<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                     --------------------------------------
                                    FORM 10-K

    [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
                     For the fiscal year ended January 1, 2000
                                       OR
    [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 For the transition period from ___________ to
        ___________

                         Commission File Number: 1-14725
                     --------------------------------------
                            MONACO COACH CORPORATION
             (Exact Name of Registrant as specified in its charter)


              DELAWARE                                   35-1880244
   (State or other jurisdiction of            (I.R.S. Employer Identification
    incorporation or organization)                          No.)

                              91320 INDUSTRIAL WAY
                              COBURG, OREGON 97408
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (541) 686-8011
                     --------------------------------------

           Securities registered pursuant to Section 12(b) of the Act:
        Title of each class:                                 Name of
                                             each exchange on which registered:
    Common Stock, par value $.01 per share                       New York Stock
                                                                       Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                               None
                     --------------------------------------

  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 ninety 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 the Registrant's knowledge, in definite proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K

  The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing sale price of the Common Stock on
March 24, 2000 as reported on the New York Stock Exchange, was approximately
$301.1 million. Shares of Common Stock held by officers and directors and
their affiliated entities have been excluded in that such persons may be
deemed to be affiliates. This determination of affiliate status is not
necessarily conclusive for other purposes.

      As of March 24, 2000, the Registrant had 18,893,397 shares of Common
                              Stock outstanding.
                    --------------------------------------

                    DOCUMENTS INCORPORATED BY REFERENCE

The Registrant's definitive Proxy Statement for its Annual Meeting of
Stockholders to be held on May 18, 2000 (the "Proxy Statement") is
incorporated by reference in Part III of this Form 10-K to the extent stated
therein.
                     --------------------------------------

This document consists of 48 pages.  The Exhibit Index appears at page 48 .


                                                                               1
<PAGE>

                                      INDEX
<TABLE>
<CAPTION>
                                      PART I
        <S>           <C>                                                                            <C>
        ITEM 1.       BUSINESS                                                                        3
        ITEM 2.       PROPERTIES                                                                     11
        ITEM 3.       LEGAL PROCEEDINGS                                                              11
        ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                            12

                                     PART II

        ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON STOCK AND
                           RELATED STOCKHOLDER MATTERS                                               12
        ITEM 6.       SELECTED FINANCIAL DATA                                                        13
        ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                             15
        ITEM 7A.           QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                      ABOUT MARKET RISK                                              21
        ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                    22
        ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                           ACCOUNTING AND FINANCIAL DISCLOSURE                                       42

                                    PART III

        ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT                                 43
        ITEM 11.      EXECUTIVE COMPENSATION                                                         43
        ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT                                                          43
        ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                 43

                                     PART IV

        ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
                      REPORTS ON FORM 8-K                                                            44

        SIGNATURES                                                                                   46
</TABLE>


                                                                               2
<PAGE>

                                     PART I

        This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include without
limitation those below marked with an asterisk (*). In addition, the Company
may from time to time make oral forward-looking statements through statements
that include the words "believes", "expects", "anticipates" or similar
expressions. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements of the Company to differ materially from those expressed or
implied by such forward-looking statements, including those set forth below
under "Factors That May Affect Future Operating Results" and "Impact of the
Year 2000 Issue" within Management's Discussion and Analysis of Financial
Condition and Results of Operations. The Company cautions the reader,
however, that these factors may not be exhaustive.

ITEM 1.  BUSINESS(1)

        Monaco Coach Corporation (the "Company") is a leading manufacturer of
premium Class A motor coaches and towable recreational vehicles. The
Company's product line consists of sixteen models of motor coaches and nine
models of towables (fifth wheel trailers and travel trailers) under the
"Monaco", "Holiday Rambler", "Royale Coach", and "McKenzie Towables" brand
names. The Company's products, which are typically priced at the high end of
their respective product categories, range in suggested retail price from
$70,000 to $900,000 for motor coaches and from $18,000 to $65,000 for
towables. Based upon retail registrations in 1999, the Company believes it
had a 23.6% share of the market for diesel Class A motor coaches, a 7.7%
share of the market for mid-to-high end fifth wheel trailers (units with
retail prices above $22,000) and a 29.0% share of the market for mid-to-high
end travel trailers (units with retail prices above $18,000). The Company's
products are sold through an extensive network of 294 dealerships located
primarily in the United States and Canada.

        The Company is the successor to a company formed in 1968 (the
"Predecessor") and commenced operations on March 5, 1993 by acquiring all the
assets and liabilities of its predecessor company (the "Predecessor
Acquisition").

        Prior to March 1996, the Company's product line consisted exclusively
of High-Line Class A motor coaches. In March 1996, the Company acquired the
Holiday Rambler Division of Harley-Davidson, Inc. ("Holiday Rambler"), a
manufacturer of a full line of Class A motor coaches and towables (the
"Holiday Acquisition"). The Holiday Acquisition: (i) more than doubled the
Company's net sales; (ii) provided the Company with a significantly broader
range of products, including complementary High-Line Class A motor coaches
and the Company's first product offerings of fifth wheel trailers, travel
trailers and entry-level to mid-range motor coaches; and (iii) lowered the
price threshold for first-time buyers of the Company's products, thus making
them more affordable for a significantly larger base of potential customers.
The Company believes that developing relationships with a broader base of
first-time buyers, coupled with the Company's strong emphasis on quality,
customer service and design innovation, will foster brand loyalty and
increase the likelihood that, over time, more customers will trade-up through
the Company's line of products. Attracting larger numbers of first-time
buyers is important to the Company because of the Company's belief that many
recreational vehicle customers purchase multiple recreational vehicles during
their lifetime.

PRODUCTS

        The Company currently manufactures sixteen motor coach and nine
towable models, each of which has distinct features and attributes designed
to target the model to a particular suggested retail price range. The
Company's product offerings currently target three segments of the
recreational vehicle market: Class A motor

-------------------------------------------------------------------------------
(1) A discussion of the following items can be found in the consolidated
financial statements and the notes to the consolidated financial statements
instead of in this Item 1: (a) revenue, profit and total assets for the
fiscal years 1997, 1998 and 1999; and (b) research and development costs.


