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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT
OF 1934 (FEE REQUIRED) OR [ ]TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                      For the year ended December 31, 1997
                         Commission file number 0-22268
                          NATIONAL R.V. HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)
      Delaware                                           No. 33-0371079
  (State or other jurisdiction of            (I.R.S.Employer Identification No.)
  incorporation or organization)
  3411 N. Perris Blvd., Perris, California                         92571
  (Address of principal executive offices)                      (Zip Code)
         Registrant's telephone number, including area code:  (909) 943-6007
           Securities registered pursuant to Section 12(b) of the Act:  NONE
             Securities  registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.01 per share                           NASDAQ
        (Title of class)             (Name of each Exchange on which registered)

 Indicate  by check  mark  whether  the  registrant  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                    Yes X               No___

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

Aggregate  market value (based upon the closing sale price) of the voting stock
held by  nonaffiliated  stockholders  of  Registrant  as of March  18,  1998 was
approximately $129,985,192.

The number of shares outstanding of the Registrant's  common stock, as of March
18, 1998, was 6,490,639.

Documents Incorporated by Reference: Part III incorporates by reference portions
of the National R.V. Holdings, Inc. Proxy Statement for the 1998 Annual Meeting
of Stockholders.

<PAGE>

                                     PART I

Item 1.  Business of the Registrant

General

          National R.V.  Holdings,  Inc. (the  "Company") is one of the nation's
leading  manufacturers  of Class A motorhomes.  Through its National  R.V.,  Inc
("NRV")  subsidiary,  the Company  designs,  manufactures  and  markets  Class A
motorhomes and fifth-wheel  travel trailers under brand names including Dolphin,
Sea Breeze, Tropi-Cal, Tradewinds, and Sea View. Through its Country Coach, Inc.
("CCI")  subsidiary,  the Company  designs,  manufactures  and markets  high-end
(Highline)  Class A motorhomes and bus  conversions  under brand names including
Concept,  Affinity,  Magna,  Intrigue  and  Allure.  The  Company,  which  began
manufacturing  recreational  vehicles  ("RVs")  in 1964,  is the  fifth  largest
domestic  manufacturer of Class A motorhomes and sells its motorhomes  through a
network of 183 dealer locations in 39 states, Canada and Europe.

          The Company was incorporated in Delaware in 1988. NRV was incorporated
in  California in 1970 and its  predecessor  was organized in 1964. In May 1989,
affiliates of Siegler, Collery & Co., a New York-based investment firm ("Siegler
Collery"), through the Company, acquired all of the common stock of NRV. CCI was
incorporated  in Oregon in 1973. In November 1996, the Company  acquired all the
common stock of CCI. As used herein,  the term "Company" refers to National R.V.
Holdings, Inc., NRV and CCI unless the context otherwise requires.

          The  Company's  headquarters  are  located  at 3411 N.  Perris  Blvd.,
Perris, California 92571, and its telephone number is (909) 943-6007.

Recreational Vehicle Industry Overview

     Products

         Based upon standards  established by the Recreational  Vehicle Industry
Association  (the  "RVIA"),   RVs  are  commonly   classified  into  three  main
categories:  (i) motorhomes,  composed of Class A, B and C types; (ii) towables,
composed of fifth-wheel  travel trailers,  conventional  travel trailers,  truck
campers and folding camping trailers, and (iii) van conversions.

         Motorhomes.  Motorhomes are  self-powered  RVs built on a motor vehicle
chassis. The interior typically includes a driver's area and kitchen,  bathroom,
dining and sleeping areas.  Motorhomes are self-contained,  with their own power
generation,  heating, cooking,  refrigeration,  sewage holding and water storage
facilities,  so that they can belived in without  being  attached to  utilities.



<PAGE>

Motorhomes are generally categorized into A, B and C classes. Class A motorhomes
are constructed on a medium-duty truck chassis, which includes the engine, drive
train and other  operating  components.  Retail  prices  for Class A  motorhomes
generally  range from  $40,000 to  $150,000.  Highline  motorhomes,  which are a
subset of Class A motorhomes,  generally  range in retail price from $160,000 to
$1,000,000.  Class C  motorhomes  are built on a van or pick-up  truck  chassis,
which includes an engine, drive-train components and a finished cab section, and
generally range in retail price from $40,000 to $70,000.  Class B motorhomes are
van campers,  which  generally  contain  fewer  features than Class A or Class C
motorhomes.

         Towables.  Towables are non-motorized RVs. Fifth-wheel travel trailers,
similar to motorhomes in features and use, are constructed with a raised forward
section  that  attaches  to the bed of a pick-up  truck.  This allows a bi-level
floor plan and generally more living space than  conventional  travel  trailers.
Fifth-wheel  travel  trailers are typically less  expensive than  motorhomes and
range in retail price from $15,000 to $80,000.  Conventional travel trailers are
similar  to  fifth-wheel  travel  trailers  but do not have the  raised  forward
section.  Truck campers have many of the amenities  found on travel trailers and
slide into the bed of a pickup truck.  Folding  camping  trailers  contain fewer
features  than  other  towables  and are  constructed  with  collapsible  "tent"
sidewalls which fold for easy towing.

         Van  Conversions.  Van conversions are automotive vans converted by van
upfitters  to  include  such  features  as  entertainment  centers,  comfortable
seating, window treatments and lighting.


     Trends and Demographics

         According to the RVIA's wholesale statistics,  RV unit sales (excluding
van  conversions)  in 1997  increased  2.8% to 254,500 from 247,500 in 1996. The
aggregate wholesale value of these 1997 shipments was $5.5 billion, with Class A
motorhomes  comprising $2.6 billion or 47.7% of the total and fifth-wheel travel
trailers  comprising $1.0 billion or 17.8% of the total. Unit shipments of Class
A motorhomes in 1997  increased  3.0% to 37,600 from 36,500 in 1996. The average
wholesale price of Class A motorhomes  increased in 1997 to $69,925 from $63,172
in 1996. Unit shipments of fifth-wheel travel trailers increased in 1997 8.9% to
52,800 from 48,500 in 1996. The average  wholesale  price of fifth-wheel  travel
trailers increased in 1997 2.3% to $18,558 from $18,138 in 1996.

         While overall unit  shipments  have increased over the past five years,
the RV industry's manufacturing base has undergone a consolidation. Between 1992
and 1997, the number of Class A motorhome  manufacturers declined from 45 to 24.

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In addition,  during this period,  the aggregate  retail market share of the ten
largest Class A motorhome manufacturers increased from 82.5% to 93.0%.

         RVs  are  purchased  for a  variety  of  purposes,  including  camping,
visiting  family and friends,  sightseeing,  vacationing  and  enjoying  outdoor
activities  and sporting  events.  According to a University of Michigan  study,
approximately  8.2 million  households (or 9.6% of all households) in the United
States owned RVs in 1993, up from 7.7 million households in 1988 and 5.8 million
households in 1980. In addition,  the study indicated that 68% of all current RV
owners  and 43% of all  former  RV owners  plan to  purchase  another  RV in the
future.  This study further  indicated  that 75% of RVs purchased are used (RVIA
and market share  statistics  reflect new product sales only) with more than 29%
of these used RVs older than 15 years.  The  eventual  scrappage  of these older
units is expected to result in an  increasing  proportion  of new product  sales
over the next ten years.

         Ownership of RVs reaches its highest level among those  Americans  aged
55 to 64, with 16.0% of households  in this  category  owning RVs. The number of
Americans in this group,  which constitutes the Company's primary target market,
is projected to grow 38.7% from 1996 to 2005 as compared to 7.8% for the overall
population.  Baby  Boomers are defined as those born  between the years 1946 and
1964, and thus the leading edge of the Baby Boomer  generation  began turning 50
in 1996. This generation is expected to be more affluent and retire earlier than
past  generations.  As Baby Boomers enter and travel through the important 50 to
65 age group for RV sales, they represent the potential for a secular uptrend in
the RV industry.

         As motorhomes  have increased in popularity  due, in part, to the entry
of the Baby Boomer  generation  into the target market,  the purchasers of these
products have grown more  sophisticated  in their tastes.  The Company  believes
that as a result,  customers have demanded more value for their money, and brand
recognition and loyalty have become  increasingly  important.  These trends have
favored companies that can deliver quality, value and reliability on a sustained
basis.


     Business Development and Strategy

         The Company's business development and operating strategy is to deliver
high  quality,  innovative  products  that offer  superior  value to enhance the
Company's  position as one of the nation's  leading  manufacturers  of RVs. This
strategy focuses on the following key elements: (i) building upon and exploiting
recognition  of the  Company's  brand names;  (ii)  offering  the highest  value
products at  multiple  price  points to appeal to first time and repeat  buyers;
(iii) expanding its manufacturing  capacity and continuing to utilize vertically

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<PAGE>

integrated   manufacturing   processes;   (iv)  capitalizing  on  the  Company's
reputation to expand its presence in the Highline  market;  and (v)  identifying
and acquiring related businesses serving niche markets.

         Building upon and Exploiting  Recognition of the Company's Brand Names.
The Company  believes  that its brand  names and  reputation  for  manufacturing
quality products with excellent value have fostered strong consumer awareness of
the Company's  products and have  contributed to the growth of its net sales and
market share. The Company intends to capitalize on its brand name recognition in
order to increase its sales and market share, facilitate the introduction of new
products and enhance its dealer network.

         Offering the Highest Value  Products at Multiple Price Points to Appeal
to First Time and Repeat Buyers. The Company currently offers ten distinct lines
of RVs, which are available in a variety of lengths,  floorplans,  color schemes
and  interior  designs  and range in  suggested  retail  price  from  $40,000 to
$1,000,000.  Each model is  intended to attract  customers  seeking an RV within
their price range by offering value superior to competitive  products from other
manufacturers.   RVIA  data  indicates  that  most  motorhome   purchasers  have
previously owned a recreational vehicle, and the Company's models are positioned
to address the demands of these repeat customers as well as first time buyers.

         Expanded Manufacturing Capacity and Vertically Integrated Manufacturing
Processes.  The Company has expanded its  manufacturing  facilities  in order to
increase  its  production   flexibility  and   substantially   increase  overall
production volume to meet demand and anticipated growth. The Company designs and
manufactures a significant  number of the components used in the assembly of its
products,  rather than purchasing them from third parties.  The Company believes
that its vertically integrated  manufacturing processes allow it to achieve cost
savings and better quality control. In addition, the Company's in-house research
and development staff and on-site component manufacturing departments enable the
Company to ensure a timely supply of necessary  products and to respond  rapidly
to market changes.

         Capitalizing on the Company's  Reputation to Expand its Presence in the
Highline Market. The Company's Country Coach product offerings focus exclusively
on the  Highline  segment of the Class A  motorhome  market.  The  Company has a
strong  market  share in the  Highline  segment.  For the  twelve  months  ended
December 31, 1997, the Company was the fourth largest  manufacturer  of Highline
motorhomes,  with approximately  12.1% of this market, up from 9.3% in 1996. The
Company is actively  seeking to expand its share of this market by  capitalizing
on its  established  reputation,  continuing  to  offer  superior  products  and
expanding  its  production  capacity  in order to target  the  market's  growing

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<PAGE>

population  and  satisfy the desire of many  current RV owners to purchase  more
upscale vehicles.

         Identifying and Acquiring Related Businesses Serving Niche Markets.  As
illustrated by the Company's  recent  acquisition of Country Coach,  the Company
plans to expand its  business  through  the  strategic  acquisition  of targeted
businesses  in the RV  industry  and  related  areas.  The  Company  will target
acquisitions which it believes will result in expansion of the Company's product
lines and/or enhancement of operating efficiencies.


Business

     Products

         The Company's product strategy is to offer the highest value RVs across
a wide range of retail prices to appeal to a broad range of potential  customers
and to capture the business of brand-loyal  repeat  purchasers who tend to trade
up with each new  purchase.  The  Company's  National  RV  subsidiary  currently
manufactures  Class A  motorhomes  under its  Dolphin,  Sea  Breeze,  Tropi-Cal,
Tradewinds  and Sea View brand names and a line of fifth-wheel  travel  trailers
under  the Sea  Breeze  brand  name.  The  Company's  Country  Coach  subsidiary
currently manufactures Highline motorhomes under the Concept,  Affinity,  Magna,
Intrigue  and Allure  brand names and bus  conversions  under the Country  Coach
Prevost Conversion brand name.

