                                                                                                                                                                                                                                         |   |                                     | 1,337   |   |   |   | (18 | ) |
| Changes                in certain assets and liabilities, net of effects of acquisitions                and                dispositions:                                                                                                                                                                      |   |                                     |    |   |   |   |   |   |
| Trade                  receivables                                                                                                                                                                                                                                                                            |   |                                     | (13,336 | ) |   |   | 5,447 |   |
| Inventories                                                                                                                                                                                                                                                                                                   |   |                                     | 8,640   |   |   |   | (3,143 | ) |
| Prepaid                  expenses and other                                                                                                                                                                                                                                                                   |   |                                     | 1,944   |   |   |   | 5 |   |
| Accounts                  payable, trade                                                                                                                                                                                                                                                                      |   |                                     | 14,295  |   |   |   | 734 |   |
| Income                  taxes - accrued and refundable                                                                                                                                                                                                                                                        |   |                                     | 7,599   |   |   |   | 465 |   |
| Accrued                  expenses and other liabilities                                                                                                                                                                                                                                                       |   |                                     | (4,600  | ) |   |   | (8,393 | ) |
|                      Net cash used in operating activities                                                                                                                                                                                                                                     |   |                                     | (732    | ) |   |   | (7,123 | ) |
|                                                                                                                                                                                                                                                                                                          |   |                                     |    |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                                                                                                                                                                                                        |   |                                     |    |   |   |   |   |   |
| Proceeds                  from sale of properties and other assets                                                                                                                                                                                                                                            |   |                                     | 808     |   |   |   | 23,464 |   |
| Investments                  in life insurance policies                                                                                                                                                                                                                                                       |   |                                     | (1,509  | ) |   |   | (1,334 | ) |
| Purchases                  of property and equipment                                                                                                                                                                                                                                                          |   |                                     | (1,702  | ) |   |   | (3,361 | ) |
| Other                                                                                                                                                                                                                                                                                                         |   |                                     | 387     |   |   |   | 154 |   |
| Net                  cash provided by (used in) investing activities                                                                                                                                                                                                                                          |   |                                     | (2,016  | ) |   |   | 18,923 |   |
|                                                                                                                                                                                                                                                                                                          |   |                                     |    |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                                                                                                                                                                                                        |   |                                     |    |   |   |   |   |   |
| Proceeds                  from short-term borrowings                                                                                                                                                                                                                                                          |   |                                     | 10,659  |   |   |   | 7,070 |   |
| Payments                  of short-term borrowings                                                                                                                                                                                                                                                            |   |                                     | (6,272  | ) |   |   | (14,095 | ) |
| Proceeds                  from long-term debt                                                                                                                                                                                                                                                                 |   |                                     | -       |   |   |   | 255 |   |
| Payments                  of long-term debt                                                                                                                                                                                                                                                                   |   |                                     | (164    | ) |   |   | (2,283 | ) |
| Issuance                  of common shares under stock incentive plans                                                                                                                                                                                                                                        |   |                                     | 88      |   |   |   | 141 |   |
| Cash                  dividends paid                                                                                                                                                                                                                                                                          |   |                                     | (944    | ) |   |   | (1,877 | ) |
| Purchases                of common shares for treasury                                                                                                                                                                                                                                                        |   |                                     | (15     | ) |   |   | - |   |
|                                                      Net cash provided by (used in) financing                  activities |   |                                     | 3,352   |   |   |   | (10,789 | ) |
| Increase                  in cash and cash equivalents                                                                                                                                                                                                                                                        |   |                                     | 604     |   |   |   | 1,011 |   |
|                                                                                                                                                                                                                                                                                                          |   |                                     |    |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS:                                                                                                                                                                                                                                                                   |   |                                     |    |   |   |   |   |   |
| Beginning                  of period                                                                                                                                                                                                                                                                          |   |                                     | 2,651   |   |   |   | 2,780 |   |
| End                  of period                                                                                                                                                                                                                                                                                |   | $                                        | 3,255   |   |   | $ | 3,791 |   |
|                                                                                                                                                                                                                                                                                                          |   |                                     |    |   |   |   |   |   |
| 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 June 30, |    |   | Six                Months Ended June 30, |   |
|--------------------------------------|--------|--------------------------------------------|---------|--------|------------------------------------------|--------|
|                                 |   | 2007                                       |    |   | 2006                                     |   |   | 2007 |   |   | 2006 |   |
| Net                sales             |   |                                       |    |   |                                     |   |   |   |   |   |   |   |
| Recreational                vehicles |   | $                                          | 111,227 |   |                                     | $      | 111,110 |   |   | $ | 215,379 |   |   | $ | 230,964 |   |
| Housing                              |   |                                       | 38,536  |   |                                     |   | 44,211 |   |   |   | 64,627 |   |   |   | 86,911 |   |
|                                 |   |                                       |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total    |   | $                                          | 149,763 |   |                                     | $      | 155,321 |   |   | $ | 280,006 |   |   | $ | 317,875 |   |
|                                 |   |                                       |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