                                                                              3
<PAGE>

coaches, fifth wheel trailers and travel trailers. The Company does not
currently compete in any other segment of the recreational vehicle industry.
During the third quarter of 1999, the Company introduced the Monarch, a new
gasoline powered model under the Monaco brand name. In December 1999, the
Company introduced two low-end diesel motor coaches, the Knight, under the
Monaco label, and the Admiral, under the Holiday Rambler brand. All three of
these products were designed to bring customers into the Company's line of
products at a lower price point giving the Company the opportunity to benefit
as these customers trade-up through the Company's line of products. The
following table highlights the Company's product offerings as of January 1,
2000:

                             COMPANY MOTOR COACH PRODUCTS

<TABLE>
<CAPTION>
                                     CURRENT SUGGESTED RETAIL
MODEL                                PRICE RANGE                   BRAND
-----------------------------------  ---------------------------   --------------------
<S>                                  <C>                           <C>
Royale Coach......................   $550,000-$900,000             Monaco

Signature Series..................   $380,000-$425,000             Monaco

Executive.........................   $265,000-$340,000             Monaco

Navigator.........................   $265,000-$340,000             Holiday Rambler

Dynasty...........................   $215,000-$265,000             Monaco

Imperial..........................   $215,000-$240,000             Holiday Rambler

Windsor...........................   $175,000-$215,000             Monaco

Endeavor-Diesel...................   $140,000-$165,000             Holiday Rambler

Diplomat..........................   $140,000-$150,000             Monaco

Knight............................   $115,000-$130,000             Monaco

Ambassador........................   $115,000-$130,000             Holiday Rambler

Endeavor-Gasoline.................   $ 85,000-$105,000             Holiday Rambler

Vacationer........................   $ 75,000-$ 95,000             Holiday Rambler

LaPalma...........................   $ 75,000-$ 95,000             Monaco

Admiral...........................   $ 70,000-$ 90,000             Holiday Rambler

Monarch...........................   $ 70,000-$ 90,000             Monaco
</TABLE>


                               COMPANY TOWABLE PRODUCTS

<TABLE>
<CAPTION>

                                     CURRENT SUGGESTED RETAIL
MODEL                                PRICE RANGE                  BRAND
----------------------------------   ---------------------------  ---------------------
<S>                                  <C>                          <C>
Imperial Fifth Wheel.............    $ 50,000-$ 70,000            Holiday Rambler

Grand Medallion Fifth Wheel......    $ 55,000-$ 65,000            McKenzie

Aluma-Lite Fifth Wheel...........    $ 35,000-$ 50,000            Holiday Rambler

Medallion Fifth Wheel............    $ 35,000-$ 50,000            McKenzie

Lakota Fifth Wheel...............    $ 25,000-$ 35,000            McKenzie

Alumascape Fifth Wheel...........    $ 22,000-$ 32,000            Holiday Rambler

Aluma-Lite Travel Trailer........    $ 25,000-$ 35,000            Holiday Rambler

Medallion Travel Trailer.........    $ 22,000-$ 32,000            McKenzie

Alumascape Travel Trailer........    $ 18,000-$ 25,000            Holiday Rambler
</TABLE>


        In 1999, the average unit wholesale selling prices of the Company's
motor coaches, fifth wheel trailers and travel trailers were approximately
$113,700, $27,500 and $20,300, respectively.

        The Company's recreational vehicles are designed to offer all the
comforts of home within a 190 to 400 square foot area. Accordingly, the
interior of the recreational vehicle is designed to maximize use of available
space. The Company's products are designed with five general areas, all of
which are smoothly integrated to form comfortable and practical mobile
accommodations. The five areas are the living room, kitchen, dining room,
bathroom and bedroom. For each model, the Company offers a variety of
interior layouts.

        Each of the Company's recreational vehicles comes fully equipped with
a wide range of kitchen and


                                                                             4
<PAGE>

bathroom appliances, audio and visual electronics, communication devices, and
other amenities, including couches, dining tables, closets and storage
spaces. All of the Company's recreational vehicles incorporate products from
well-recognized suppliers, including: stereos, CD and cassette players,
VCR's, DVD's and televisions from Quasar, Bose, Panasonic and Sony; microwave
ovens from Sharp, Magic Chef, and General Electric; stoves and ranges from
KitchenAid and Modern Maid; engines from Cummins; transmissions from Allison;
and chassis from Ford and Workhorse. The Company's high end products offer
top-of-the-line amenities, including 25" Sony stereo televisions, GPS systems
from Carin, fully automatic DSS (satellite) systems, Corian and Wilsonart
solid surface kitchen and bath countertops, imported ceramic tile and leather
furniture, and Ralph Lauren and Martha Stewart fabrics.

PRODUCT DESIGN

        To address changing consumer preferences, the Company modifies and
improves its products each model year and typically redesigns each model
every three or four years. The Company's designers work with the Company's
marketing, manufacturing and service departments to design a product that is
appealing to consumers, practical to manufacture and easy to service. The
designers try to maximize the quality and value of each model at the
strategic retail price point for that model. The marketing and sales staffs
suggest features or characteristics that they believe could be integrated
into the various models to differentiate the Company's products from those of
its competitors. By working with manufacturing personnel, the Company's
product designers engineer the recreational vehicles so that they can be
built efficiently and with high quality. Service personnel suggest ideas to
improve the serviceability and reliability of the Company's products and give
the designers feedback on the Company's past designs.

        The exteriors of the Company's recreational vehicles are designed to
be aesthetically appealing to consumers, aerodynamic in shape for fuel
efficiency and practical to manufacture. The Company has an experienced team
of computer-aided design personnel to complete the product design and produce
prints from which the products will be manufactured.

SALES AND MARKETING

        DEALERS

        The Company expanded its dealer network over the past year from 263
dealerships at the beginning of 1999 to 294 dealerships primarily located in
the United States and Canada at January 1, 2000. The Company's dealerships
generally sell either Monaco motor coaches, the McKenzie Towables line, or
Holiday Rambler motor coaches and towables. The Company intends to continue
to expand its dealer network, primarily by adding additional motorized
dealers to carry the Company's new lower priced gas and diesel units as well
as towables-only dealers to carry the McKenzie Towables line.* The Company
maintains an internal sales organization consisting of 43 account executives
who service the Company's dealer network.

        The Company analyzes and selects new dealers on the basis of such
criteria as location, marketing ability, sales history, financial strength
and the capability of the dealer's repair services. The Company provides its
dealers with a wide variety of support services, including advertising
subsidies and technical training, and offers certain model pricing discounts
to dealers who exceed wholesale purchase volume milestones. The Company's
sales staff is also available to educate dealers about the characteristics
and advantages of the Company's recreational vehicles compared with competing
products. The Company offers dealers geographic exclusivity to carry a
particular model. While the Company's dealership contracts have renewable one
or two-year terms, historically the Company's dealer turnover rate has been
low.