         The Company's products are offered with a wide range of accessories and
options and manufactured with high-quality materials and components.  Certain of
the Company's Highline motorhomes can be customized to a particular  purchaser's
specifications.  Each  vehicle is  equipped  with a wide  range of  kitchen  and
bathroom  appliances,  audio  and  video  electronics,   communication  devices,
furniture, climate control systems and storage spaces.

         Country Coach Prevost Conversion.  The Country Coach Prevost Conversion
is a completely customized home on wheels, built on a diesel-powered bus chassis
and produced in 40 and 45 foot lengths.  The Country Coach Prevost Conversion is
available  in  customized  floorplans  including a model  featuring an expansive
slide-out room that adds 35 square feet of living area.  Suggested retail prices
range from  approximately  $650,000 to  $1,000,000.  The Country  Coach  Prevost
Conversion was introduced in 1979.

         Concept.  The  Concept is a  wide-body  bus-style  motorhome,  offering
virtually  all  the  features  and  amenities  of a  bus  conversion,  including
customization and a diesel-powered chassis. Among its many features, the Concept
has a Pentium computer-driven digital dash featuring a Global Positioning System
(GPS). The Concept is available in three floorplans and is produced in 40 and 45

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<PAGE>

foot  lengths.  The  Concept,  as with all the  Company's  Highline  motorhomes,
provides  substantial under coach  ("basement')  storage in insulated,  carpeted
storage  bays.  Suggested  retail  prices range from  approximately  $523,000 to
$552,000. The Concept was introduced in 1988.

         Affinity.  The Affinity is a wide-body bus-style motorhome,  built on a
diesel powered chassis.  The Affinity is a luxury model specially engineered for
a longer  wheel base,  shorter  front and rear  overhang  and a lower  center of
gravity. The Affinity is available in 48 floorplan  combinations and is produced
in 38 and 40 foot  lengths.  Suggested  retail  prices range from  approximately
$345,000 to $403,000. The Affinity was introduced in 1991.

         Magna. The Magna is a wide-body, bus-style motorhome, built on a diesel
powered  chassis.  The Magna is  available  with a slide-out  room  feature that
expands the interior of the motorhome and adds  approximately  32 square feet of
additional living space. The Magna is available in 36 floorplan combinations and
is produced in 36, 38 and 40 foot  lengths.  Suggested  retail prices range from
approximately $270,000 to $290,000. The Magna was introduced in 1991.

         Intrigue.  The Intrigue is a wide-body bus-style motorhome built on the
DynoMax  diesel-powered  chassis  built by CCI.  The Intrigue is available in 20
floorplan  combinations and is produced in 32, 36 and 40 foot lengths. One model
features an  expansive  slide-out  room that adds 32 square feet of living area.
Suggested  retail  prices range from  approximately  $185,000 to  $211,000.  The
Intrigue was introduced in 1994.

         Allure.  The Allure is a  wide-body  bus-style  motorhome  built on the
DynoMax  diesel-powered  chassis  built by CCI.  The Allure is  available  in 15
floorplan combinations and is produced in 32, 36, and 40 foot lengths. One model
features an  expansive  slide-out  room that adds 32 square feet of living area.
The  Allure is  positioned  as the  Company's  entry-level  Highline  motorhome.
Suggested  retail  prices range from  approximately  $158,000 to  $180,000.  The
Allure was introduced in 1995.

         Tradewinds.  The  Tradewinds is available in two floorplans on a diesel
powered chassis. These models are full-basement wide-body, bus-style motorhomes.
Both models have  automatic  slide-out  features that expand the interior of the
motorhome and add  approximately 36 square feet of additional living space. Both
models are produced in 36 foot lengths and are available with a choice of oak or
walnut interiors. Suggested retail prices range from $139,000 to $142,000.

         Dolphin.  The Dolphin is available in four  floorplans on a gas-powered
chassis. These models are full-basement wide-body,  bus-style motorhomes.  Three
models  have  automatic  slide-out  features  that  expand the  interior  of the
motorhome and add  approximately 36 square feet of additional  living space. The
Dolphin models are produced in 33 to 36 foot lengths and have  suggested  retail

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prices that range from $78,000 to $92,000.

         Tropi-Cal.  The Tropi-Cal is a wide-body  bus-style motorhome outfitted
similar to the Dolphin  with certain  distinct  features,  exterior  styling and
floorplans.  The  Tropi-Cal  is available in four  floorplans  on a  gas-powered
chassis and  produced in 33 to 36 foot  lengths.  Three models have an automatic
slide-out   feature  that  expands  the  interior  of  the  motorhome  and  adds
approximately 36 square feet of additional living space.
Suggested retail prices range from approximately $84,000 to $94,000.

         Sea Breeze. The Sea Breeze is a moderately-priced, bus-style motorhome,
built on a  gas-powered  chassis.  The Sea  Breeze  has lower  exterior  height,
offering  partial  basement  storage.  A  premium  model is  produced  under the
"Limited" name and has as standard  features  Corian  countertops,  power heated
side-view mirrors, deluxe trim and heated water and waste holding tanks. The Sea
Breeze is produced in 29, 31 and 33 foot lengths.  Suggested retail prices range
from  approximately  $64,000 to $72,000.  The Sea Breeze was  introduced  in May
1992.

         Sea  View.  The  Sea  View  is  available  in  three  floorplans  on  a
gas-powered  chassis.  These  models  are  full-basement  wide-body,   bus-style
motorhomes.  All three models have automatic  slide-out features that expand the
interior of the  motorhome  and add  approximately  36 square feet of additional
living space. The Sea View models are produced in 31 to 33 foot lengths and have
suggested retail prices that range from $77,000 to $78,000.

         Sea Breeze  Fifth-Wheel  Travel  Trailer.  The Sea  Breeze  fifth-wheel
travel  trailer  comes  in  six  floorplans  equipped  similar  to a Sea  Breeze
motorhome.  All floorplans  feature  standard living room and bedroom  slide-out
sections  and are produced in 30 to 37 foot  lengths.  Suggested  retail  prices
range from $42,000 to $51,000.


     Planned Product Introductions

         During 1998, NRV will develop a 40 foot Highline galley slide motorhome
built on a Country Coach Dynomax  chassis with a retail price of $200,000.  A 38
foot Tropi-Cal will be developed with a galley  slide-out and bedroom  slide-out
and a retail  price of  $105,000.  A 32 foot  triple  slide  fifth-wheel  travel
trailer will be developed with a retail price of $46,000.

         During  1998,  CCI will begin  building  all of its  motorhomes  on its
Dynomax chassis.  Galley slide-outs,  with a tested and proven exclusive Country
Coach design, will be available on all models.

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<PAGE>

Distribution and Marketing

         The  Company  markets  NRV  products  through a network  of 165  dealer
locations in 39 states,  Canada and Europe. These dealers generally carry all or
a portion of NRV's product lines along with competitors'  products.  The Company
markets CCI products through 18 dealer locations.  CCI utilizes a limited dealer
network for its Highline  motorhomes due to the selling  expertise  required and
the  tendency of Highline  customers  to make  destination-type  purchases.  The
Company  believes that each of the CCI dealers has  significant  experience with
top-of-the-line products and has demonstrated high standards for service.

         The Company generally  promotes its products through visits to dealers,
attendance at industry shows,  direct mail  promotions,  corporate  newsletters,
press releases,  trade and consumer  magazine  advertising and RV owner rallies.
From time to time,  the Company also offers  dealer or consumer  incentives.  In
addition,  to help promote customer  satisfaction and brand loyalty, the Company
sponsors  Dolphin  and  Country  Coach  International  clubs  for  owners of the
Company's products.  The clubs publish newsletters and magazines on a monthly or
quarterly  basis and  organize  RV rallies  and other  activities.  The  Company
continually  seeks consumer  preference  input from several  sources,  including
dealers, RV owners and the Company's sales representatives and, in response, the
Company implements changes in the design, decor and features of its products.

          Substantially  all of the Company's  motorhome sales are made on terms
requiring  payment  within 15 days or less of the dealer's  receipt of the unit.
Most dealers finance all, or  substantially  all, of the purchase price of their
inventory under "floor plan"  arrangements with banks or finance companies under
which the lender pays the Company  directly.  Dealers typically are not required
to commence loan repayments to such lenders for a period of at least six months.
The loan is  collateralized  by a lien on the vehicle.  Consistent with industry
practice, the Company has entered into repurchase agreements with these lenders.
In general,  the repurchase  agreements  provide that the Company is required to
repurchase  a unit after the unit is financed and if the "floor plan" lender has
repossessed the unit. Certain of these agreements limit the Company's  liability
to 12 to 18 months after the date of invoice of the unit.  At December 31, 1997,
the Company's  contingent  liability  under these  agreements was  approximately
$74.5  million.  The risk of loss under such  agreements is spread over numerous
dealers and lenders and is further reduced by the resale value of the motorhomes
the Company would be required to  repurchase.  The Company's  losses under these
agreements have not been material in the past.

          Many  finance   companies  and  banks  provide  retail   financing  to
purchasers of RVs. Certain  provisions of the U.S. tax laws applicable to second
residences, including the deductibility of mortgage interest and the deferral of
gain on a qualifying  sale,  currently  apply to motorhomes and travel  trailers
used as qualifying residences.

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<PAGE>

 Manufacturing Facilities and Production

         NRV owns and  operates a 354,000  square  foot  manufacturing  facility
located on  approximately  30 acres in Perris,  California.  NRV owns another 13
acres  of land  to be  used  for  future  expansion.  CCI  leases  and  operates
manufacturing  facilities  totaling 386,000 square feet located on approximately
40 acres in Junction City, Oregon.

         The  Company's  vehicles  are built by  integrating  manufacturing  and
assembly line processes.  The Company has designed and built its own fabricating
and assembly equipment and molds for a substantial  portion of its manufacturing
processes.  The Company  believes that its vertically  integrated  manufacturing
systems and processes  which it has developed  enable it to efficiently  produce
high-quality products.

          Among  other  items,  the  Company  fabricates,   molds  and  finishes
fiberglass to produce its front and rear-end  components,  manufactures  its own
walls and roofs, assembles sub-floors and molds plastic components.  In addition
to assembling its vehicles and installing  various options and accessories,  the
Company  manufactures the majority of the installed amenities such as cabinetry,
draperies,  showers  and  bathtubs.  After  purchasing  the basic chair and sofa
frames,  the  Company  also  manufactures  most  of the  furniture  used  in its
motorhomes. The Company believes that by manufacturing these components on site,
rather  than  purchasing  them from third  parties,  the Company  achieves  cost
savings,  better  quality  control and timely  supply of  necessary  components.
Chassis,  plumbing  fixtures,  floor  coverings,  hardware  and  appliances  are
purchased  in  finished   form  from  various   suppliers.   Due  to  California
environmental emission restrictions on the amount of fiberglass that the Company
can fabricate,  third parties  manufacture  certain  fiberglass  parts using the
Company's molds.

          The  Company  currently   operates  one  production  shift.   Capacity
increases can be achieved by adding a second shift.

          The Company  purchases  the  principal raw materials and certain other
components used in the production of its RVs from third parties.  Other than the
chassis,  these components and raw materials  typically have short delivery lead
times. With the exception of the chassis,  these materials,  including  plywood,
lumber and plastic,  are  generally  available  from numerous  sources,  and the
Company has not  experienced  any  significant  shortages  of raw  materials  or
components.


Product Development

         The Company  utilizes a combined  research and development  staff of 60
employees who concentrate on product development and enhancements. New ideas are
presented  to the staff  from  management  and are  derived  from a  variety  of
sources,  including  sales  representatives,  dealers and  consumers.  The staff

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utilizes  computer-aided  design  equipment  and  techniques  to  assist  in the
development   of  new  products  and  floor  plans  and  to  analyze   suggested
modifications  of existing  products  and  features.  After the initial  step of
development,  prototype models for new products are constructed and refined.  In
the case of modifications to certain features, new molds for various parts, such
as front-end caps and storage doors,  are produced and tested.  Upon  completion
and acceptance of the prototypes,  the new products or components are integrated
into the production  process.  The Company  believes that the  maintenance of an
in-house  research and development  staff enables the Company to respond rapidly
to ongoing  shifts in consumer  tastes and  demands.  Research  and  development
expenses were $2,711000 and $1,077,000 for the years ended December 31, 1997 and
1996,  respectively,  $423,000 for the seven months ended December 31, 1995, and
$780,000 for the fiscal year ended May 31, 1995.