**2.           SEGMENT INFORMATION, continued.**

|                                                            |                                       |
|-----------------------------------------------------------------|--------------------------------------------|
|                                                            | Three                Months Ended June 30, |   | Six                Months Ended June 30, |   |
|                                                            | 2007                                       |   | 2006 |   | 2007 |   | 2006 |   |
| Gross                Profit                                     |                                       |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                            |                                       | $ | (69 | ) |   | $ | 1,278 |   |   | $ | (935 | ) |   | $ | 2,584 |   |
| Housing                                                         |                                       |   | 6,063 |   |   |   | 6,792 |   |   |   | 8,356 |   |   |   | 11,898 |   |
| Other                reconciling items                          |                                       |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | 1 |   |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                               |                                       | $ | 5,994 |   |   | $ | 8,070 |   |   | $ | 7,420 |   |   | $ | 14,483 |   |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                               |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                            |                                       | $ | 12,181 |   |   | $ | 6,603 |   |   | $ | 19,253 |   |   | $ | 10,258 |   |
| Housing                                                         |                                       |   | 5,016 |   |   |   | 4,301 |   |   |   | 10,037 |   |   |   | 9,299 |   |
| Other                reconciling items                          |                                       |   | (432 | ) |   |   | (3,702 | ) |   |   | (923 | ) |   |   | (7,002 | ) |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                               |                                       | $ | 16,765 |   |   | $ | 7,202 |   |   | $ | 28,367 |   |   | $ | 12,555 |   |
|                                                            |                                       |   |   |   |   |   |   |   |
| Operating                income (loss)                          |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                            |                                       | $ | (12,250 | ) |   | $ | (5,325 | ) |   | $ | (20,188 | ) |   | $ | (7,674 | ) |
| Housing                                                         |                                       |   | 1,047 |   |   |   | 2,491 |   |   |   | (1,681 | ) |   |   | 2,599 |   |
| Other                reconciling items                          |                                       |   | 432 |   |   |   | 3,702 |   |   |   | 922 |   |   |   | 7,003 |   |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                               |                                       | $ | (10,771 | ) |   | $ | 868 |   |   | $ | (20,947 | ) |   | $ | 1,928 |   |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-tax                income (loss) from continuing operations |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recreational                vehicles                            |                                       | $ | (12,270 | ) |   | $ | (5,356 | ) |   | $ | (20,315 | ) |   | $ | (8,025 | ) |
| Housing                                                         |                                       |   | 1,096 |   |   |   | 2,445 |   |   |   | (1,581 | ) |   |   | 2,588 |   |
| Other                reconciling items                          |                                       |   | 57 |   |   |   | 3,590 |   |   |   | 330 |   |   |   | 6,734 |   |
|                                                            |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                total                               |                                       | $ | (11,117 | ) |   | $ | 679 |   |   | $ | (21,566 | ) |   | $ | 1,297 |   |