        Dealers typically finance their inventory through revolving credit
facilities established with asset-based lending institutions, including
specialized finance companies and banks. It is industry practice that such
"floor plan" lenders require recreational vehicle manufacturers to agree to
repurchase (for a period of 12 to 18 months from the date of the dealer's
purchase) motor coaches and towables previously sold to the dealer in the
event the dealer defaults on its financing agreements. The Company's
contingent obligations under these repurchase agreements are reduced by the
proceeds received upon the sale of any repurchased units. See "Management's


                                                                             5
<PAGE>

Discussion and Analysis of Financial Conditions and Results of Operations--
Liquidity and Capital Resources", and Note 17 of Notes to the Company's
Consolidated Financial Statements.

        ADVERTISING AND PROMOTION

        The Company advertises regularly in trade journals and magazines,
participates in cooperative advertising programs with its dealers, and produces
color brochures depicting its models' performance features and amenities. The
Company also promotes its products with direct incentive programs to dealer
sales personnel linked to sales of particular models.

        A critical marketing activity for the Company is its participation in
the more than 150 recreational vehicle trade shows and rallies each year.
National trade shows and rallies, which can attract as many as 40,000 attendees,
are an integral part of the Company's marketing process because they enable
dealers and potential retail customers to compare and contrast all the products
offered by the major recreational vehicle manufacturers. Setting up attractive
display areas at major trade shows to highlight the newest design innovations
and product features of its products is critical to the Company's success in
attracting and maintaining its dealer network and in generating enthusiasm at
the retail customer level. The Company also provides complimentary service for
minor repairs to its customers at several rallies and trade shows.

        The Company attempts to encourage and reinforce customer loyalty through
clubs for the owners of its products so that they may share experiences and
communicate with each other. The Company's clubs currently have more than 15,000
members. The Company publishes magazines to enhance its relations with these
clubs and holds rallies for clubs to meet periodically to view the Company's new
models and obtain maintenance and service guidance. Attendance at
Company-sponsored rallies can be as high as 1,800 recreational vehicles. The
Company frequently receives support from its dealers and suppliers to host these
rallies.

        The Company's web site also offers an extensive listing of the Company's
models, floor plans, and features, including "virtual tours" of some models. A
dealer locator feature identifies for customers the closest dealers to their
location for the model(s) they are interested in purchasing. The Company's web
site also provides information for upcoming rallies and club functions as well
as links to other R.V. Lifestyle web sites of interest to existing or potential
customers.

CUSTOMER SERVICE

        The Company believes that customer satisfaction is vitally important in
the recreational vehicle market because of the large number of repeat customers
and the rapid communication of business reputations among recreational vehicle
enthusiasts. The Company also believes that service is an integral part of the
total product the Company delivers and that responsive and professional customer
service is consistent with the premium image the Company strives to convey in
the marketplace.

        The Company offers a warranty to all purchasers of its new vehicles. The
Company's current warranty covers its products for up to one year (or 24,000
miles, whichever occurs first) from the date of retail sale (five years for the
front and sidewall frame structure). In addition, customers are protected by the
warranties of major component suppliers such as those of Cummins Engine Company,
Inc. ("Cummins") (diesel engines), Spicer Heavy Axle & Brake Division of Dana
Corporation ("Dana") (axles), Allison Transmission Division of General Motors
Corporation ("Allison") (transmissions), Workhorse (chassis), Ford Motor Company
("Ford") and Freightliner Custom Chassis Corporation ("Freightliner") (chassis).
The Company's warranty covers all manufacturing-related problems and parts and
system failures, regardless of whether the repair is made at a Company facility
or by one of the Company's dealers or authorized service centers. As of January
1, 2000, the Company had 294 dealerships providing service to owners of the
Company's products. In addition, owners of the Company's diesel products have
access to the entire Cummins dealer network, which includes over 2,000 repair
centers.

        The Company operates service centers in Coburg and Springfield, Oregon
and Elkhart and Wakarusa, Indiana. The Company had approximately 332 employees
in customer service at January 1, 2000. The Company

                                                                              6
<PAGE>

maintains individualized production records and a computerized warranty
tracking system which enable the Company's service personnel to identify
problems quickly and to provide individualized customer service. While many
problems can be resolved on the telephone, the customer may be referred to a
nearby dealer or service center. The Company believes that dedicated customer
service phone lines are an ideal way to interact directly with the Company's
customers and to quickly address their technical problems.

         The Company has expanded its on-line dealer support network to assist
its service personnel and dealers in providing better service to the Company's
customers. Service personnel and dealerships are able to access information
relating to specific models and sales orders, file warranty claims and track
their status, and view the status of existing parts orders. The Company is
currently in the process of expanding its on-line dealer support network to
include the ability of service personnel at dealerships to order parts through
an electronic parts catalog.

MANUFACTURING

        The Company currently operates motorized manufacturing facilities in
Coburg, Oregon, where it manufactures Signature Series, Executive, Dynasty,
Navigator, Knight, Ambassador, and LaPalma motor coaches and in Wakarusa,
Indiana, where it manufactures Imperial, Endeavor, Vacationer, Dynasty,
Diplomat, La Palma, Admiral and Windsor motor coaches. The Company's towable
manufacturing facilities are in Elkhart, Indiana, where it manufactures Holiday
Rambler fifth wheel and travel trailers, and Coburg, Oregon, where it
manufactures McKenzie fifth wheel and travel trailers. The Company also operates
its Royale Coach bus conversion facility in Elkhart, Indiana.

        The Company completed an upgrade and expansion of its Coburg motorized
facility in the third quarter of 1999 to allow increased production of its
current mix of products as well as new capacity to build its low-end diesel and
gasoline powered motor coaches. The Company is currently in the process of
expanding its diesel chassis capacity in Elkhart, which will increase the
Company's ability to build diesel powered coaches in Wakarusa. The Company
believes this expansion will be completed by the second quarter of 2000.* The
Company's motor coach production capacity at the end of 1999 was 14 units per
day at its Coburg facility and 25 units per day at its Wakarusa facility. The
Company believes that this expanded manufacturing capacity will free the Company
from capacity constraints on its motor coaches and allow the Company to
gradually increase its overall production volumes for motor coaches, consistent
with anticipated market demand.*

        In the fourth quarter of 1999 the Company moved its McKenzie towable
operation into the newly completed production facilty in Coburg. The company's
current towables production capacity is a combined 22 units per day at its
Coburg and Elkhart facilities.