Arrangements with Chassis Suppliers

          NRV purchases chassis which are manufactured by Ford Motor Company and
the  Chevrolet  Motor  Division  of  General  Motors  Corporation   pursuant  to
agreements with finance  companies  affiliated  with such  suppliers.  NRV has a
finance agreement with Freightliner  Custom Chassis Corporation for the purchase
of diesel pusher chassis.  The chassis  supplied by Freightliner  Custom Chassis
Corporation  is the only rear engine  diesel-powered  chassis used by NRV in its
motorhomes,  although other manufacturers of rear engine diesel-powered  chassis
exist. CCI purchases chassis from Gillig and, also manufactures its own chassis,
the  DynoMax,  which is used as the base upon  which  the  Allure  and  Intrigue
motorhomes are built. The Company takes advantage of cash discounts, for payment
upon delivery, that are generally provided for in the agreements. Such financing
agreements  generally  provide  that the Company  must pay for a chassis in full
prior to making any  alterations  or additions to the  chassis.  The  agreements
further  provide that either party may  terminate  the agreement at any time. In
the event of such termination, the Company may incur certain financing and other
costs in order to maintain an adequate supply of chassis.  The Company generally
maintains a one to two month production supply of a chassis in inventory. If any
of the Company's present chassis  manufacturers  were to cease  manufacturing or
otherwise reduce the availability of their chassis,  the business of the Company
could  be  adversely  affected.  The  industry,  as a whole,  from  time to time
experiences  short-term  shortages  of  chassis.  During  1998,  NRV  expects to
experience a shortage of diesel powered  chassis,  used on its Tradewinds  line,
due to a shortage of  transmissions.  NRV will be  allocated 12 chassis per week
through the end of the second  quarter.  The shortage is expected to be resolved
by the end of the year and is not expected to have a material  adverse impact on
the Company's results of operations.

                                       10
<PAGE>

Backlog

          The  Company's  backlog of  motorhome  orders was $98.4  million as of
February 28, 1998 and $59.9 million as of February 28, 1997.  All backlog orders
are subject to  cancellation.  To the extent not canceled,  the Company  expects
that its backlog as of February  28, 1998 will be filled  within 60 days of such
date.

Competition

          The motorhome market is intensely competitive,  with a number of other
manufacturers  selling  products  which  compete  with  those  of  the  Company.
According to Statistical Surveys, Inc., the two leading manufacturers  accounted
for  approximately  45.0% and 44.3% of total  retail  units  sold in the Class A
motorhome market during 1997 and 1996, respectively. These companies and certain
other competitors have substantially  greater financial and other resources than
the Company.  Sales of used motorhomes also compete with the Company's products.
The Company competes on the basis of value, quality, price and design. According
to Statistical  Surveys,  Inc., the Company's Class A retail market share of new
product  sales has  increased  from 1.9% in 1992 to 3.4% in 1993,  4.0% in 1994,
4.2% in 1995, 6.1% in 1996, and 7.8% in 1997.

Regulation

          The Company is subject to the  provisions of the National  Traffic and
Motor Vehicle Safety Act (the "Motor Vehicle Act") and the safety  standards for
RVs and components which have been  promulgated  thereunder by the Department of
Transportation.  The  regulations  that  have been  promulgated  under the Motor
Vehicle Act permit the  National  Highway  Traffic  Safety  Administration  (the
"NHTSA") to require a manufacturer to remedy vehicles containing defects related
to motor  vehicle  safety or  vehicles  which fail to conform to all  applicable
federal motor vehicle safety standards.  The Motor Vehicle Act also provides for
the recall and repair of vehicles which contain certain  hazards or defects.  In
addition,  the Company  has from time to time  instituted  voluntary  recalls of
certain motorhome units, none of which have had a material adverse effect on the
Company.

          The Company relies upon certifications from chassis manufacturers with
respect to  compliance of the Company's  vehicles with all  applicable  emission
control  standards.  The RVIA, of which the Company is a member, has promulgated
stringent  standards for quality and safety.  Each of the units  manufactured by
the Company has a RVIA seal placed upon it to certify that such  standards  have
been met.

          Federal  and state  authorities  have  various  environmental  control
standards relating to air, water, noise pollution and hazardous waste generation
and disposal which affect the business and operations of the Company. California
environmental  emission  regulations  limit the amount of  fiberglass  which the

                                       11
<PAGE>

Company may  fabricate.  The Company  believes that its  facilities and products
comply in all material  respects with applicable  environmental  regulations and
standards.  The Company is also subject to the  regulations  promulgated  by the
Occupational  Safety  and  Health  Administration   ("OSHA"),   which  regulates
workplace  health and safety.  The Company's plant is periodically  inspected by
representatives of OSHA and the RVIA.

Product Warranty

          The  Company  provides  retail  purchasers  of its  motorhomes  with a
limited  warranty  against defects in materials and  workmanship,  excluding the
chassis and certain specified  components which are separately  warranted by the
Company's suppliers. Service covered by warranty must be performed at either the
Company's  in-house  service  facility or any of its dealers or other authorized
service  centers.  The warranty  period  covers the lesser of one year or 18,000
miles.  The  Company's  warranty  reserve was $4.0 million at December 31, 1997,
which the Company believes sufficient to cover warranty claims.

Trademarks

          NRV's  Dolphin,  Tropi-Cal,  Sea Breeze,  Tradewinds,  Sea View,  Dura
Frame, and CCI's Affinity,  Magna,  Intrigue,  Allure, and Great Room trademarks
are  registered  with the  United  States  Patent and  Trademark  Office and are
material to the Company's business.  The Company does not rely upon any material
patents or licenses in the conduct of its business.

Legal Proceedings and Insurance

          From time to time,  the  Company is  involved  in  certain  litigation
arising  out of its  operations  in the  normal  course of  business.  Accidents
involving  personal  injuries and property damage occur from time to time in the
use of RVs. The Company maintains product liability  insurance in amounts deemed
adequate  by  management.  To date,  aggregate  costs to the Company for product
liability actions have not been material. The Company believes that there are no
claims or litigation pending, the outcome of which could have a material adverse
effect on the financial position of the Company.

Employees

          As of February 28, 1998, the Company employed a total of 1,740 people,
of which  1,597 were  involved in  manufacturing,  35 in  administration,  60 in
research and  development  and 48 in sales and marketing.  None of the Company's
personnel are represented by labor unions.  The Company  considers its relations
with its personnel to be good.

                                       12
<PAGE>

Item 2.  Properties

         NRV owns and  operates a 354,000  square  foot  manufacturing  facility
located on  approximately 30 acres in Perris,  California.  NRV owns 13 acres of
land  that  will  be  used  for  future  expansion.   CCI  leases  and  operates
manufacturing  facilities  totaling 386,000 square feet located on approximately
40 acres in Junction City,  Oregon. The Company believes that present facilities
are well maintained and in good condition. The plants are currently operating at
approximately 60% capacity.

Item 3.  Legal Proceedings

         There are no  material  legal  proceedings  to which the  Company  is a
party.

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

         None.

                                       13
<PAGE>

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The  Company's  Common  Stock,  par value $.01 per share  (the  "Common
Stock"),  has been  quoted on the Nasdaq  Stock  Market's  National  Market (the
"Nasdaq National  Market") under the symbol NRVH since September 30, 1993. Prior
to that time,  there was no public market for the Common  Stock.  In April 1996,
the Company  declared a 3-for-2 stock split paid on May 16, 1996.  The following
table sets forth,  for the calendar  quarters  indicated,  the high and low sale
prices for the Common  Stock as furnished  by the Nasdaq  National  Market after
giving retroactive effect to such 3-for-2 stock dividend.

    1997                             High              Low
First Quarter                      $ 15              $ 12 1/2
Second Quarter                       16 1/8            11 1/2
Third Quarter                        21 7/8            15 1/8
Fourth Quarter                       34 1/8            19
    1996                             High              Low
First Quarter                      $ 10 9/16         $   6 11/16
Second Quarter                       14 13/16          10 5/16
Third Quarter                        15                  8 5/8
Fourth Quarter                       17 1/8            13 1/4

         On March 18, 1998,  the last reported  sales price for the Common Stock
quoted on the Nasdaq National Market was $29.00 per share. As of March 18, 1998,
there were 79 record  holders of Common  Stock.  Such  number  does not  include
persons whose shares are held of record by a bank,  brokerage  house or clearing
agency, but does include such banks, brokerage houses and clearing agencies.

Dividends

         The Company has not paid any cash  dividends  or  distributions  on its
Common  Stock  and has no  intention  to do so in the  foreseeable  future.  The
Company  presently  intends to retain earnings for general  corporate  purposes,
including business expansion,  capital  expenditures and possible  acquisitions.
The declaration  and payment of future  dividends will be at the sole discretion
of the  Board of  Directors  and will  depend  on the  Company's  profitability,
financial  condition,  capital needs,  future prospects and other factors deemed
relevant  by the Board of  Directors.  The ability of the Company to declare and
pay dividends is restricted by the Revolving Credit Agreement,  dated as of July
28,  1997,  between  the  Company  and Union  Bank of  California,  N.A.,  which
prohibits  the  payment of  dividends  in cash or  property  unless the  Company
satisfies  certain   financial  tests  set  forth  therein.   See  "Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
Liquidity and Capital Resources."

                                       14
<PAGE>

Item 6.  Selected Financial Data
           SELECTED CONSOLIDATED FINANCIAL INFORMATION
           (In thousands, except per share and unit amounts)
<TABLE>
<CAPTION>

                                                                                            Seven Months
                                                                      Years Ended              Ended
                                                                      December 31,         December 31, Fiscal Years Ended May 31,
                                                                   1997    1996     1995      1995      1995      1994      1993
Operations Data:                                                                (Unaudited)
<S>                                                             <C>     <C>      <C>       <C>       <C>       <C>       <C>
Net sales                                                       $ 285,95$ 137,101$ 89,397  $ 53,062  $ 81,379  $ 71,749  $ 45,772
Cost of sales                                                     245,763 118,643  78,089    46,864    70,459    62,115    40,514
                                                                  ------- -------  ------    ------    ------    ------    ------
  Gross profit                                                     40,188  18,458  11,308     6,198    10,920     9,634     5,258
Selling expenses                                                    9,518   4,209   2,643     1,586     2,399     2,019     1,543
General and administrative expenses                                 5,649   2,899   2,455     1,233     2,243     1,706     1,504
Amortization of intangibles (1)                                       413      80       -         -         -       278       278
                                                                  ------- -------  ------    ------    ------    ------    ------
Operating income (loss)                                            24,608  11,270   6,210     3,379     6,278     5,631     1,933
Interest expense, net                                                 222     111       3       (15)       (8)      281       545
Other financing related costs                                         113     149     178       136       132       233       267
Gain on early extinguishment of debt                                    -       -       -         -         -      (226)        -
(Gain) loss on sale of land and equipment                               -       -       -         -       (23)       (1)        1
                                                                  ------- -------  ------    ------    ------    ------    ------
Income (loss) before income taxes and extraordinary item           24,273  11,010   6,029     3,258     6,177     5,344     1,120
Provision (benefit) for income taxes                                9,767   4,405   2,387     1,324     2,443     2,212       207
                                                                  ------- -------  ------    ------    ------    ------    ------
Net income (loss) before extraordinary items                       14,506   6,605   3,642     1,934     3,734     3,132       913
Loss on investment in marketable equity securities                      -       -    (958)        -      (958)        -         -
Gain on early extinguishment of debt                                    -       -     342       342         -         -         -
                                                                  ------- -------  ------    ------    ------    ------    ------
Net income (loss)                                                $ 14,506$  6,605$  3,026   $ 2,276   $ 2,776   $ 3,132     $ 913

Basic earnings per common share:
  Income before extraordinary items                                $ 2.32  $ 1.38  $ 0.77    $ 0.42    $ 0.77    $ 0.78    $ 0.41
  Extraordinary items                                                   -       -   (0.13)     0.07     (0.20)        -         -
                                                                  ------- -------  ------    ------    ------    ------    ------
    Net income                                                     $ 2.32  $ 1.38  $ 0.64    $ 0.49    $ 0.57    $ 0.78    $ 0.41
Diluted earnings per common share:
  Income before extraordinary items                                $ 2.09  $ 1.26  $ 0.75    $ 0.40    $ 0.74    $ 0.77    $ 0.36
  Extraordinary items                                                   -       -   (0.13)     0.07     (0.19)        -         -
                                                                  ------- -------  ------    ------    ------    ------    ------
    Net income                                                     $ 2.09  $ 1.26  $ 0.62    $ 0.47    $ 0.55    $ 0.77    $ 0.36
Weighted average number of common shares outstanding:
  Basic                                                             6,243   4,793   4,713     4,610     4,860     4,004     2,252
  Diluted                                                           6,926   5,258   4,845     4,812     5,029     4,052     2,502
Other Data:
Class A units sold                                                  3,039   2,042   1,504       905     1,476     1,413       851
Class C units sold (2)                                                  -       -       -         -         -       143       335
Fifth-Wheel Travel Trailers sold                                      258     210     299       132       217         -         -
Balance Sheet Data:
Total assets (3)                                                 $ 87,204$ 68,050$ 34,308  $ 34,308  $ 41,592  $ 45,972  $ 37,416
Working capital                                                    39,271  29,553  15,080    15,080    15,482    17,695     8,368
Long-term debt (4)                                                  6,703   7,272   7,034     7,034    16,282    16,629    24,367
Stockholders' equity                                               60,958  45,532  18,625    18,625    18,389    19,585     2,338
</TABLE>

                                       15
<PAGE>



(1)      Reflects the  amortization  of the costs relating to the acquisition of
         NRV by the Company,  on May 26, 1989 (the  "Acquisition")  and goodwill
         related to the  acquisition  of CCI on November 6, 1996,  over five and
         twenty years,  respectively,  from May 26, 1989.  The  Acquisition  was
         accounted for as a purchase transaction.
(2)      The Company ceased manufacturing Class C motorhomes in January 1994
(3)      Includes a $13.8 million  restricted cash account funded by the Company
         at the time of the  Acquisition,  which was reduced to $13.5 million at
         the time of a  restructuring  effected in 1991, to secure $13.5 million
         of notes (the "Secured  Sellers'  Notes")  issued by the Company to the
         sellers of NRV. The  restricted  cash was used to pay the notes in full
         on September 1, 1995.
(4)      Includes the Secured Sellers' Notes.