|                                   |   | June                30, |    |   | December                31, |   |
|----------------------------------------|--------|-------------------------|---------|--------|-----------------------------|--------|
|                                   |   | 2007                    |    |   | 2006                        |   |
| Total                assets            |   |                    |    |   |                        |   |
| Recreational                vehicles   |   | $                       | 108,932 |   |                        | $      | 113,627 |   |
| Housing                                |   |                    | 60,618  |   |                        |   | 57,968 |   |
| Other                reconciling items |   |                    | 65,744  |   |                        |   | 71,539 |   |
| Total              |   | $                       | 235,294 |   |                        | $      | 243,134 |   |

----

*Index*

**3.         INVENTORIES.**

|                                                                                    |   | June                30, |   |   | December                31, |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------------|--------|
|                                                                                    |   | 2007                    |   |   | 2006                        |   |
|  Raw                  Materials                                                    |   |                    |   |   |                        |   |
|  Recreational                  vehicles                                            |   | $                       | 15,915 |   |                        | $      | 13,874 |   |
|  Housing                                                                           |   |                    | 5,978  |   |                        |   | 6,065 |   |
|  Total                                                                             |   |                    | 21,893 |   |                        |   | 19,939 |   |
|                                                                                    |   |                    |   |   |                        |   |   |   |
| Work                  in process                                                        |   |                    |   |   |                        |   |   |   |
|  Recreational                  vehicles                                            |   |                    | 15,104 |   |                        |   | 15,661 |   |
|                           Housing               |   |                    | 4,004  |   |                        |   | 3,466 |   |
|          Total                             |   |                    | 19,108 |   |                        |   | 19,127 |   |
|                                                                                    |   |                    |   |   |                        |   |   |   |
|                           Improved lots         |   |                    |   |   |                        |   |   |   |
|                           Housing               |   |                    | 201    |   |                        |   | 221 |   |
|          Total                             |   |                    | 201    |   |                        |   | 221 |   |
|                                                                                    |   |                    |   |   |                        |   |   |   |
|                           Finished goods        |   |                    |   |   |                        |   |   |   |
|                           Recreational vehicles |   |                    | 23,764 |   |                        |   | 35,079 |   |
|                           Housing               |   |                    | 9,905  |   |                        |   | 9,145 |   |
|                           Total                 |   |                    | 33,669 |   |                        |   | 44,224 |   |
|                                                                                    |   |                    |   |   |                        |   |   |   |
| Total                                                                                   |   | $                       | 74,871 |   |                        | $      | 83,511 |   |

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

|                                                |   | June                30,2007 |    |   | December                31,2006 |   |
|-----------------------------------------------------|--------|-----------------------------|---------|--------|---------------------------------|--------|
|                                                |   |                        |    |   |                            |   |
| Land                  and improvements              |   | $                           | 11,762  |   |                            | $      | 11,562 |   |
| Buildings                  and improvements         |   |                        | 61,195  |   |                            |   | 61,043 |   |
| Machinery                  and equipment            |   |                        | 25,059  |   |                            |   | 24,798 |   |
| Transportation                  equipment           |   |                        | 14,672  |   |                            |   | 14,310 |   |
| Office                  furniture and fixtures      |   |                        | 17,244  |   |                            |   | 17,481 |   |
|                                                |   |                        |    |   |                            |   |   |   |
| Total                                               |   |                        | 129,932 |   |                            |   | 129,194 |   |
| Less,                  accumulated depreciation     |   |                        | 74,292  |   |                            |   | 72,176 |   |
|                                                |   |                        |    |   |                            |   |   |   |
| Property,                  plant and equipment, net |   | $                           | 55,640  |   |                            | $      | 57,018 |   |