        The Company believes that its manufacturing process is one of the most
vertically integrated in the recreational vehicle industry. By manufacturing a
variety of items, including the Roadmaster semi-monocoque diesel chassis,
plastic components, some of its cabinetry and fiberglass parts, as well as many
subcomponents, the Company maintains increased control over scheduling,
component production and overall product quality. In addition, vertical
integration enables the Company to be more responsive to market dynamics.

        Each facility has several stations for manufacturing, organized into
four broad categories: chassis manufacturing, body manufacturing, painting and
finishing. It takes from two weeks to two months to build each unit, depending
on the product. The Company keeps a detailed log book during the manufacture of
each product and inputs key information into its computerized service tracking
system.

        Each unit is given an inspection during which its appliances and
plumbing systems are thoroughly tested. As a final quality control check, each
motor coach is given a road test. To further ensure both dealer and end-user
satisfaction, the Company pays a unit fee per recreational vehicle to its
dealers so that they will thoroughly inspect each product upon delivery and
return a detailed report form.

        The Company purchases raw materials, parts, subcomponents, electronic
systems, and appliances from approximately 750 vendors. These items are either
directly mounted in the vehicle or are utilized in subassemblies which the
Company assembles before installation in the vehicle. The Company attempts to
minimize its level of inventory by ordering most parts as it needs them. Certain
key components that require longer purchasing lead

                                                                              7
<PAGE>

times are ordered based on planned needs. Examples of these components are
diesel engines, axles, transmissions, chassis and interior designer fabrics.
The Company has a variety of major suppliers, including Allison, Workhorse,
Cummins, Dana, Ford and Freightliner. The Company does not have any long-term
supply contracts with these suppliers or their distributors, but believes it
has good relationships with them. To minimize the risks associated with
reliance on a single-source supplier, the Company typically keeps a 60-day
supply of axles, engines, chassis and transmissions in stock or available at
the suppliers' facilities and believes that, in an emergency, other suppliers
could fill the Company's needs on an interim basis.* In 1997, Allison put all
chassis manufacturers on allocation with respect to one of the transmissions
the Company uses, and in 1999 Ford indicated it might need to put its
gasoline powered chassis on allocation. The Company presently believes that
its allocation by suppliers of all components is sufficient to enable the
unit volume increases that are planned for models, and the Company does not
foresee any operating difficulties as a result of vendor supply issues.*
Nevertheless, there can be no assurance that Allison, Ford, or any of the
Company's other suppliers will be able to meet the Company's future
requirements for transmissions, chassis, or other key components. An extended
delay or interruption in the supply of any components obtained from a single
or limited source supplier could have a material adverse effect on the
Company's business, results of operations and financial condition.

BACKLOG

        The Company's products are generally manufactured against orders from
the Company's dealers. As of January 1, 2000, the Company's backlog of orders
was $205.7 million, compared to $233.2 million at January 2, 1999. The Company
includes in its backlog all accepted purchase orders from dealers shippable
within the next six months. Orders in backlog can be canceled at the option of
the purchaser at any time without penalty and, therefore, backlog should not be
used as a measure of future sales.

COMPETITION

        The market for recreational vehicles is highly competitive. The Company
currently encounters significant competition at each price point for its
recreational vehicle products. The Company believes that the principal
competitive factors that affect the market for the Company's products include
product quality, product features, reliability, performance, quality of support
and customer service, loyalty of customers, brand recognition and price. The
Company believes that it competes favorably against its competitors with respect
to each of these factors. The Company's competitors include, among others:
Coachmen Industries, Inc., Fleetwood Enterprises, Inc., National R.V. Holdings,
Inc., Skyline Corporation, SMC Corporation, Thor Industries, Inc. and Winnebago
Industries, Inc. Many of the Company's competitors have significant financial
resources and extensive marketing capabilities. There can be no assurance that
either existing or new competitors will not develop products that are superior
to or that achieve better consumer acceptance than the Company's products, or
that the Company will continue to remain competitive.

GOVERNMENT REGULATION

        The manufacture and operation of recreational vehicles are subject to a
variety of federal, state and local regulations, including the National Traffic
and Motor Vehicle Safety Act and safety standards for recreational vehicles and
their components that have been promulgated by the Department of Transportation.
These standards permit the National Highway Traffic Safety Administration to
require a manufacturer to repair or recall vehicles with safety defects or
vehicles that fail to conform to applicable safety standards. Because of its
sales in Canada, the Company is also governed by similar laws and regulations
promulgated by the Canadian government. The Company has on occasion voluntarily
recalled certain products. The Company's operating results could be adversely
affected by a major product recall or if warranty claims in any period exceed
warranty reserves.

        The Company is a member of the Recreation Vehicle Industry Association
(the "RVIA"), a voluntary association of recreational vehicle manufacturers and
suppliers, which promulgates recreational vehicle safety standards. Each of the
products manufactured by the Company has an RVIA seal affixed to it to certify
that such standards have been met.

        Many states regulate the sale, transportation and marketing of
recreational vehicles. The Company is also


                                                                              8
<PAGE>

subject to state consumer protection laws and regulations, which in many
cases require manufacturers to repurchase or replace chronically
malfunctioning recreational vehicles. Some states also legislate additional
safety and construction standards for recreational vehicles.

        The Company is subject to regulations promulgated by the Occupational
Safety and Health Administration ("OSHA"). The Company's plants are periodically
inspected by federal or state agencies, such as OSHA, concerned with workplace
health and safety.

        The Company believes that its products and facilities comply in all
material respects with the applicable vehicle safety, consumer protection,
RVIA and OSHA regulations and standards. Amendments to any of the foregoing
regulations and the implementation of new regulations could significantly
increase the cost of manufacturing, purchasing, operating or selling the
Company's products and could materially and adversely affect the Company's
net sales and operating results. The failure of the Company to comply with
present or future regulations could result in fines being imposed on the
Company, potential civil and criminal liability, suspension of production or
cessation of operations.

        The Company is subject to product liability and warranty claims
arising in the ordinary course of business. To date, the Company has been
successful in obtaining product liability insurance on terms the Company
considers acceptable. The Company's current policies jointly provide coverage
against claims based on occurrences within the policy periods up to a maximum
of $41.0 million for each occurrence and $42.0 million in the aggregate.
There can be no assurance that the Company will be able to obtain insurance
coverage in the future at acceptable levels or that the costs of insurance
will be reasonable. Furthermore, successful assertion against the Company of
one or a series of large uninsured claims, or of one or a series of claims
exceeding any insurance coverage, could have a material adverse effect on the
Company's business, operating results and financial condition.