                                       16
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

         This  analysis  of the  Company's  financial  condition  and  operating
results  should  be  viewed  in  conjunction  with  the  accompanying  financial
statements including the notes thereto.

General

         On November 6, 1996,  the Company  acquired all shares of capital stock
of CCI through the  issuance of 543,806  shares of Common  Stock  valued at $9.0
million.  Net assets acquired  included the assumption of $10.1 million of debt.
The purchase price exceeded the fair value of net assets acquired by $8,191,000,
recorded as goodwill and is being amortized over 20 years.

         In December 1996, the Company  completed a private  placement of
900,000 shares of Common Stock  resulting in $10.9 million of net proceeds to
the Company.

         In  1995,  the  Company  changed  its  fiscal  year  end from May 31 to
December 31.

                                       17
<PAGE>

Results of Operations

         The following table sets forth for the periods indicated the percentage
of  net  sales   represented  by  certain  items   reflected  in  the  Company's
Consolidated Statement of Income:
<TABLE>
<CAPTION>
                                                                       Percentage of Net Sales
                                                                                         Seven Months  Fiscal Year
                                                                    Years Ended             Ended        Ended
                                                                    December 31,          December 31,   May 31,
                                                                  1997    1996   1995       1995          1995
                                                                              (Unaudited)
<S>                                                               <C>     <C>     <C>       <C>           <C>
Net sales                                                         100.0   100.0   100.0     100.0         100.0
Cost of sales                                                      86.0    86.5    87.4      88.3          86.6
                                                                  -----   -----   -----     -----         -----
Gross profit                                                       14.0    13.5    12.6      11.7          13.4
Selling                                                             3.3     3.1     3.0       3.0           2.9
General and administrative                                          2.0     2.1     2.7       2.3           2.8
Amortization of intangibles                                         0.1     0.1       -         -             -
                                                                  -----   -----   -----     -----         -----
Operating income                                                    8.6     8.2     6.9       6.4           7.7
Interest expense, net                                               0.1     0.1       -         -             -
Other financing related costs                                       0.0     0.1     0.2       0.3           0.1
Gain on early extinguishment of debt                                  -       -       -         -             -
                                                                  -----   -----   -----     -----         -----
Income before income taxes and extraordinary item                   8.5     8.0     6.7       6.1           7.6
Provision for income taxes                                          3.4     3.2     2.7       2.5           3.0
                                                                  -----   -----   -----     -----         -----
Income before extraordinary item                                    5.1     4.8     4.0       3.6           4.6
Extraordinary loss on sale of marketable equity securities            -       -    (1.1)        -          (1.2)
Extraordinary gain on early extinguishment of debt                    -       -     0.4       0.7          -
                                                                  -----   -----   -----     -----         -----
Net income                                                          5.1     4.8     3.3       4.3           3.4

</TABLE>

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

         Net sales in 1997 increased by $148.9  million,  or 108.6%,  from 1996.
This increase resulted primarily from a 431 unit sales increase at CCI, acquired
in  November  1996,  from 69 units in 1996 to 500 units in 1997.  NRV's sales of
Class A motorhomes  increased 565 units in 1997 to 2,539 units compared to 1,974
units in 1996, and the average sales price  increased  17.7%  reflecting  strong
demand for higher-priced  motorhomes with slide-out rooms.  Sales of fifth-wheel
travel trailers increased 48 units in 1997 to 258 units compared to 210 units in
1996.

         Cost of goods sold in 1997  increased by $127.1  million or 107.1% from
1996 resulting primarily from increased net sales. Gross profit margin was 14.0%
in 1997  compared  to  13.5% in  1996.  The  increase  resulted  primarily  from
manufacturing efficiencies realized from operating at a higher production level.

         Selling  expenses in 1997 increased by $5.3 million or 126.1% from 1996
primarily  due to  including a full year of expense at CCI  compared to only two

                                       18
<PAGE>

months in 1996.  Increases  at NRV were due to  commissions  resulting  from the
increase in net sales and increased  promotional  costs.  As a percentage of net
sales,  selling expenses increased to 3.3% in 1997 from 3.1% in 1996. CCI incurs
higher selling costs which is typical in the highline motorhome market.

         General and  administrative  expenses in 1997 increased by $2.8 million
or 94.9% due to  including  a full year of expense at CCI  compared  to only two
months  in 1996.  As a  percentage  of net  sales,  general  and  administrative
expenses decreased to 2.0% in 1997 from 2.1% in 1996.

         Amortization  of  intangibles  increased  $0.3  million in 1997 to $0.4
million from $0.1 million in 1996, with a full year of amortization expense from
the CCI acquisition compared to only two months in 1996.

         As a result of the  foregoing,  operating  income in 1997  increased by
$13.3  million,  or 118.4%,  to $24.6  million.  As a  percentage  of net sales,
operating income increased to 8.6% in 1997 from 8.2% in 1996.

         Other expenses, which includes net interest expense and other financing
related costs, increased by $75,000, or 28.8%, to $335,000 in 1997 from $260,000
in 1996.

         As a  result  of the  foregoing,  income  before  income  taxes in 1997
increased $13.3 million,  or 120.5% from 1996 to $24.3 million.  As a percentage
of net sales, income before income taxes increased to 8.5% from 8.0% in 1996.

         Provision  for income  taxes in 1997 and 1996 was $9.8 million and $4.4
million,  respectively,  representing a $5.4 million increase. The effective tax
rate in 1997 was 40.2% compared to 40.0% in 1996.

         As a result of the foregoing,  net income  increased  $7.9 million,  or
119.6%,  to $14.5  million  from $6.6 million in 1996.  As a  percentage  of net
sales, net income increased to 5.1% from 4.8% in 1996.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995(Unaudited)

         Net sales in 1996 increased by $47.7 million,  or 53.4% from 1995. This
increase  resulted  primarily  from a 538  unit  increase  in the  sales  of the
Company's  Class  A  motorhomes,  offset  somewhat  by an 89  unit  decrease  in
Fifth-Wheel  Travel  Trailers.  In  addition,  the net  sales  increase  was due
partially  to new model  year unit  price  increases  implemented  in 1996.  The
remaining  increase  resulted  from a change in the  product  mix of its Class A
motorhomes,  with the Company  selling 587 more of its more expensive units with
the slide-out feature in 1996 than in 1995.

                                       19
<PAGE>

         Cost of goods  sold in 1996  increased  by $40.6  million or 51.9% from
1995 resulting primarily from increased net sales. Gross profit margin was 13.5%
in 1996  compared  to  12.6% in  1995.  The  increase  resulted  primarily  from
manufacturing efficiencies realized from operating at a higher production level.

         Selling  expenses in 1996  increased by $1.6 million or 59.3% from 1995
primarily  due to  commissions  resulting  from the  increase  in net  sales and
increases in promotional  costs. As a percentage of net sales,  selling expenses
increased to 3.1% in 1996 from 3.0% in 1995.

         General and  administrative  expenses in 1996 increased by $0.4 million
or 18.1% from 1995.  As a percentage  of net sales,  general and  administrative
expenses decreased to 2.1% in 1996 from 2.7% in 1995.

         Amortization  of intangibles  increased  $80,000 in 1996 due to the CCI
acquisition.

         As a result of the  foregoing,  operating  income in 1996  increased by
$5.1  million,  or  81.5%,  to $11.3  million.  As a  percentage  of net  sales,
operating income increased to 8.2% in 1996 from 6.9% in 1995.

         Other expenses, which includes net interest expense and other financing
related  costs,  increased by $79,000,  or 43.6%,  to $260,000  from $181,000 in
1995.

         As  a  result  of  the  foregoing,   income  before  income  taxes  and
extraordinary  items in 1996 increased $5.0 million, or 82.6% from 1995 to $11.0
million.  As  a  percentage  of  net  sales,  income  before  income  taxes  and
extraordinary items increased to 8.0% from 6.7% in 1995.

         Provision  for income  taxes in 1995 and 1996 was $2.4 million and $4.4
million,  respectively,  representing a $2.0 million increase. The effective tax
rate in 1996 was 40.0% compared to 39.6% in 1995.

         As a result,  income before extraordinary items increased $3.0 million,
or 81.4%,  to $6.6  million from $3.6  million in 1995.  As a percentage  of net
sales, income before extraordinary items increased to 4.8% from 4.0% in 1995.

         The Company incurred a $958,000 extraordinary loss on its investment in
marketable  equity  securities in 1995. In September 1995, the Company  redeemed
$13,500,000 of outstanding  promissory notes due January 15, 1998,  resulting in
an after-tax gain of $342,000.

                                       20
<PAGE>

         As a result,  net  income  increased  $3.6  million,  or 118.3% to $6.6
million from $3.0  million in 1995.  As a  percentage  of net sales,  net income
increased to 4.8% from 3.3% in 1995.

Seven Months Ended December 31, 1995 Compared to Seven Months Ended December 31,
1994 (Unaudited)

         On December 26, 1995,  the Company  changed its year end from May 31 to
December 31.  Results of operations  for the seven month periods ended  December
31, 1995 and 1994 are not necessarily  indicative of operating  results expected
for a full (12 month) year.

         Net sales for the seven  months ended  December  31, 1995  increased by
$8.0  million or 17.8% from the seven  months  ended  December  31,  1994.  This
increase  resulted  primarily from a 28 and 82 unit increase in the sales of the
Company's Class A motorhomes and fifth-wheel travel trailers,  respectively.  In
addition,  the net sales  increase  was due  partially to August 1995 unit price
increases on the Company's Class A motorhomes.  The remaining  increase resulted
from a change in the  product  mix of its Class A  motorhomes,  with the Company
selling  a  substantially  higher  proportion  of  its  more  expensive  Dolphin
motorhome for the seven months ended  December 31, 1995 than for the same period
last year.

         Cost of  goods  sold for the  seven  months  ended  December  31,  1995
increased by $7.5 million or 19.1% from the seven months ended December 31, 1994
resulting  primarily from increased net sales. Gross profit margin for the seven
months ended  December 31, 1995 was 11.7%  compared to 12.7% for the same period
last year.  The decrease was due mainly to fiberglass  rework that resulted from
overuse of molds when  increasing  the rate of  production  to handle the strong
demand  for 1996  models.  New molds  have been  made to  handle  the  increased
production rate.

         Selling expenses for the seven months ended December 31, 1995 increased
by $243,000 or 18.1% from the seven months ended December 31, 1994 primarily due
to  commissions  resulting  from the  increase  in net  sales and  increases  in
promotional  costs.  As a percentage  of net sales,  selling  expenses were 3.0%
unchanged from the comparable period last year.