----

*Index*

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

|                                                                                                                                                     |   | June                30,2007 |   |   | December                31,2006 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------------|--------|
|                                                                                                                                                     |   |                        |   |   |                            |   |
| Wages,                  salaries, bonuses and commissions                                                                                                |   | $                           | 4,069  |   |                            | $      | 3,135 |   |
| Dealer                  incentives, including volume bonuses, dealer trips, interest                  reimbursement, co-op advertising and other rebates |   |                        | 1,338  |   |                            |   | 4,140 |   |
| Warranty                                                                                                                                                 |   |                        | 9,766  |   |                            |   | 11,099 |   |
| Insurance-products                  and general liability, workers compensation, group health and                  other                                 |   |                        | 7,823  |   |                            |   | 7,593 |   |
| Customer                  deposits and unearned revenues                                                                                                 |   |                        | 3,611  |   |                            |   | 3,865 |   |
| Litigation                                                                                                                                               |   |                        | 465    |   |                            |   | 345 |   |
| Interest                                                                                                                                                 |   |                        | 907    |   |                            |   | 955 |   |
| Sales                  and property taxes                                                                                                                |   |                        | 1,898  |   |                            |   | 1,226 |   |
| Other                  current liabilities                                                                                                               |   |                        | 1,445  |   |                            |   | 2,758 |   |
|                                                                                                                                                     |   |                        |   |   |                            |   |   |   |
| Total                                                                                                                                                    |   | $                           | 31,322 |   |                            | $      | 35,116 |   |

|                                                                                                                   |   | Three                Months Ended June 30, |   |   | Six                Months Ended June 30, |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                                                                                   |   | 2007                                       |   |   | 2006                                     |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                   |   |                                       |   |   |                                     |   |   |   |   |   |   |   |
| Balance                of accrued warranty at beginning of period                                                      |   | $                                          | 10,132 |   |                                     | $      | 16,605 |   |   | $ | 11,099 |   |   | $ | 20,005 |   |
|                                                                                                                   |   |                                       |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Warranties                issued during the period and changes in liability for pre-existing                warranties |   |                                       | 4,747  |   |                                     |   | 4,629 |   |   |   | 10,110 |   |   |   | 11,165 |   |
|                                                                                                                   |   |                                       |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Settlements                made during the period                                                                      |   |                                       | (5,113 | )      |                                     |   | (7,875 | ) |   |   | (11,443 | ) |   |   | (17,811 | ) |
|                                                                                                                   |   |                                       |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Balance                of accrued warranty at June 30                                                                  |   | $                                          | 9,766  |   |                                     | $      | 13,359 |   |   | $ | 9,766 |   |   | $ | 13,359 |   |

----

*Index*

**6.         COMPREHENSIVE INCOME (LOSS).**

|                                                              |   | Three                Months Ended June 30, |    |   | Six                Months Ended June 30, |   |
|-------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|------------------------------------------|--------|
|                                                              |   | 2007                                       |    |   | 2006                                     |   |   | 2007 |   |   | 2006 |   |
|                                                              |   |                                       |    |   |                                     |   |   |   |   |   |   |   |
| Net                income (loss)                                  |   | $                                          | (10,123 | )      |                                     | $      | 304 |   |   | $ | (20,571 | ) |   | $ | 3,214 |   |
| Unrealized                gains on cash flow hedges, net of taxes |   |                                       | 13      |   |                                     |   | 6 |   |   |   | 9 |   |   |   | 24 |   |
|                                                              |   |                                       |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                income (loss)                        |   | $                                          | (10,110 | )      |                                     | $      | 310 |   |   | $ | (20,562 | ) |   | $ | 3,238 |   |