        Certain U.S. tax laws currently afford favorable tax treatment for
the purchase and sale of recreational vehicles. These laws and regulations
have historically been amended frequently, and it is likely that further
amendments and additional laws and regulations will be applicable to the
Company and its products in the future. Furthermore, no assurance can be
given that any increase in personal income tax rates will not have a material
adverse effect on the Company's business, operating results and financial
condition by reducing demand for the Company's products.

ENVIRONMENTAL REGULATION AND REMEDIATION

        REGULATION The Company's recreational vehicle manufacturing
operations are subject to a variety of federal and state environmental
regulations relating to the use, generation, storage, treatment and disposal
of hazardous materials. These laws are often revised and made more stringent,
and it is likely that future amendments to these laws will impact the
Company's operations.

        The Company has submitted applications for "Title V" air permits for
all of its existing and new operations. The air permits have either been
issued or are in the process of being issued by the relevant state agency.

        The Company does not currently anticipate that any additional air
pollution control equipment will be required as a condition of receiving new
air permits, although new regulations and their interpretation may change
over time, and there can be no assurance that additional expenditures will
not be required.*

        The Company is aware of the forthcoming adoption and implementation
of new federal Maximum Achievable Control Technology ("MACT") regulations.
The Company does not currently anticipate that compliance with the MACT
regulations by the Company will require any material capital expenditures at
its facilities beyond those which have already been incurred.* However, the
specific content and interpretation of these regulations is uncertain and
there can be no assurance that additional capital expenditures will not be
required.

        While the Company has in the past provided notice to the relevant
state agencies that air permit violations have occurred at its facilities,
the Company has resolved all such issues with those agencies, and the Company
believes that there are no ongoing violations of any of its existing air
permits at any of its owned or leased facilities

                                                                              9
<PAGE>

at this time. However, the failure of the Company to comply with present or
future regulations could subject the Company to: (i) fines; (ii) potential
civil and criminal liability; (iii) suspension of production or cessation of
operations; (iv) alterations to the manufacturing process; or (v) costly
cleanup or capital expenditures, any of which could have a material adverse
effect on the Company's business, results of operations and financial
condition.

        REMEDIATION The Company is not currently involved in remediation
activities at any of its facilities and none are in prospect. Nevertheless,
there can be no assurances that the Company will not discover environmental
problems or incur remediation costs in the future.

EMPLOYEES

        As of January 1, 2000, the Company had 3,763 employees, including 3,191
in production, 51 in sales, 332 in service and 189 in management and
administration. The Company's employees are not represented by any collective
bargaining organization, and the Company has never experienced a work stoppage
resulting from labor issues. The Company believes its relations with its
employees are good.

DEPENDENCE ON KEY PERSONNEL

        The Company's future prospects depend upon its key management personnel,
including Kay L. Toolson, the Company's Chief Executive Officer. The loss of one
or more of these key management personnel could adversely affect the Company's
business. The prospects of the Company also depend in part on its ability to
attract and retain qualified technical, manufacturing, managerial and marketing
personnel. Competition for such personnel is intense, and there can be no
assurance that the Company will be successful in attracting and retaining such
personnel.

EXECUTIVE OFFICERS OF THE COMPANY

        The following sets forth certain information with respect to the
executive officers of the Company as of March 24, 2000:

<TABLE>
<CAPTION>
NAME                                      AGE    POSITION WITH THE COMPANY
----                                      ---    -------------------------
<S>                                       <C>    <C>
Kay L. Toolson                            56     Chairman, Chief Executive Officer
                                                 and President
John W. Nepute                            48     Executive Vice President, Treasurer
                                                 and Chief Financial Officer
Richard E. Bond                           46     Senior Vice President, Secretary
                                                 and Chief Administrative Officer
Martin W. Garriott                        44     Vice President and Director of
                                                 Oregon Manufacturing
Irvin M. Yoder                            52     Vice President and Director of
                                                 Indiana Manufacturing
Patrick F. Carroll                        42     Vice President of Product
                                                 Development
</TABLE>

        Mr. Toolson has served as Chief Executive Officer of the Company and the
Predecessor since 1986 and as Chairman of the Company since July 1993. He has
served as President of the Company since 1986 except for the periods from
October 1995 to January 1997 and August 1998 to September 1999. From 1973 to
1986, Mr. Toolson held executive positions with two motor coach manufacturers.

        Mr. Nepute has served the Company as Executive Vice President, Treasurer
and Chief Financial Officer since September 1999. Prior to that and from 1991 he
served the Company and the Predecessor in the capacity of Vice President of
Finance, Treasurer and Chief Financial Officer. From January 1988 until January
1991 he served the Predecessor as Controller.

        Mr. Bond has served as Senior Vice President, Secretary and Chief
Administrative Officer of the Company since September 1999 and as Vice
President, Secretary and Chief Administrative Officer beginning in August of

                                                                              10
<PAGE>

1998. Prior to that and from February 1997 he served the Company as Vice
President, Secretary and General Counsel, having joined the Company in January
1997. From 1987 to December 1996 he held the position of Vice President,
Secretary and General Counsel of Holiday Rambler, and originally joined Holiday
Rambler as Vice President and Assistant General Counsel in 1984.

        Mr. Garriott has served the Company as Vice President and Director of
Oregon Manufacturing since January 1997. He has been continuously employed by
the Company or the Predecessor since November 1975 in various capacities,
including Vice President of Corporate Purchasing from October 1994 until
December 1996.

        Mr. Yoder has served the Company as Vice President and Director of
Indiana Manufacturing since August 1998. Joining the Company upon the
acquisition of Holiday Rambler in March 1996 as Director of Indiana Motorized
Manufacturing, he served in that capacity through July 1998. Mr. Yoder began his
employment with Holiday Rambler in 1969 and held a variety of production-related
positions, serving as Area Manager of Motorized Production from 1980 until March
1996.

        Mr. Carroll has served as Vice President of Product Development since
August 1998 and prior to that as Director of Product Development since
joining the Company in October 1995. He has held a variety of marketing and
product development positions with various recreational vehicle manufacturers
since 1979.