         General and administrative expenses for the seven months ended December
31, 1995 increased by $313,000 or 34.0% from the seven months ended December 31,
1994  primarily  due to the annual  management  bonuses  falling in the month of
December,  the end of the short period, rather than the normal month of May, the
last  month in the fiscal  year.  As a  percentage  of net  sales,  general  and
administrative expenses increased to 2.3% from 2.0% during the comparable period
last year.

                                       21
<PAGE>

         As a result of the  foregoing,  operating  income for the seven  months
ended December 31, 1995 decreased by $67,000 or 1.9% from the seven months ended
December 31, 1994. As a percentage of net sales,  operating  income decreased to
6.4% from 7.7% during the comparable period last year.

         Other expenses, which includes net interest expense and other financing
related  costs,  increased by $81,000,  to $121,000 from $40,000 last year.  The
increase was due mainly to lower earnings on invested funds as the $13.5 million
of  restricted  funds was used to retire the  related  obligations  to  previous
owners.

         As  a  result  of  the  foregoing,   income  before  income  taxes  and
extraordinary  item for the seven  months ended  December 31, 1995  decreased by
$148,000 or 4.3% from the seven months ended  December 31, 1994. As a percentage
of net sales,  income before income taxes and  extraordinary  item  decreased to
6.1% from 7.6% during the comparable period last year.

         Provision for income taxes for the seven months ended December 31, 1995
and 1994 was $1.3 million and $1.4 million, respectively. The effective tax rate
for the seven  months  ended  December  31,  1995 and 1994 was 40.7% and  40.5%,
respectively.

         As a result,  income before  extraordinary item decreased  $92,000,  or
4.5%,  to $1.9 million for the seven  months  ended  December 31, 1995 from $2.0
million for the  comparable  period  last year.  As a  percentage  of net sales,
income  before  extraordinary  item  decreased  to 3.6%  from  4.5%  during  the
comparable period last year.

         On September 1, 1995, the Company  redeemed  $13,500,000 of outstanding
promissory  notes due  January  15,  1998,  resulting  in an  after-tax  gain of
$342,000.  The  promissory  notes  were  issued  to the  previous  owners of the
Company's  wholly-owned  operating subsidiary in connection with its acquisition
in 1989, and were collateralized by a $13,500,000 restricted cash account of the
Company. Funds from such restricted cash account were used for the redemption.

         As a result, net income increased  $250,000,  or 12.3%, to $2.3 million
for the  seven  months  ended  December  31,  1995  from  $2.0  million  for the
comparable  period last year. As a percentage of net sales, net income decreased
to 4.3% from 4.5% during the comparable period last year.

Liquidity and Capital Resources

         During 1997, the Company financed its operations  primarily through its
existing cash,  income from operations and its credit facility.  At December 31,
1997, the Company had working capital of $39.3 million compared to $29.6 million
at December 31, 1996.  This increase of $9.7 million was primarily due to a $2.7
million  increase in cash, $5.9 million increase in accounts  receivable,  and a

                                       22
<PAGE>

$3.5 million increase in inventory,  partially offset by a $1.3 million increase
in accounts payable and $3.9 million increase in accrued expenses.  The increase
in accrued  expenses was due  primarily  to a $2.2 million  increase in warranty
reserve  resulting from  increased unit sales, a revision in the  computation of
the estimate for NRV, and  additional  reserve for the chassis  produced at CCI.
Net cash provided by operating  activities  was $11.0 million for the year ended
December 31, 1997.

         During the year ended  December  31,  1997,  net cash used in investing
activities  was $8.5 million and includes $5.6 million of capital  expenditures,
related  primarily  to  the  new  building  construction  at  NRV  and  building
refurbishing at CCI, and $2.7 million of expenditures related to the acquisition
of a limited partnership interest in Dune Jet Services, L.P., a Delaware limited
partnership  formed for the purposes of acquiring  and operating an airplane for
the partners'  business uses and for third-party  charter  flights.  The general
partner of the Partnership is Dune Jet Services,  Inc., a Delaware  corporation,
the sole stockholder of which is the Company's Chairman, Mr. Gary N. Siegler.

         During the twelve months ended  December 31, 1997, net cash provided by
financing activities was $0.2 million.

         As of  December  31,  1997,  the Company  had  short-term  debt of $0.6
million and long-term debt of $6.7 million. Short-term debt consisted of current
maturities of the Company's long-term debt. At December 31, 1997, long-term debt
consisted  primarily of the Company's two  industrial  development  revenue bond
issues.  The first issue ($2.0 million  original  principal  amount) was for the
1985  construction of the NRV facility.  The second issue ($5.0 million original
principal  amount) was used for the  construction  of a new 154,000  square foot
facility at NRV completed in 1997. In February 1998, the Company determined that
it had exceeded a capital expenditure limitation contained in the loan agreement
and certain related  agreements  governing the Company's 1995 industrial revenue
bond  issue (the  "Bond  Agreements"),  of which  approximately  $4,700,000  was
outstanding at December 31, 1997. As a result,  the Bond Agreements require that
the Company prepay such debt in full at an amount equal to 100% of the principal
amount of such  debt plus  accrued  interest.  The  Company  has  delivered  the
prepayment  notice  required by the Bond  Agreements  and is scheduled to prepay
such debt in April 1998.

         During 1997, the Company and its subsidiaries entered into two separate
revolving  credit  facilities   aggregating  $40  million  with  Union  Bank  of
California  (the  "Bank").  The Company's  $20 million  credit  facility will be
available to finance potential acquisitions. The Company's two subsidiaries, NRV
and CCI,  jointly entered into a separate $20 million credit facility which will
be  available  for  general  corporate  and  working  capital  needs and capital
expenditures. Amounts borrowed under the credit facilities will bear interest at
the Bank's  prime rate or at a  LIBOR-based  rate.  Both credit  facilities  are
secured by  substantially  all of the assets of the Company and its subsidiaries

                                       23
<PAGE>

and contain, among other provisions,  certain financial covenants, including net
worth and debt  covenants.  At December  31, 1997,  no amounts were  outstanding
under these revolving credit facilities.

         During the year ended December 31, 1997, the Company  incurred  capital
expenditures  of  $5.6  million  related  mainly  to the  completion  of the new
facility  at NRV and the  refurbishing  of a  building  at  CCI,  and  equipment
required for each of these buildings. The Company anticipates that it will incur
capital expenditures of approximately $3.0 million in 1998.

         The Company  believes  that the  combination  of  internally  generated
funds, existing capital and funds available from its existing credit facilities,
will be  sufficient  to meet  the  Company's  planned  capital  and  operational
requirements for at least the next 24 months.

Effects of Inflation

         Management does not believe that inflation has had a significant impact
on the Company's results of operations for the periods presented.

Forward Looking Statements

         This Form 10-K contains  certain  forward-looking  statements which may
involve  certain  risks  and  uncertainties.   The  actual  results  may  differ
materially from the results anticipated in these forward-looking statements as a
result of various risks and  uncertainties.  Potential  risks and  uncertainties
include  but are not limited to such  factors as the  strength  and  competitive
pricing of the RV industry,  changes in the  availability and pricing of credit,
demand for and  acceptance  of the  Company's  products,  the success of planned
marketing and  promotional  campaigns,  and other risks  identified in documents
filed by the Company with the Securities and Exchange Commission.

Item 8.  Financial Statements and Supplementary Data

         Financial  information required by this item is attached to this report
beginning on page F-1 and is incorporated herein by reference.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure.

         Not applicable

                                       24
<PAGE>

                                    PART III

Item 10.  Directors and Officers of the Registrant.

         The  information  required  for  this  Item  will be set  forth  in the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Stockholders
to be filed with the Securities and Exchange  Commission not later than 120 days
after December 31, 1997, which information is incorporated herein by reference.

Item 11.  Executive Compensation

         The  information  required  for  this  Item  will be set  forth  in the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Stockholders
to be filed with the Securities and Exchange  Commission not later than 120 days
after December 31, 1997, which information is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The  information  required  for  this  Item  will be set  forth  in the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Stockholders
to be filed with the Securities and Exchange  Commission not later than 120 days
after December 31, 1997, which information is incorporated herein by reference.

Item 13.  Certain Relationships and Related Party Transactions.

         The  information  required  for  this  Item  will be set  forth  in the
Company's definitive Proxy Statement for its 1998 Annual Meeting of Stockholders
to be filed with the Securities and Exchange  Commission not later than 120 days
after December 31, 1997, which information is incorporated herein by reference.

                                       25
<PAGE>

                                    PART IV

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

         (a)      List of Documents filed as part of this Report

               1. Financial Statements:

                  Report of Independent Accountants

                  Consolidated Balance Sheets at December 31, 1997 and 1996

                  Consolidated Statements  of  Operations  for  the  twelve
                                    months  ended  December  31,  1997 and 1996,
                                    seven  months ended  December 31, 1995,  and
                                    the fiscal year ended May 31, 1995

                  Consolidated Statements  of Cash  Flows  for  the  twelve
                                    months  ended  December  31,  1997 and 1996,
                                    seven  months ended  December 31, 1995,  and
                                    the fiscal year ended May 31, 1995

                  Consolidated Statements of  Stockholders'  Equity for the
                                    twelve months ended  December 31, 1997
                                    and 1996

                  Notes to Consolidated Financial Statements

                 2.  Financial Statement Schedules

                  Schedule VIII - Valuation and Qualifying Accounts

                  Schedule IX - Short-Term Borrowings

              3.    Exhibits

                  (b) Reports on Form 8-K:

                           None

Designation
of Exhibit                    Description of Exhibit

 3.1     The Company's Restated Certificate of Incorporation. (2)
 3.2     The Company's By-laws. (2)

                                       26
<PAGE>

 4.1     Specimen-Certificate of Common Stock. (1)
10.1     Loan Agreement, dated as of December 1, 1985, between NRV
         and The Industrial Development Authority of the County of
         Riverside (the "Authority"). (1)
10.2     Security  Agreement,  dated as of  December  1,  1985,  by and  among
         NRV,  the Authority  and Union  Bank.  (1)
10.3     Pledge  and  Security  Agreement,  dated as of December 1, 1985,
         between NRV and Union Bank. (1)
10.4     Employment Agreement, dated as of October 29, 1991, between NRV
         and Wayne Mertes. (1)
10.5     Amendment to  Employment  Agreement,  dated as of July 1, 1993,
         between NRV and Wayne Mertes. (1)
10.6     Agreement, dated October 4, 1988, between NRV and
         Ford Motor Company. (1)
10.7     Pool Company Wholesale Finance Plan Application for Wholesale
         Financing and Security Agreement, dated June 26, 1990, between
         NRV and Ford Motor Credit Company ("Ford Credit"). (1)
10.8     Continuing Guaranty of the Company for the benefit of Ford Credit. (1)
10.9     Inventory  Loan and  Security  Agreement,  dated  October  14,  1988,
         between NRV and  General  Motors  Acceptance Corporation ("GMAC"). (1)
10.10    Amendment to Inventory Loan and Security Agreement, effective as of
         November 19, 1991, between NRV and GMAC. (1)
10.11    Agreement, effective September 27, 1991, between NRV and Chevrolet
         Motor Division, General Motors Corporation. (1)
10.12    National R.V. Holdings, Inc. 1993 Stock Option Plan. (1)
10.13    Stock Purchase Agreement, dated as of October 11, 1991, by and
         among the Company, Wayne Mertes and Michael Butler. (1)
10.14    National R.V. Holdings, Inc. 1993 Option Plan. (2)
10.15    Second Amendment to Employment Agreement, dated May 23, 1993, between
         the Company and Wayne Mertes. (3)
10.16    First  Amendment to Loan  Agreement  between  Industrial  Development
         Authority of the County of Riverside and NRV dated February 1, 1995.(4)
10.17    First  Amendment to Letter of Credit and  Reimbursement  Agreement
         between NRV and Union Bank dated as of December 1, 1993. (4)
10.18    Ford Authorized Converter Pool Agreement dated June 12, 1990, between
         NRV and Ford Motor Company. (4)
10.19    First Amendment to Ford Authorized Converter Pool Agreement between NRV
         and Ford Motor Company effective July 1, 1990. (4)
10.20    Second Amendment to Ford Authorized Converter Pool Agreement between
         NRV and Ford Motor Company dated June 30, 1994. (4)
10.21    Motor Home  Manufacturers  Incentive  Agreement  dated June 30, 1994,
         between NRV and  Chevrolet  Motor  Division, General Motors
         Corporation. (4)