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

|                                                                         |   | Three                Months Ended June 30, |    |   | Six                Months Ended June 30, |   |
|------------------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|------------------------------------------|--------|
|                                                                         |   | 2007                                       |    |   | 2006                                     |   |   | 2007 |   |   | 2006 |   |
| Numerator:                                                                   |   |                                       |    |   |                                     |   |   |   |   |   |   |   |
| Net                income (loss) available to common stockholders            |   | $                                          | (10,123 | )      |                                     | $      | 304 |   |   | $ | (20,571 | ) |   | $ | 3,214 |   |
| Denominator:                                                                 |   |                                       |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Number                of shares outstanding, end of period:                  |   |                                       |    |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of common shares used in basic EPS    |   |                                       | 15,726  |   |                                     |   | 15,625 |   |   |   | 15,722 |   |   |   | 15,611 |   |
| Effect                of dilutive securities                                 |   |                                       | -       |   |                                     |   | 18 |   |   |   | - |   |   |   | 23 |   |
| Weighted                average number of common shares used in dilutive EPS |   |                                       | 15,726  |   |                                     |   | 15,643 |   |   |   | 15,722 |   |   |   | 15,634 |   |

**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 |   |
|                                                                                                 |   | June                30,           |    |   | of                               |   |   | June                30, |   |   | of |   |   | to |   |
|                                                                                                 |   | 2007                              |    |   | Net                Sales         |   |   | 2006 |   |   | Net                Sales |   |   | 2006 |   |
| Net                  sales:                                                                     |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                                                   |   | $                                 | 111,227 |   |                             |   | 74.3 | % |   | $ | 111,110 |   |   |   | 71.5 | % |   |   | 0.1 | % |
|   Housing                                                                                  |   |                              | 38,536  |   |                             |   | 25.7 |   |   |   | 44,211 |   |   |   | 28.5 |   |   |   | (12.8 | ) |
| Consolidated                  total                                                                  |   |                              | 149,763 |   |                             |   | 100.0 |   |   |   | 155,321 |   |   |   | 100.0 |   |   |   | (3.6 | ) |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                  profit:                                                                  |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                                                   |   |                              | (69     | )      |                             |   | - |   |   |   | 1,278 |   |   |   | 0.8 |   |   |   | (105.4 | ) |
|   Housing                                                                                  |   |                              | 6,063   |   |                             |   | 4.0 |   |   |   | 6,792 |   |   |   | 4.4 |   |   |   | (10.7 | ) |
| Consolidated                  total                                                                  |   |                              | 5,994   |   |                             |   | 4.0 |   |   |   | 8,070 |   |   |   | 5.2 |   |   |   | (25.7 | ) |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses:                                                            |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Selling                                                                             |   |                              | 5,939   |   |                             |   | 4.0 |   |   |   | 5,247 |   |   |   | 3.4 |   |   |   | 13.2 |   |
|   General                  and administrative                                         |   |                              | 6,976   |   |                             |   | 4.6 |   |   |   | 5,327 |   |   |   | 3.4 |   |   |   | 31.0 |   |
|   Gain                  on sale of assets, net                                        |   |                              | (22     | )      |                             |   | - |   |   |   | (3,372 | ) |   |   | (2.1 | ) |   |   | (99.4 | ) |
|   Goodwill                  impairment charge                                              |   |                              | 3,872   |   |                             |   | 2.6 |   |   |   | - |   |   |   | - |   |   |   | 100.0 |   |
| Consolidated                  total                                                                  |   |                              | 16,765  |   |                             |   | 11.2 |   |   |   | 7,202 |   |   |   | 4.7 |   |   |   | 132.8 |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating                  expense                                                           |   |                              | 346     |   |                             |   | 0.2 |   |   |   | 189 |   |   |   | 0.1 |   |   |   | 83.1 |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income                  taxes  |   |                              | (11,117 | )      |                             |   | (7.4 | ) |   |   | 679 |   |   |   | 0.4 |   |   |   | n/m |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  taxes (credit)                                                          |   |                              | (994    | )      |                             |   | (0.7 | ) |   |   | 199 |   |   |   | 0.1 |   |   |   | n/m |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss) from continuing operations                                   |   |                              | (10,123 | )      |                             |   | (6.7 | ) |   |   | 480 |   |   |   | 0.3 |   |   |   | n/m |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued                  operations:                                                       |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loss                  from operations of discontinued entities, net                      |   |                              | -       |   |                             |   | - |   |   |   | (176 | ) |   |   | (0.1 | ) |   |   | 100.0 |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Income                  from discontinued operations                                     |   |                              | -       |   |                             |   | - |   |   |   | (176 | ) |   |   | (0.1 | ) |   |   | 100.0 |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                              |   | $                                 | (10,123 | )      |                             |   | (6.7 | )% |   | $ | 304 |   |   |   | 0.2 | % |   |   | n/m |   |
|                                                                                                 |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  n/m                  - not meaningful                                                          |   |                              |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