ITEM 2.  PROPERTIES

        The Company is headquartered in Coburg, Oregon, approximately 100 miles
from Portland, Oregon. The following table summarizes the Company's current and
planned manufacturing facilities:

<TABLE>
<CAPTION>
                                                        APPROXIMATE            PRODUCTS
MANUFACTURING FACILITY                OWNED/LEASED     SQUARE FOOTAGE         MANUFACTURED
---------------------------------     ------------     --------------    -----------------------
<S>                                   <C>              <C>               <C>
Coburg, Oregon.....................        Owned          754,000         Motor Coaches/Towables
Elkhart, Indiana...................        Owned          132,000         Motor Coaches/Towables
Elkhart, Indiana...................        Owned           30,000         Bus Conversions
Wakarusa, Indiana..................        Owned        1,154,000         Motor Coaches
Nappanee, Indiana..................        Owned          130,000         Wood Components
Springfield, Oregon................        Leased         100,000         Fiberglass components
</TABLE>

        The Company believes that after the recent expansion of its motor coach
and towable facilities in Oregon, its existing facilities, along with the future
expansion in Indiana, will be sufficient to meet its production requirements for
the foreseeable future.* Should the Company require increased production
capacity in the future, the Company believes that additional or alternative
space adequate to serve the Company's foreseeable needs would be available on
commercially reasonable terms.*

ITEM 3.  LEGAL PROCEEDINGS

        The Company is involved in legal proceedings arising in the ordinary
course of its business, including a variety of product liability and warranty
claims typical in the recreational vehicle industry. The Company does not
believe that the outcome of its pending legal proceedings, net of insurance
coverage, will have a material adverse effect on the business, financial
condition or results of operations of the Company.*

                                                                             11
<PAGE>

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

        None.


                                   PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

        The Company's Common Stock is traded on the New York Stock Exchange
under the symbol "MNC." The following table sets forth for the periods indicated
the high and low closing sale prices for the Common Stock (rounded to the
nearest $.01 per share).

<TABLE>
<CAPTION>
                                      HIGH                LOW
<S>                                  <C>                <C>
1998
    First Quarter                    $11.85              $ 7.48
    Second Quarter                   $13.17              $10.45
    Third Quarter                    $13.05              $ 8.72
    Fourth Quarter                   $17.67              $ 9.50

1999
    First Quarter                    $21.54              $15.13
    Second Quarter                   $28.21              $16.25
    Third Quarter                    $30.94              $23.44
    Fourth Quarter                   $27.50              $19.31
</TABLE>

        As of March 24, 2000, there were approximately 467 holders of record of
the Company's Common Stock. The high and low closing sales prices listed above
have been adjusted to reflect the stock splits approved by the Board on May 19,
1999, November 2, 1998 and March 16, 1998.

        The Company has never paid dividends on its Common Stock and does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. The Company's existing loan agreements prohibit the payment of dividends
on the Common Stock without the lenders' consent.

        The market price of the Company's Common Stock could be subject to wide
fluctuations in response to quarter-to-quarter variations in operating results,
changes in earnings estimates by analysts, announcements of new products by the
Company or its competitors, general conditions in the recreational vehicle
market and other events or factors. In addition, the stocks of many recreational
vehicle companies have experienced price and volume fluctuations which have not
necessarily been directly related to the companies' operating performance, and
the market price of the Company's Common Stock could experience similar
fluctuations.

                                                                              12

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        The Consolidated Statements of Income Data set forth below with respect
to fiscal years 1997, 1998 and 1999, and the Consolidated Balance Sheet Data at
January 2, 1999 and January 1, 2000, are derived from, and should be read in
conjunction with, the audited Consolidated Financial Statements and Notes
thereto of the Company included in this Annual Report on Form 10-K. The
Consolidated Statements of Income Data set forth below with respect to fiscal
years 1995 and 1996 and the Consolidated Balance Sheet Data at December 30,
1995, December 28, 1996 and January 3, 1998 are derived from audited
consolidated financial statements of the Company which are not included in this
Annual Report on Form 10-K.

        The data set forth in the following table should be read in conjunction
with, and are qualified in their entirety by, Management's Discussion and
Analysis of Financial Condition and Results of Operations, the Company's
Consolidated Financial Statements and the Notes thereto appearing elsewhere in
this Annual Report on Form 10-K.


                                                                              13

<PAGE>

FIVE-YEAR SELECTED FINANCIAL DATA

The following table sets forth financial data of Monaco Coach Corporation for
the years indicated (in thousands of dollars, except share and per share data
and consolidated operating data).

<TABLE>
<CAPTION>
                                                                          Fiscal Year
                                            ------------------------------------------------------------------------
                                                1995         1996 (1)       1997 (1)         1998           1999
                                            ------------------------------------------------------------------------
<S>                                           <C>           <C>            <C>            <C>            <C>
CONSOLIDATED STATEMENTS OF INCOME DATA:
Net sales                                       $141,611      $365,638       $441,895       $594,802       $780,815
Cost of sales                                    124,592       317,909(2)     382,367        512,570        658,536
--------------------------------------------------------------------------------------------------------------------
     Gross profit                                 17,019        47,729         59,528         82,232        122,279
Selling, general and
     administrative expenses                       8,147        33,371         36,307         41,571         48,791
Amortization of goodwill                             517           617            594            645            645
--------------------------------------------------------------------------------------------------------------------
     Operating income                              8,355        13,741         22,627         40,016         72,843
Other expense (income), net                           40          (244)          (468)          (607)          (142)
Interest expense                                     298         3,914          2,379          1,861          1,143
Gain on sale of dealership assets                                                 539
--------------------------------------------------------------------------------------------------------------------
     Income before provision
          for income taxes                         8,017        10,071         21,255         38,762         71,842
Provision for income taxes                         3,119         4,162          8,819         16,093         28,081
--------------------------------------------------------------------------------------------------------------------
     Net income                                    4,898         5,909         12,436         22,669         43,761
Redeemable preferred stock dividends                               (75)
Accretion of redeemable preferred stock                            (84)          (317)
--------------------------------------------------------------------------------------------------------------------
Net income attributable to common stock         $  4,898      $  5,750       $ 12,119       $ 22,669       $ 43,761
--------------------------------------------------------------------------------------------------------------------
Earnings per common share:
   Basic                                           $0.33         $0.39(3)       $0.72          $1.21          $2.33
   Diluted                                         $0.32         $0.38(3)       $0.71          $1.19          $2.26
Weighted average shares outstanding:
   Basic                                      14,874,727    14,924,880     16,865,842     18,658,003     18,808,963
   Diluted                                    15,097,666    15,743,665     17,545,464     19,081,984     19,366,969

CONSOLIDATED OPERATING DATA:
Units sold: (4)
     Motor coaches                                   982         2,733          3,347          4,768          6,233
     Towables                                                    1,977          2,397          2,217          3,269
Dealerships at end of period                          49           159            208            263            294