                                       27
<PAGE>

10.22    Addendum to Agreement for Wholesale Financing between NRV and ITT
         Commercial Finance Corp. dated July 8, 1993. (4)
10.23    Loan Agreement, dated as of December 1, 1995, between NRV and
         California Economic Development Financing Authority. (5)
10.24    Reimbursement Agreement, dated as of December 1, 1995, between NRV and
         Union Bank. (5)
10.25    Remarketing agreement, dated as of December 1, 1995, between NRV and
         Rauscher Pierce Refsnes, Inc. (5)
10.26    Tax Regulator Agreement, dated as of December 1, 1995, between NRV,
         the California Economic Development Financing Authority, and First
         Trust of California. (5)
10.27    Pledge and Security Agreement, dated as of December 1, 1995, between
         NRV and Union Bank. (5)
10.28    Security Agreement, dated as of December 1, 1995, between NRV and Union
         Bank. (5)
10.29    Second Construction Deed of Trust, Assignment of Rents, Security
         Agreement and Fixture Filing, dated as of December 1, 1995, between NRV
         and Chicago Title Insurance Company. (5)
10.30    Second Amendment to Ford Authorized Converter Pool Agreement, effective
         August 14, 1995 between the NRV and Ford Motor Company. (5)
10.31    1995 Stock Option Plan. (5)
10.32    Payment terms with Freightliner Custom Chassis Corporation. (5)
10.33    Third Amendment to Employment Agreement, dated October 31,1996, between
         the Company and Wayne M. Mertes. (7)
10.34    Rights Plan Agreement with Continental Stock Transfer & Trust
         Company. (6)
10.35    Employment Agreement dated November 6, 1996, between CCI and Robert B.
         Lee. (7)
10.36    1996 Stock Option Plan. (7)
10.37    Revolving Credit Agreement, dated as of July 28, 1997, between the
         Company and Union Bank of California, N.A.  (8)
10.38    Revolving Credit Agreement, dated as of July 28, 1997, among National
         R.V., Inc. and Country Coach, Inc. and Union Bank of California,
         N.A.  (8)
10.39    Letter Agreement, dated January 23, 1998, between the Company and 712
         Advisory Services, Inc.
10.40    1997 Stock Option Plan
10.41    Second  Amended and Restated  Agreement of Limited  Partnership
         Agreement of Dune Jet Services,  L.P.  dated as of July 9, 1997 between
         Dune Jet Services, Inc. and the Company.
21.1     List of Subsidiaries.
99       Forward Looking Statements - Incorporated by reference from Form 10-Q
         for the Quarter ended September 30, 1996.
---------------

                                       28
<PAGE>

(1)      Previously filed as an exhibit to the Company's  Registration Statement
         on Form S-1 filed on August 16, 1993 (File No.  33-67414) as amended by
         Amendment No. 1 thereto filed on September 22, 1993 and Amendment No. 2
         thereto filed on September 29, 1993.
(2)      Previously filed as an exhibit to the Company's  Registration Statement
         on Form S-1 filed on December 15, 1993 (File No. 33-72954).
(3)      Previously filed as an exhibit to the Company's  Registration
         Statement on Form S-1 filed on June 7, 1994 (File No. 33-79900).
(4)      Previously  filed as an  exhibit  to the  Company's  Form  10-K for the
         year  ended May 31,  1995  filed on August 28, 1995.
(5)      Previously  filed as an  exhibit to the  Company's  Form 10-K for the
         seven months ended December 31, 1995 filed on March 27, 1996.
(6)      Incorporated  by reference  from Form 8-A declared  effective on
         August 26, 1996.
(7)      Incorporated  by reference from the Company's Form 10-K for the year
         ended December 31, 1996.
(8)      Incorporated  by reference from the Company's Form 10-Q for the nine
         months ended September 30, 1997.

                                       29
<PAGE>

SIGNATURES

                  Pursuant  to the  requirements  of  Section 13 or 15(d) of the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                          NATIONAL R.V. HOLDINGS, INC.

Dated: March 27, 1998                       By  /s/ Wayne M. Mertes
                                              ---------------------
                                                Wayne M. Mertes,
                                                President and
                                                Chief Executive Officer

                  Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and on the dates indicated.

Signature                   Capacity in Which Signed              Date

/s/ Gary N. Siegler         Chairman of the Board              March 27, 1998
-----------------------
    Gary N. Siegler

/s/ Wayne M. Mertes         Chief Executive Officer            March 27, 1998
-----------------------     and Director (Principal
    Wayne M. Mertes         Executive Officer)

/s/ Robert B. Lee           Director                           March 27, 1998
-----------------------
    Robert B. Lee

/s/ Kenneth W. Ashley       Chief Financial Officer (Principal March 27, 1998
-----------------------     Accounting and Financial Officer)
    Kenneth W. Ashley

/s/ Stephen M. Davis        Director and Secretary             March 27, 1998
-----------------------
    Stephen M. Davis

/s/ Neil H. Koffler         Director and Assistant Secretary   March 27, 1998
-----------------------
    Neil H. Koffler

/s/ Doy B. Henley           Director                           March 27, 1998
-----------------------
    Doy B. Henley

/s/ Greg McCaffery          Director                           March 27, 1998
-----------------------
    Greg McCaffery

                                       30
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS



February 13, 1998

To the Board of Directors
and Shareholders of
National R.V. Holdings, Inc.

In our opinion,  the  accompanying  consolidated  balance  sheet and the related
consolidated  statements of income,  of  stockholders'  equity and of cash flows
present fairly,  in all material  respects,  the financial  position of National
R.V. Holdings,  Inc. and its subsidiaries at December 31, 1997 and 1996, and the
results of their  operations  and their  cash flows for each of the years  ended
December 31, 1997 and 1996,  the seven  months  ended  December 31, 1995 and the
year ended May 31,  1995,  in  conformity  with  generally  accepted  accounting
principles.  These financial  statements are the responsibility of the Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion  expressed
above.




/s/  Price Waterhouse LLP

Los Angeles, CA
















                                       F-1

                                       1
<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                              1997                   1996
                              ASSETS
Current assets:
<S>                                                                        <C>                     <C>
     Cash and cash equivalents                                             $ 3,542,000          $    819,000
     Receivables, less allowance for doubtful accounts
       ($180,000 and $177,000, respectively)                                11,388,000             5,522,000
     Inventories                                                            37,543,000            34,015,000
     Deferred income taxes                                                   2,741,000             1,384,000
     Prepaid expenses                                                        1,375,000             1,232,000
                                                                          ------------          ------------
       Total current assets                                                 56,589,000            42,972,000
Goodwill - net                                                               7,778,000             8,191,000
Restricted funds                                                                     -             1,210,000
Property, plant and equipment, net                                          19,817,000            15,542,000
Other                                                                        3,020,000               135,000
                                                                          ------------          ------------
                                                                          $ 87,204,000          $ 68,050,000
                                                                          ============          ============
               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Line of credit                                                       $          -          $  1,400,000
     Current portion of long-term debt                                         554,000               545,000
     Accounts payable                                                        9,006,000             7,736,000
     Accrued expenses                                                        7,758,000             3,738,000
                                                                          ------------          ------------
       Total current liabilities                                            17,318,000            13,419,000
Deferred income taxes                                                        2,225,000             1,827,000
Long-term debt                                                               6,703,000             7,272,000
Commitments and contingencies
Stockholders' equity:
     Preferred Stock, $.01 par value, 5,000 shares
       authorized 4,000 issued and outstanding                                       -                     -
     Common Stock, $.01 par value, 10,000,000 shares
       authorized                                                               63,000                62,000
     Additional paid-in capital                                             35,263,000            34,344,000
     Retained earnings                                                      25,632,000            11,126,000
                                                                          ------------          ------------
       Total stockholders' equity                                           60,958,000            45,532,000
                                                                          ------------          ------------
                                                                          $ 87,204,000          $ 68,050,000
                                                                          ============          ============
</TABLE>


                 See Notes to Consolidated Financial Statements





                                      F - 2

                                       2
<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.
                        CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
                                                                                                Seven Months           Year
                                                                      Year Ended                   Ended              Ended
                                                                     December 31,                December 31,         May 31,
                                                               1997               1996               1995              1995
<S>                                                        <C>                <C>               <C>                <C>
Net sales                                                  $285,951,000       $137,101,000      $ 53,062,000       $81,379,000
Cost of goods sold                                          245,763,000        118,643,000        46,864,000        70,459,000
                                                           ------------       ------------      ------------       -----------
     Gross profit                                            40,188,000         18,458,000         6,198,000        10,920,000
                                                           ------------       ------------      ------------       -----------
Selling expenses                                              9,518,000          4,209,000         1,586,000         2,399,000
General and administrative expenses                           5,649,000          2,899,000         1,233,000         2,243,000
Amortization of intangibles                                     413,000             80,000                 -                 -
                                                           ------------       ------------      ------------       -----------
     Total operating expenses                                15,580,000          7,188,000         2,819,000         4,642,000
                                                           ------------       ------------      ------------       -----------
     Operating income                                        24,608,000         11,270,000         3,379,000         6,278,000

Other expenses (income):
     Investment income                                         (113,000)          (246,000)         (248,000)         (669,000)
     Interest expense                                           335,000            357,000           233,000           661,000
     Other financing related costs                              113,000            149,000           136,000           109,000
                                                           ------------       ------------      ------------       -----------
       Total other expenses                                     335,000            260,000           121,000           101,000
                                                           ------------       ------------      ------------       -----------
     Income before income taxes and
       extraordinary items                                   24,273,000         11,010,000         3,258,000         6,177,000
Provision for income taxes                                    9,767,000          4,405,000         1,324,000         2,443,000
                                                           ------------       ------------      ------------       -----------
     Income before extraordinary items                       14,506,000          6,605,000         1,934,000         3,734,000

Extraordinary loss on investment in
     marketable equity securities, no tax effect                      -                  -                 -          (958,000)

Extraordinary gain on early extinguishment
     of debt, net of income taxes of $234,000                         -                  -           342,000                 -
                                                           ------------       ------------      ------------       -----------
     Net income                                            $ 14,506,000        $ 6,605,000       $ 2,276,000       $ 2,776,000
                                                           ============       ============      ============       ===========
Earnings per common share - basic
     Income before extraordinary items                           $ 2.32             $ 1.38            $ 0.42            $ 0.77
     Extraordinary items                                              -                  -              0.07             (0.20)
                                                           ------------       ------------      ------------       -----------
       Net income                                                $ 2.32             $ 1.38            $ 0.49            $ 0.57

Earnings per common share - diluted
     Income before extraordinary items                           $ 2.09             $ 1.26            $ 0.40            $ 0.74
     Extraordinary items                                              -                  -              0.07             (0.19)
                                                           ------------       ------------      ------------       -----------
       Net income                                                $ 2.09             $ 1.26            $ 0.47            $ 0.55

Weighted average number of shares:
     Basic                                                    6,243,049          4,793,335         4,609,953         4,860,422
                                                           ============       ============      ============       ===========
     Diluted                                                  6,926,426          5,258,069         4,867,236         5,028,707
                                                           ============       ============      ============       ===========
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      F-3

                                       3
<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                        Seven Months       Year
                                                                         Year Ended                        Ended           Ended
                                                                        December 31,                    December 31,       May 31,
                                                                  1997              1996                   1995              1995