Note      9

*Restructuring Charges and Discontinued Operations*

----

*Index*

**                                                                                                       **

|                                                                                            |   | Six                Months Ended |    |   | Percentage                Change |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|
|                                                                                                 |   |                            |    |   | Percentage                       |   |   |   |   |   | Percentage |   |   | 2007 |   |
|                                                                                                 |   | June                30,         |    |   | of                               |   |   | June                30, |   |   | of |   |   | to |   |
|                                                                                                 |   | 2007                            |    |   | Net                Sales         |   |   | 2006 |   |   | Net                Sales |   |   | 2006 |   |
| Net                  sales:                                                                     |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                                                   |   | $                               | 215,379 |   |                             |   | 76.9 | % |   | $ | 230,964 |   |   |   | 72.7 | % |   |   | (6.7 | )% |
|   Housing                                                                                  |   |                            | 64,627  |   |                             |   | 23.1 |   |   |   | 86,911 |   |   |   | 27.3 |   |   |   | (25.6 | ) |
| Consolidated                  total                                                                  |   |                            | 280,006 |   |                             |   | 100.0 |   |   |   | 317,875 |   |   |   | 100.0 |   |   |   | (11.9 | ) |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                  profit:                                                                  |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Recreational                  vehicles                                                   |   |                            | (935    | )      |                             |   | (0.3 | ) |   |   | 2,584 |   |   |   | 0.8 |   |   |   | (136.2 | ) |
|   Housing                                                                                  |   |                            | 8,356   |   |                             |   | 2.9 |   |   |   | 11,898 |   |   |   | 3.8 |   |   |   | (29.8 | ) |
|   Other                                                                                    |   |                            | (1      | )      |                             |   | - |   |   |   | 1 |   |   |   | - |   |   |   | - |   |
| Consolidated                  total                                                                  |   |                            | 7,420   |   |                             |   | 2.6 |   |   |   | 14,483 |   |   |   | 4.6 |   |   |   | (48.8 | ) |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses:                                                            |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Selling                                                                             |   |                            | 11,752  |   |                             |   | 4.2 |   |   |   | 10,426 |   |   |   | 3.3 |   |   |   | 12.7 |   |
|   General                  and administrative                                         |   |                            | 13,210  |   |                             |   | 4.7 |   |   |   | 8,177 |   |   |   | 2.6 |   |   |   | 61.5 |   |
|   Gain                  on sale of assets, net                                        |   |                            | (467    | )      |                             |   | (0.2 | ) |   |   | (6,048 | ) |   |   | (1.9 | ) |   |   | (92.3 | ) |
|   Goodwill                  impairment charge                                              |   |                            | 3,872   |   |                             |   | 1.4 |   |   |   | - |   |   |   | - |   |   |   | n/m |   |
| Consolidated                  total                                                                  |   |                            | 28,367  |   |                             |   | 10.1 |   |   |   | 12,555 |   |   |   | 4.0 |   |   |   | 125.9 |   |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating                  expense                                                           |   |                            | 619     |   |                             |   | 0.2 |   |   |   | 631 |   |   |   | 0.2 |   |   |   | (1.9 | ) |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations before income                  taxes  |   |                            | (21,566 | )      |                             |   | (7.7 | ) |   |   | 1,297 |   |   |   | 0.4 |   |   |   | n/m |   |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  taxes (credit)                                                          |   |                            | (995    | )      |                             |   | (0.4 | ) |   |   | 413 |   |   |   | 0.1 |   |   |   | n/m |   |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss) from continuing operations                                   |   |                            | (20,571 | )      |                             |   | (7.3 | ) |   |   | 884 |   |   |   | 0.3 |   |   |   | n/m |   |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued                  operations:                                                       |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loss                  from operations of discontinued entities, net                      |   |                            | -       |   |                             |   | - |   |   |   | (505 | ) |   |   | (0.2 | ) |   |   | 100.0 |   |
|   Gain                  on sale of assets of discontinued entities, net                    |   |                            | -       |   |                             |   | - |   |   |   | 2,835 |   |   |   | 0.9 |   |   |   | (100.0 | ) |
|   Income                  from discontinued operations                                     |   |                            |    |   |                             |   |   |   |   |   | 2,330 |   |   |   | 0.7 |   |   |   | (100.0 | ) |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                              |   | $                               | (20,571 | )      |                             |   | (7.3 | )% |   | $ | 3,214 |   |   |   | 1.0 | % |   |   | n/m |   |
|                                                                                                 |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  n/m                  - not meaningful                                                          |   |                            |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