CONSOLIDATED BALANCE SHEET DATA:
Working capital                                   $3,795        $4,502        $10,412        $23,676        $38,888
Total assets                                      68,502       135,368        159,832        190,127        246,727
Long-term borrowings, less current portion         5,000        16,500         11,500          5,400
Redeemable preferred stock                                       2,687
Total stockholders' equity                        37,930        43,807         74,748         98,193        143,339
</TABLE>
------------------
(1) Includes the operations of Holiday Rambler and the Holiday World Dealerships
    from March 4, 1996. The Holiday World Dealerships generated $25.0 million
    and $6.8 million in net sales in 1996 and 1997, respectively, which included
    the sale of 820 and 211 units in 1996 and 1997, respectively, that were
    either previously owned or not Holiday Rambler units, as well as service
    revenues. The Company sold seven Holiday World Dealerships in 1996 and the
    remaining three dealerships in 1997.
(2) Includes a $1.7 million increase in cost of sales resulting from the sale of
    inventory that was written up to fair value at the date of the Holiday
    Acquisition.
(3) Includes a one time charge of $0.07 per share, net of tax effect, related to
    the inventory write-up described in Note 2 above. Excluding this charge,
    diluted earnings per common share would have been $0.44 per share.
(4) Excludes units sold by the Holiday World Dealerships that were either
    previously owned or not Holiday Rambler units.


                                                                              14
<PAGE>

         ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                                   RESULTS OF OPERATIONS

OVERVIEW

        The Company is the successor to a company formed in 1968 (the
"Predecessor") and commenced operations on March 5, 1993 by acquiring
substantially all of the assets and liabilities of the Predecessor. The
Predecessor's management and the manufacturing of its High-Line Class A motor
coaches were largely unaffected by the Predecessor Acquisition. However, the
Company's consolidated financial statements for fiscal years 1997, 1998 and 1999
all contain Predecessor Acquisition-related expenses, consisting primarily of
the amortization of goodwill.

        On March 4, 1996, the Company acquired from Harley-Davidson certain
assets of Holiday Rambler (the "Holiday Acquisition") in exchange for $21.5
million in cash, 65,217 shares of the Company's Redeemable Preferred Stock
(which was subsequently converted into 230,767 shares of the Company's Common
Stock), and the assumption of most of the liabilities of Holiday Rambler.
Concurrently, the Company acquired ten Holiday World Dealerships for $13.0
million, including a $12.0 million subordinated promissory note, and the
assumption of certain liabilities. The Company sold seven Holiday World
Dealerships in 1996, retired the $12.0 million note from the proceeds of these
sales, and sold the remaining three dealerships in 1997. The Holiday Acquisition
was accounted for using the purchase method of accounting.

        Beginning on March 4, 1996, the acquired operations were incorporated
into the Company's consolidated financial statements. The Company's consolidated
financial statements for the fiscal years ended January 3, 1998, January 2, 1999
and January 1, 2000 contain expenses related to the Holiday Acquisition,
consisting of interest expense, the amortization of debt issuance costs and
Holiday Acquisition goodwill.


RESULTS OF OPERATIONS

        1999 COMPARED WITH 1998

        Net sales increased 31.3% from $594.8 million in 1998 to $780.8 million
in 1999. The Company's overall unit sales were up 36% from 6,985 in 1998 to
9,502 units in 1999. The Company's units sales were up 30.7% on the motorized
side reflecting higher production rates in both the Coburg, Oregon and Wakarusa,
Indiana motorized plants. The Company's 1999 sales of motorized units were
helped by the introduction in December 1998 of two new motorized products which
accounted for 923 of the 1,465 unit increase in 1999 motorized sales over 1998
motorized sales. The Company's 1998 sales of motorized units were helped by the
introduction of three new motorized products in 1998 which accounted for 989 of
the 1,439 units increase in 1998 motorized unit sales over 1997 unit sales. The
Company's unit sales of towable products were up 47.5% from 1998 to 1999 as both
the Holiday Rambler and McKenzie towable operations reported strong increases.
The Company's sales of towable units had been dampened in 1998 by the
consolidation of the two Indiana-based towable facilities into one Company-owned
facility in Elkhart, Indiana. This consolidation slowed unit production volume
in that facility in the second quarter of 1998, and production of towables in
Indiana was constrained in the second half of 1998 while that plant was expanded
and remodeled. The remodeling and expansion of the Elkhart facility was
completed by the end of 1998 and Indiana towable production capacity returned to
pre-consolidation levels in 1999. The Company's overall average unit selling
price decreased slightly from $86,100 in 1998 to $82,900 in 1999 reflecting the
strong sales growth of the Company's new lower priced motorized and towable
products. The Company's continued push into the less expensive gasoline motor
coach market as well as the repositioning of some of its existing towable models
into slightly lower price points are expected to keep the overall average
selling price below $100,000.*

        Gross profit increased by $40.1 million from $82.2 million in 1998 to
$122.3 million in 1999 and gross margin increased from 13.8% in 1998 to 15.7% in
1999. In 1999 gross margin benefited from a strong mix of motorized products and
manufacturing efficiencies from an increase in production volume in all of the
Company's manufacturing plants. Gross margin in 1998 was dampened by lower gross
margins in the three towable plants in


                                                                              15
<PAGE>

the first half of 1998 due to reduced production volumes in those plants and
by costs incurred in the second quarter of 1998 related to consolidation of
the two Indiana-based towable plants into one Company-owned facility in
Elkhart, Indiana. The Company's overall gross margin may fluctuate in future
periods if the mix of products shifts from higher to lower gross margin units
or if the Company encounters unexpected manufacturing difficulties or
competitive pressures.

        Selling, general, and administrative expenses increased by $7.2 million
from $41.6 million in 1998 to $48.8 million in 1999 and decreased as a
percentage of sales from 7.0% in 1998 to 6.2% in 1999. Selling, general, and
administrative expenses benefited in 1999 from a $1.75 million reduction in the
estimated accrual for 1998 incentive based compensation. Without this benefit,
selling, general, and administrative expenses in 1999 would have increased by
$9.0 million to $50.5 million or 6.5% of sales, still significantly less than
the 7.0% of sales in 1998. The decrease in selling, general, and administrative
expenses as a percentage of sales reflected efficiencies arising from the
Company's increased sales level.

        Operating income increased $32.8 million from $40.0 million in 1998 to
$72.8 million in 1999. The Company's lower selling, general, and administrative
expense as a percentage of sales combined with the improvement in the Company's
gross margin, resulted in an increase in operating margin to 9.3% in 1999
compared to 6.7% in 1998. The Company's operating margin in 1999 was positively
affected by the $1.75 million reduction of incentive based compensation accrued
for 1998. Without this benefit the Company's operating margin in 1999 would have
been 9.1%.