Cash flows from operating activities:
<S>                                                              <C>               <C>                 <C>               <C>
     Net income                                                  $14,506,000       $ 6,605,000         $ 2,276,000       $2,776,000
        Adjustments to reconcile net income to
          net cash provided by operating activities,
          net of effect of acquisition:
        Depreciation                                               1,322,000           516,000             283,000          382,000
        Amortization of intangibles                                  413,000            80,000                   -                -
        Amortization of deferred financial income                          -                 -             (62,000)        (247,000)
        Loss on investment in marketable
          equity securities                                                -                 -                   -          958,000
        Gain on early extinguishment of debt                               -                 -            (576,000)               -
        (Increase) decrease in receivables                        (5,866,000)        2,567,000          (2,148,000)         (39,000)
        (Increase) decrease in inventories                        (3,528,000)       (6,249,000)            688,000       (2,909,000)
        (Increase) decrease in prepaid expenses                     (143,000)         (251,000)            128,000         (175,000)
        Increase (decrease) in accounts payable                    1,270,000        (1,421,000)            631,000       (3,669,000)
        Increase (decrease) in accrued expenses                    4,020,000            13,000            (116,000)        (116,000)
        (Decrease) increase in deferred income taxes                (959,000)         (350,000)            305,000          373,000
                                                                 -----------        ----------          ----------       ----------
          Net cash provided (used) by
             operating activities                                 11,035,000         1,510,000           1,409,000       (2,666,000)
Cash flows from investing activities:
     Proceeds from (investment in) marketable
        equity securities                                                  -                 -             134,000         (382,000)
     Payment for CCI acquisition costs                                     -          (437,000)                  -                -
     Increase in other assets                                     (2,885,000)
     Capital expenditures                                         (5,597,000)       (5,141,000)           (727,000)      (1,721,000)
                                                                 -----------        ----------          ----------       ----------
          Net cash used by investing activities                   (8,482,000)       (5,578,000)           (593,000)      (2,103,000)
Cash flows from financing activities:
     (Decrease) increase in line of credit                        (1,400,000)       (9,965,000)            900,000        1,000,000
     Net proceeds from restricted funds                            1,210,000         3,637,000           8,653,000 #              -
     Proceeds from revenue bonds                                           -                 -           5,000,000                -
     Repayments of obligations to previous owners                          -                 -         (13,500,000)               -
     Principal payments on long-term debt                           (560,000)         (160,000)            (64,000)         (77,000)
     Proceeds from issuance of common stock                        1,140,000        12,255,000             811,000           15,000
     Purchase of treasury stock                                     (220,000)         (953,000)         (2,851,000)      (4,144,000)
     Decrease in unsecured subordinated notes                              -                 -                   -          (11,000)
                                                                 -----------        ----------          ----------       ----------
          Net cash provided (used) by
            financing activities                                     170,000         4,814,000          (1,051,000)      (3,217,000)
                                                                 -----------        ----------          ----------       ----------
     Net increase (decrease) in cash                               2,723,000           746,000            (235,000)      (7,986,000)
     Cash, beginning of year                                         819,000            73,000             308,000        8,294,000
                                                                 -----------        ----------          ----------       ----------
     Cash, end of year                                           $ 3,542,000       $   819,000         $    73,000       $  308,000
                                                                 ===========        ==========          ==========       ==========
</TABLE>

                 See Notes to Consolidated Financial Statements



                                       F-4

                                       4
<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                             Preferred    Common Stock    Paid-In      Retained        Treasury Stock
                               Stock     Shares   Amount  Capital      Earnings     Shares       Amount            Total
<S>                          <C>       <C>       <C>      <C>          <C>          <C>          <C>            <C>
Balance, December 31, 1995   $ -       5,555,163 $56,000  $21,043,000  $ 4,521,000  (1,083,330)  $(6,995,000)   $18,625,000
 Common stock issued
   under option plan                      20,377       -       83,000                                                83,000
 Common stock issued
   upon exercise of warrants             352,933   3,000    1,282,000                                             1,285,000
 Purchase of treasury stock                                                            (95,370)     (953,000)      (953,000)
 Acquisition of CCI                                         5,643,000                  543,806     3,357,000      9,000,000
 Private placement of stock              265,106   3,000    6,293,000                  634,894     4,591,000     10,887,000
 Net income                                                              6,605,000                                6,605,000
                             ----      --------- -------  -----------  -----------   ---------    ----------    -----------
Balance, December 31, 1996   $ -       6,193,579 $62,000  $34,344,000  $11,126,000        -       $    -        $45,532,000
 Common stock issued
   under option plan                      36,454       -      183,000                                               183,000
 Common stock issued
   upon exercise of warrants              81,350   1,000      736,000                   12,400       220,000        957,000
 Purchase of treasury stock                                                            (12,400)     (220,000)      (220,000)
 Net income                                                             14,506,000                               14,506,000
                             ----      --------- -------  -----------  -----------   ---------    ----------    -----------
Balance, December 31, 1997   $ -       6,311,383 $63,000  $35,263,000  $25,632,000           -     $    -       $60,958,000
                             ====      ========= =======  ===========  ===========   =========    ==========    ===========
</TABLE>


                 See Notes to Consolidated Financial Statements



                                      F-5

                                       5
<PAGE>


                          NATIONAL R.V. HOLDINGS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Summary of Significant Accounting Policies

National R.V. Holdings,  Inc. (the Company)  manufactures  recreational vehicles
("RVs")  through its  wholly-owned  subsidiaries,  National R.V., Inc. (NRV) and
Country Coach,  Inc. (CCI). The RVs are marketed  primarily in the United States
by NRV under the Dolphin, Sea Breeze,  Tropi-Cal ,and Tradewinds brand names and
by CCI under brand names  including  Concept,  Affinity,  Magna,  Intrigue,  and
Allure.

The preparation of financial  statements in accordance with generally acceptable
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.  Actual
results  could  differ  from  those  estimates.  Management  believes  that  the
estimates included in the financial statements are reasonable based on the facts
and circumstances known to them at the time of preparation.

CONSOLIDATION

The  consolidated  financial  statements of the Company  include the accounts of
National  R.V  Holdings,  Inc.,  NRV,  and  CCI.  All  significant  intercompany
transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents  include deposits in banks and short-term  investments
with original maturities of three months or less.

INVENTORIES

Inventories  are  stated at the  lower of cost or  market,  with cost  generally
determined by the first-in, first-out (FIFO) method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost, less accumulated  depreciation.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets  ranging from 31 to 39 years for buildings and 5 to 7
years for machinery and equipment.

AMORTIZATION OF INTANGIBLE ASSETS

Goodwill   related  to  the  acquisition  of  CCI  is  being  amortized  on  the
straight-line basis over a twenty-year period.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development  expenses are charged to operations as incurred and are
included in cost of goods sold. Research and development expenses were $2,711000
and  $1,077,000  for the years ended  December 31, 1997 and 1996,  respectively,
$423,000  for the seven months  ended  December  31, 1995,  and $780,000 for the
fiscal year ended May 31, 1995.

INCOME TAXES

The Company  provides  for income taxes using an asset and  liability  approach.
Under this  method  deferred  tax  assets and  liabilities  are  computed  using
statutory  rates for the expected  future tax  consequences  of events that have
been recognized in the Company's financial statements or tax returns.



                                       F-6

                                       6
<PAGE>



1. (Continued)

INCOME PER SHARE

As of December 31, 1997 the Company adopted and applied  retroactively,  the new
accounting  standard for computing income per share. Under the new requirements,
historically reported "primary" and "fully diluted" earnings per share have been
replaced with "basic" and "diluted" earnings per share.

Basic  earnings  per share is based upon the weighted  average  number of common
shares outstanding during a period. Diluted earnings per share is based upon the
weighted average number of common shares plus the incremental dilutive effect of
the securities convertible to Common Stock.

The  following  is a  reconciliation  of the shares use to  determine  basic and
diluted EPS:
                                                  Seven Months    Year
                                Year Ended           Ended       Ended
                               December 31,       December 31,  May 31,
                              1997       1996         1995        1995
Shares used for basic      6,243,049   4,793,335   4,609,953    4,860,422
Dilutive effect of:
  Stock options              665,239     429,548     206,823      102,556
  Warrants                    18,138      35,186      50,460       21,252
  Convertible notes                                                44,477
                           ---------   ---------   ---------    ---------
Shares used for diluted    6,926,426   5,258,069   4,867,236    5,028,707
                           =========   =========   =========    =========


2. Acquisition

On November 6, 1996,  the Company  acquired  all shares of Capital  Stock of CCI
through the issuance of 543,806  shares of Common Stock valued at $9.0  million.
Net assets  acquired  included  the  assumption  of $10.1  million of debt.  The
acquisition of CCI was accounted for as a purchase and the results of operations
of CCI have been  included  since  the  acquisition  date.  The  purchase  price
resulted in recording goodwill of $8,191,000.

3.  Inventories

Inventories consisted of the following:

                               December 31,
                        1997                 1996
Finished goods      $ 10,751,000          $ 8,116,000
Work-in-process       12,769,000           11,000,000
Raw materials         11,747,000            7,987,000
Chassis                2,276,000            6,912,000
                    ------------         ------------
                    $ 37,543,000         $ 34,015,000
                    ============         ============













                                       F-7

                                       7
<PAGE>



4.  Property, Plant and Equipment

Major classes of property, plant and equipment consist of the following:

                                                      December 31,
                                               1997                 1996
Land                                       $ 3,310,000          $ 2,387,000
Construction in progress                             -            4,955,000
Buildings                                   11,825,000            5,853,000
Machinery and equipment                      7,501,000            4,852,000
Office equipment                             3,082,000            2,074,000
                                          ------------         ------------
                                            25,718,000           20,121,000
Less accumulated depreciation               (5,901,000)          (4,579,000)
                                          ------------         ------------
  Property, plant and equipment, net      $ 19,817,000         $ 15,542,000
                                          ============         ============


5.  Accrued Expenses

Accrued expenses consists of the following:

                                                        December 31,
                                                 1997                 1996
Workers' compensation self-insurance reserve $  402,000          $  347,000
Motorhome warranty reserve                    4,036,000           1,840,000
Payroll and other accrued expenses            3,320,000           1,551,000
                                             ----------          ----------
                                             $7,758,000          $3,738,000
                                             ==========          ==========

6.  Debt and Credit Agreements

Debt consists of the following:

                                                       December 31,
                                                 1997                 1996
Revolving credit agreements
 8.50%, expires 1999                        $        -           $1,400,000
Industrial revenue bonds
 5.10%, due 1998-2003                        1,888,000            2,034,000
 4.05%, due 1998-2020                        4,700,000            5,000,000
Other borrowings                               669,000              783,000
                                            -----------          ----------
                                             7,257,000            9,217,000
Less payments due within one year              554,000            1,945,000
                                            -----------          ----------
                                            $6,703,000           $7,272,000
                                            ===========          ==========

On July 28, 1997,  the Company and its  subsidiaries  entered into two separate,
revolving  credit  facilities   aggregating  $40  million  with  Union  Bank  of
California.  The  Company's  $20 million  credit  facility  will be available to
finance potential  acquisitions.  The Company's two  subsidiaries,  NRV and CCI,
jointly have a separate $20 million credit  facility which will be available for
general  corporate and working capital needs and capital  expenditures.  Amounts
borrowed under the credit facilities will bear interest at the Bank's prime rate
or at a LIBOR-based  rate. Both credit  facilities are secured by  substantially
all of the assets of the Company and its subsidiaries  and contain,  among other
provisions, certain financial covenants, including net worth and debt ratios.

NRV's buildings and property are pledged as collateral for the industrial
revenue bonds

Debt maturities over the next five years are $554,000 in 1998, $562,000 in 1999,
$571,000 in 2000, $581,000 in 2001 and $592,000 in 2002.

                                       F-8

                                       8
<PAGE>

7.  Income Taxes

The components of the provision for income taxes were as follows:

                                             December 31,              May 31,
                                    1997        1996        1995        1995
Currently Payable:
  Federal                        $8,765,000  $3,686,000  $  886,000  $1,829,000
  State                           1,954,000   1,048,000     372,000     519,000
                                 ----------   ---------   ---------   ---------
                                 10,719,000   4,734,000   1,258,000   2,348,000
Deferred:
  Federal                          (796,000)   (305,000)     63,000      63,000
  State                            (156,000)    (24,000)      3,000      32,000
                                 ----------   ---------   ---------   ---------
                                   (952,000)   (329,000)     66,000      95,000
                                 ----------   ---------   ---------   ---------
Total provision for income taxes $9,767,000  $4,405,000  $1,324,000  $2,443,000
                                 ==========  ==========   =========   =========

Deferred income taxes are recorded based upon differences  between the financial
statement and tax basis of assets and liabilities  and available  carryforwards.
Temporary  differences and carryforwards  which give rise to deferred income tax
assets and liabilities at December 31, 1997 and 1996 were as follows:

                                           December 31,
                                      1997                1996
Accrued expenses                  $2,357,000          $1,138,000
State income taxes                   384,000             246,000
                                  ----------          ----------
  Deferred income tax assets      $2,741,000          $1,384,000
                                  ==========          ==========
Fixed assets                      $1,697,000          $1,275,000
Other                                528,000             552,000
                                  ----------          ----------
  Deferred income tax liabilities $2,225,000          $1,827,000
                                  ==========          ==========

A reconciliation  of the statutory U.S. federal income tax rate to the Company's
effective income tax rate is as follows:

                                         December 31,    May 31,
                                     1997   1996   1995   1995
Statutory rate                      34.0%  34.0%  34.0%  34.0%
State taxes, net of federal benefit  4.8    6.1    6.2    5.9
Amortiztion of intangibles not
 deductible for income tax purposes  1.7    0.6
Other                               (0.3)   0.7)   0.5   (0.4)
                                    ----   ----   ----   ----
                                    40.2%  40.0%  40.7%  39.5%

Cash paid for income taxes was  $9,439,000  and  $4,971,000  for the years ended
December 31, 1997 and 1996,  respectively,  and  $1,285,000 for the seven months
ended December 31, 1995, and $2,031,000 for the fiscal year ended May 31, 1995.