Note      9

*Restructuring Charges and Discontinued Operations*

----

*Index*

|                                              |   | Three                Months |   |   | Three                Months |   |   | Six                Months |   |   | Six                Months |   |
|---------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|---------------------------|--------|
|                                              |   | Ended                       |   |   | Ended                       |   |   | Ended                     |   |   | Ended                     |   |
|                                              |   | June                30,     |   |   | June                30,     |   |   | June                30,   |   |   | June                30,   |   |
|                                              |   | 2007                        |   |   | 2006                        |   |   | 2007                      |   |   | 2006                      |   |
|                                              |   |                        |   |   |                        |   |   |                      |   |   |                      |   |
| (Gain)                loss on sale of assets:     |   |                        |   |   |                        |   |   |                      |   |   |                      |   |
| **Continuing                operations:**         |   |                        |   |   |                        |   |   |                      |   |   |                      |   |
| Texas                property (Grapevine, TX)     |   | $                           | -      |   |                        | $      | -      |                      |   | $      | -                         |   |   | $ | (1,824 | ) |
| Michigan                property (Georgie Boy)    |   |                        | -      |   |                        |   | (420   | )                         |   |   | (305                      | )      |   |   | (475 | ) |
| Indiana                property (various)         |   |                        | -      |   |                        |   | -      |                      |   |   | (140                      | )      |   |   | (797 | ) |
| Florida                property (Palm Shores, FL) |   |                        | -      |   |                        |   | (1,180 | )                         |   |   | -                         |   |   |   | (1,180 | ) |
| Corporate                aircraft                 |   |                        | -      |   |                        |   | (1,772 | )                         |   |   | -                         |   |   |   | (1,772 | ) |
| Total                                             |   | $                           | -      |   |                        | $      | (3,372 | )                         |   | $      | (445                      | )      |   | $ | (6,048 | ) |
|                                              |   |                        |   |   |                        |   |   |                      |   |   |                      |   |   |   |   |   |
| **Discontinued                operations**:       |   |                        |   |   |                        |   |   |                      |   |   |                      |   |   |   |   |   |
| Miller                                            |   | $                           | -      |   |                        | $      | -      |                      |   | $      | -                         |   |   | $ | (2,522 | ) |
| Prodesign                                         |   |                        | -      |   |                        |   | -      |                      |   |   | -                         |   |   |   | (1,899 | ) |
| All                American Homes – Kansas  |   |                        | -      |   |                        |   | -      |                      |   |   | -                         |   |   |   | 76 |   |
| Total                                             |   |                        | -      |   |                        |   | -      |                      |   |   | -                         |   |   |   | (4,345 | ) |
| Taxes                                             |   |                        | -      |   |                        |   | -      |                      |   |   | -                         |   |   |   | 1,510 |   |
| Total,                net of taxes                |   | $                           | -      |   |                        | $      | -      |                      |   | $      | -                         |   |   | $ | (2,835 | ) |
|                                              |   |                        |   |   |                        |   |   |                      |   |   |                      |   |   |   |   |   |
| Legal                expense recoveries           |   | $                           | -      |   |                        | $      | -      |                      |   | $      | -                         |   |   | $ | (3,620 | ) |
|                                              |   |                        |   |   |                        |   |   |                      |   |   |                      |   |   |   |   |   |
| Goodwill                impairment charge         |   | $                           | 3,872  |   |                        | $      | -      |                      |   | $      | 3,872                     |   |   | $ | - |   |