                                       F-9

                                       9
<PAGE>

8.  Recourse on Dealer Financing

As is customary in the industry,  the Company generally agrees with its dealers'
lenders to repurchase any unsold RVs if the dealers become  insolvent within one
year of the purchase of such RVs. Although the total contingent  liability under
these agreements approximates $74,500,000 at December 31, 1997, as with accounts
receivable,  the risk of loss is spread over numerous dealers and lenders and is
further  reduced by the resale value of the coaches  which the Company  would be
required to repurchase.  Losses under these agreements have not been significant
in the past and management believes that any future losses under such agreements
will not have a significant  effect on the  consolidated  financial  position or
results of operations of the Company.

9.  Commitments and Contingencies

The  Company  is  involved  in  litigation  arising  in the  ordinary  course of
business.  In the opinion of management,  based in part on the advice of outside
counsel,  these matters will not have a material adverse effect on the Company's
financial position or results of operations.

The Company has commitments  under certain  non-cancelable  operating  leases as
follows:

     1998                      $ 1,577,000
     1999                        1,622,000
     2000                        1,463,000
     2001                           86,000
     2002                            8,000
                               -----------
                               $ 4,756,000
                               ===========

10.  Stockholders' Equity

On August 20,  1996,  the  Company's  Board of Directors  adopted a  Shareholder
Rights Plan. Pursuant to the Plan, the Company declared a dividend to be made to
stockholders  of  record on  September  4,  1996 of one  Series B  Participating
Preferred  Share  Purchase  right for each  outstanding  share of the  Company's
Common  Stock.  No rights will be  distributed  until a purchaser  acquires,  or
announces  its  intent  or  attempts  to  acquire,  at least 15  percent  of the
Company's Common Stock.

At December  31,  1997,  there were 62,501  warrants  outstanding  to  financial
advisors and  consultants  at prices  ranging  from $9.33 to $16.09.  Expiration
dates range from August 31, 1999 to December 1, 2001.

11.  Stock Options

The Company has five fixed option plans which reserve shares of common stock for
issuance to executives, key employees and directors. The Company has also issued
fixed  options  outside  of such  plans  pursuant  to  individual  stock  option
agreements.  Options  granted to  non-employee  and  employee  directors  vested
immediately  upon grant and  generally  expire ten years from the date of grant.
Options granted to employees vest in three equal annual  installments and expire
five years from the date of grant.  The price of the options granted pursuant to
these plans will not be less than 100 percent of the market  value of the shares
on the date of grant.

No  compensation  cost has been  recognized  for the stock  option  plans in the
financial statements. Had compensation cost for the Company's stock option plans
and individual  option agreements been determined based on the fair value rather
than market value at the grant date for awards under those plans and  agreements
during 1996 and 1997, the Company's net income and earnings per share would have
been reduced to the pro forma amounts indicated below:


                                      F-10

                                       10
<PAGE>

11. (Continued)

                                                      Year Ended December 31,
                                                      1997              1996
Net income                  As reported           $ 14,506,000      $ 6,605,000
                            Pro forma             $ 11,040,000      $ 4,672,000

Basic earnings per share    As reported                 $ 2.32           $ 1.38
                            Pro forma                   $ 1.77           $ 0.97

Diluted earnings per share  As reported                 $ 2.09           $ 1.26
                            Pro forma                   $ 1.59           $ 0.89

Shares
Basic                                                6,243,049        4,793,335
Weighted                                             6,927,713        5,258,069


The fair value of each option  granted is  estimated  on the date of grant using
the  Cox   Rubinstein   binomial   option-pricing   model  with  the   following
weighted-average  assumptions  used for grants:  1997 and 1996 dividend yield of
0.0%; expected volatility of 50.8% in 1997 and 51.1% in 1996; risk-free interest
rate  ranging  from  6.38%  to 6.49% in 1997  and  5.875%  to 6.5% in 1996;  and
expected lives ranging from 5 to 10 years.

Information regarding these option plans and option agreements for 1997 and 1996
is as follows:

                                                          Weighted
                                                          Average
                                                   1997   Exercise        1996
                                                 Shares   Price          Shares
Outstanding, beginning of year                 1,232,228  $  8.757      805,625
Exercised                                        (36,454)    4.682      (20,397)
Granted                                          600,000    15.125      447,000
Outstanding, end of year                       1,795,774  $ 10.967    1,232,228
Option price range at end of year         $4.00 to 15.63         $4.00 to 15.63
Option price range for exercised shares    $4.00 to 6.92          $4.00 to 5.00
Options available for grant at end of  year       79,349                 79,349
Weighted-average fair value of options
  granted during year                            $ 9.266                $ 6.359


The following  table  summarizes  information  about  fixed-price  stock options
outstanding at December 31, 1997:

                                                     Average   Weighted
Grant                         Options     Options   Exercise  Remaining
Date             Authorized Outstanding Exercisable  Price   Life (Years)
9/20/93            300,000    211,649    211,649     4.000       5.4
12/3/93            232,500    147,300    147,300     6.920       5.3
12/30/94           129,375    124,075    124,075     5.000       6.1
9/28/95            150,000    136,000     90,000     5.625       6.5
10/2/1996-11/06/96 450,000    422,000    140,667    14.760       5.9
6/4/97             600,000    600,000          -    15.125       7.7
All others         157,750    157,750    132,083     8.398       5.1






                                      F-11

                                       11
<PAGE>

12.    Related Party Transactions


The Company  has a  financial  advisory  agreement  dated  January 23, 1998 (the
"Advisory  Agreement")  with 712 Advisory  Services,  Inc.,  an  affiliate  (the
"Affiliate")  of the Chairman of the Company,  Mr. Gary N. Siegler.  Mr. Neil H.
Koffler,  a director  of the  Company,  is also an  employee  of the  Affiliate.
Pursuant to the Advisory  Agreement,  the Affiliate has agreed to provide advice
and  consultation  concerning  financial and related matters,  including,  among
other   things,   with  respect  to  private   financings,   public   offerings,
acquisitions,  commercial  banking  relations and other business  ventures.  The
Advisory  Agreement  has  an  initial  term  ending  December  31,  1998  and is
automatically  renewable for additional  periods of one year unless either party
elects to terminate prior to the conclusion of any year. The Advisory  Agreement
provides  that the  Affiliate  shall be paid  fees at the rate of  $230,625  per
annum.  In the event of certain  "changes  of  control"  events  relating to the
Company,  the Affiliate is entitled to immediate payment of the remaining unpaid
annual fee through the end of the  calendar  year in which the change of control
occurs.  Fees paid under a prior advisory  agreement between the Company and the
Affiliate  totaled $220,000 and $150,000 for the fiscal years ended December 31,
1997 and 1996,  respectively,  $75,000 for the seven months  ended  December 31,
1995 and $150,000 for the fiscal year ended  December 31, 1995.  In addition,  a
Chairman's  salary and bonus of $190,000 in the  aggregate  were  payable to Mr.
Siegler for the year ended  December 31, 1997 and $180,000 in the  aggregate was
paid for the year ended December 31, 1996.  During 1996, an additional  $385,000
was paid to the Affiliate for financial advisory services rendered in connection
with the Company's acquisition of CCI.


In  September  1997,  the  Company  acquired,   for  $2.75  million,  a  limited
partnership interest in Dune Jet Services, L.P. (the "Partnership"),  a Delaware
limited  partnership  formed for the  purposes of  acquiring  and  operating  an
airplane for the partners'  business uses and for  third-party  charter  flights
(the  "Aircraft").  The general partner of the Partnership is Dune Jet Services,
Inc. ("DJ Services"),  a Delaware corporation,  the sole stockholder of which is
the Company's Chairman,  Mr. Siegler. DJ Services  contributed $1.55 million for
its general partnership  interest and an additional $3.25 million for a separate
limited  partnership  interest.  The Aircraft has been  partially  financed by a
$4.25 million loan from a third party financing  source,  the repayment of which
loan is personally  guaranteed  by Mr.  Siegler.  Pursuant to the  Partnership's
limited  partnership  agreement and operating agreement terms, the Company, as a
limited partner, has the right to use the Aircraft for business purposes for its
pro rata share of 800 hours per year, at a rate modestly above the variable cost
of operating the Aircraft.  Hours not used by the partners will be available for
charter  flights at market  rates.  Profits  and losses of the  Partnership  are
generally  allocated  in  accordance  with  the  partners'   respective  capital
contributions, except that depreciation is allocated to the general partner, and
distributions to the partners will be made in the same ratios as the allocations
of profits and losses.  Pursuant to the  partnership  agreement,  DJ Services is
entitled to reimbursement for expenses and indemnification  from the Partnership
for acting in its  capacity as general  partner.  Other than the purchase of its
partnership interest, the Company has made no other payments with respect to the
Partnership.


Mr.  Robert B.  Lee,  a  director  of the  Company  and the  Chairman  and Chief
Executive  Officer of CCI, is a partner in two joint  ventures which are parties
to lease  agreements  with  the  Company's  CCI  subsidiary.  Pursuant  to these
agreements,  CCI  leases  from  the  joint  ventures  two  parcels  of  property
constituting  CCI's  entire  manufacturing  facilities.  During  the year  ended
December 31, 1997, the Company paid $1,486,000 under such lease agreements.  The
lease  agreements call for future payments of $1,543,000  annually,  adjusted 3%
annually for inflation, through 2001.


Werbel & Carnelutti, a law firm in which Mr. Stephen M. Davis, the Secretary and
a director  of the  Company,  is a partner,  performed  legal  services  for the
Company during the year ended December 31, 1997.

                                      F-12

                                       12
<PAGE>

                       NATIONAL R.V. HOLDINGS, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
              For the years ended December 31, 1997, 1996 and 1995

                                                  Additions
                                      Balance at charged to           Balance at
                                      beginning    costs                end of
                                      of period and expenses Deductions Period
Twelve months ended December 31, 1997
  Allowance for doubtful accounts    $  177,000 $   12,842 $    9,842 $  180,000
  Workers' compensation self-insurance  347,000  1,087,921  1,032,921    402,000
  Motorhome warranty reserve          1,840,000  8,004,383  5,808,383  4,036,000
                                     ---------- ---------- ---------- ----------
                                     $2,364,000 $9,105,146 $6,851,146 $4,618,000

Twelve months ended December 31, 1996
  Allowance for doubtful accounts    $   40,000 $  206,520 $   69,520 $  177,000
  Workers' compensation self-insurance  317,000    793,300    763,300    347,000
  Motorhome warranty reserve            445,000  2,062,084    667,084  1,840,000
                                     ---------- ---------- ---------- ----------
                                     $  802,000 $3,061,904 $1,499,904 $2,364,000

Seven months ended December 31, 1995
  Allowance for doubtful accounts    $   40,000 $        - $        - $   40,000
  Workers' compensation self-insurance  314,000    333,448    330,448    317,000
  Motorhome warranty reserve            342,000    763,629    660,629    445,000
                                     ---------- ---------- ---------- ----------
                                     $  696,000 $1,097,077 $  991,077 $  802,000






                                      F-13

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<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.
                              SHORT-TERM BORROWINGS

                                                Maximum      Average  Weighted
                                                amount       amount    average
                         Balance  Interest outstanding outstanding interest rate
Category of aggregate   at end of rate end   during the  during the during the
short-term borrowings     period  of period   period     period (1) period (2)
Twelve months ended
  December 31, 1997
 Line of credit with
   financial institution         -   8.50%    $4,330,000  $923,957     8.40%
Twelve months ended
  December 31, 1996
 Line of credit with
  financial institution  $1,400,000  8.25%    $9,500,000        -      8.30%
Seven months ended
  December 31, 1995
 Line of credit with
  financial institution  $1,900,000  8.50%    $1,900,000  $485,714     8.75%

__________
(1) The average amount outstanding during the period was computed by dividing
    the total of the month-end outstanding principal balances by 12.
(2) Average interest rate calculated using interest rates at the beginning and
    end of the period.







                                      F-14

                                       14
<PAGE>