----

*Index*

**NET      SALES**

**COST      OF SALES**

*Accounting        Changes and Error Corrections*

----

*Index*

**OPERATING      EXPENSES**

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

**GOODWILL      IMPAIRMENT CHARGE**

*Goodwill and Other Intangible Assets,*

**INTEREST      EXPENSE**

**INVESTMENT      INCOME**

----

*Index*

**OTHER      INCOME, NET**

**PRE-TAX      INCOME (LOSS)**

Note 2

**INCOME      TAXES**

*Accounting for Uncertainty in Income Taxes*

----

*Index*

**DISCONTINUED            OPERATIONS**

**NET      INCOME (LOSS)**

**LIQUIDITY,      CAPITAL RESOURCES AND FINANCIAL CONDITION**

----

*Index*

**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 of the Housing Segment to perform in new market segments                  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                  accuracy of the estimates of the costs to remedy the disclosed                  recreational vehicle warranty issues;                                                                                                                                                                                                              |
| • | 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;                                                                                                                                                                                                        |
| • | dependence                  on significant customers within certain product types;                                                                                                                                                                                                                                                                      |
| • | the                  potential fluctuation in the Company’s operating                  results;                                                                                                                                                                                                                                                   |
| • | uncertainties                  regarding the impact on sales 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**

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

|                             |   | For    |       |   | Withheld |   |
|----------------------------------|--------|--------|------------|--------|----------|--------|
|                             |   |   |       |   |     |   |
| Robert                J. Deputy  |   |   | 12,848,402 |   |     |   | 37,510 |   |
| Richard                M. Lavers |   |   | 12,847,809 |   |     |   | 38,103 |   |
| Edwin                W. Miller   |   |   | 10,788,993 |   |     |   | 2,096,919 |   |

Item      6. Exhibits

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

----

*Index*

**SIGNATURES**

**COACHMEN      INDUSTRIES, INC.**

| Date:                July 31, 2007 | By:    | /s/                Richard M. Lavers                      |
|------------------------------------|--------|-----------------------------------------------------------|
|                               |   | Richard                M. Lavers, Chief Executive Officer |
|                               |   |                                                      |
|                               |   |                                                      |
|                               |   |                                                      |
|                               |   |                                                      |
|                               |   |                                                      |
| Date:                July 31, 2007 | By:    | /s/                Colleen A. Zuhl                        |
|                               |   | Colleen                A. Zuhl, Chief Financial Officer   |
|                               |   |                                                      |
|                               |   |                                                      |

----

*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 September 9, 2005 (incorporated by reference                to the                Company's Form 8-K filed September 15, 2005).                                                                                      |
|                                                                                   |                                                                                                                                                                                                                                                                 |
| (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.                                                                                                                                                                                 |

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