        Net interest expense decreased $718,000 from $1.9 million in 1998 to
$1.1 million in 1999. The Company capitalized $44,000 of interest expense in
1998 relating to the construction in Indiana and $195,000 in 1999 relating to
the construction in Oregon. The Company's interest expense included $411,000 in
1998 and $176,000 in 1999 related to the amortization of debt issuance costs
recorded in conjunction with the Company's credit facilities. Additionally,
interest expense in 1999 included $639,000 from accelerated amortization of debt
issuance costs related to the credit facilities. The Company paid off its long
term debt of approximately $10 million at the end of the first quarter of 1999
and also reduced the amount of availability on its revolving line of credit. See
"Liquidity and Capital Resources".

        The Company reported a provision for income taxes of $16.1 million, or
an effective tax rate of 41.5%, for 1998, compared to $28.1 million, or an
effective tax rate of 39.1% for 1999.

        Net income increased by $21.1 million from $22.7 million in 1998 to
$43.8 million in 1999, due to the increase in net sales combined with an
improvement in operating margin and a decrease in interest expense.

        1998 COMPARED WITH 1997

        Net sales increased 34.6% from $441.9 million in 1997 to $594.8 million
in 1998. Included in net sales in 1997 were $10.1 million of sales of units that
were either previously owned or not Holiday Rambler units and service revenues
generated by the Holiday World Dealerships prior to their sale. The Company's
overall unit sales increased 21.6% from 5,744 units in 1997 to 6,985 units in
1998 (excluding 211 units in 1997 sold by the Holiday World Dealerships that
were either previously owned or not Holiday Rambler units). The Company's unit
sales were up 43.2% in 1998 on the motorized side and down 7.9% for towables.
The Company's overall average unit selling price (excluding units sold by the
Holiday World dealerships that were either previously owned or not Holiday
Rambler units) increased from $76,900 in 1997 to $86,100 in 1998 reflecting the
strong showing of the Company's motorized products.

         Gross profit increased by $22.7 million from $59.5 million in 1997 to
$82.2 million in 1998 and gross margin increased from 13.5% in 1997 to 13.8% in
1998.

        Selling, general and administrative expenses increased by $5.3 million
from $36.3 million in 1997 to $41.6 million in 1998 and decreased as a
percentage of net sales from 8.2% in 1997 to 7.0% in 1998. The decrease in
selling, general, and administrative expenses as a percentage of sales reflected
efficiencies arising from the


                                                                              16
<PAGE>

Company's increased sales level as well as savings derived from consolidation
of Indiana-based office staff into office space built in conjunction with the
expansion of production facilities in Wakarusa, Indiana.

        Operating income increased $17.4 million from $22.6 million in 1997 to
$40.0 million in 1998. The increase in the Company's gross margin combined with
the reduction of selling, general and administrative expenses as a percentage of
net sales resulted in an increase in operating margin from 5.1% in 1997 to 6.7%
in 1998.

        Interest expense decreased from $2.4 million in 1997 to $1.9 million in
1998. The Company's 1997 interest expense included approximately $281,000 of
floor plan interest expense relating to the Holiday World dealerships.
Additionally, interest expense included $411,000 in both years related to the
amortization of $2.1 million in debt issuance costs recorded in conjunction with
the Holiday Acquisition. These costs are being written off over a five-year
period. The Company capitalized $643,000 of interest in 1997 and $44,000 in 1998
related to the construction in progress at the manufacturing facilities in
Wakarusa, Indiana.

        In the third quarter of 1997 the Company had other income from
the sale of its two remaining Holiday World retail dealerships which resulted in
a pretax gain on the sale of the buildings and fixed assets from the stores of
$539,000. The impact was $315,000, net of tax, or 2.7 cents per share. The
Company had other income of $523,000 in the third quarter of 1998 related to
insurance reimbursement of income loss from the fire at our Coburg manufacturing
plant in July of 1997. The impact was $306,000, net of tax, or 2.4 cents per
share.

        The Company reported a provision for income taxes of $8.8 million, or an
effective tax rate of 41.5%, for 1997 compared to $16.1 million, or an effective
tax rate of 41.5%, for 1998.

        Net income increased by $10.3 million from $12.4 million in 1997 to
$22.7 million in 1998 due to the increase in net sales combined with an
improvement in operating margin and a decrease in interest expense.

INFLATION

        The Company does not believe that inflation has had a material impact on
its results of operations for the periods presented.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

        POTENTIAL FLUCTUATIONS IN OPERATING RESULTS The Company's net sales,
gross margin and operating results may fluctuate significantly from period to
period due to factors such as the mix of products sold, the ability to utilize
and expand manufacturing resources efficiently, material shortages, the
introduction and consumer acceptance of new models offered by the Company,
competition, the addition or loss of dealers, the timing of trade shows and
rallies, and factors affecting the recreational vehicle industry as a whole. In
addition, the Company's overall gross margin on its products may decline in
future periods to the extent the Company increases its sales of lower gross
margin towable products or if the mix of motor coaches sold shifts to lower
gross margin units. Due to the relatively high selling prices of the Company's
products (in particular, its High-Line Class A motor coaches), a relatively
small variation in the number of recreational vehicles sold in any quarter can
have a significant effect on sales and operating results for that quarter.
Demand in the overall recreational vehicle industry generally declines during
the winter months, while sales and revenues are generally higher during the
spring and summer months. With the broader range of recreational vehicles now
offered by the Company, seasonal factors could have a significant impact on the
Company's operating results in the future. In addition, unusually severe weather
conditions in certain markets could delay the timing of shipments from one
quarter to another.

        CYCLICALITY The recreational vehicle industry has been characterized by
cycles of growth and contraction in consumer demand, reflecting prevailing
economic, demographic and political conditions that affect disposable income for
leisure-time activities. Unit sales of recreational vehicles (excluding
conversion vehicles) reached a peak of approximately 259,000 units in 1994 and
declined to approximately 247,000 units in 1996. Although unit sales of
High-Line Class A motor coaches have increased in each year since 1989, there
can be no


                                                                              17
<PAGE>

assurance that this trend will continue. Furthermore, the Company now
offers a much broader range of recreational vehicle products and will likely be
more susceptible to recreational vehicle industry cyclicality than in the past.
Factors affecting cyclicality in the recreational vehicle industry include fuel
availability and fuel prices, prevailing interest rates, the level of
discretionary spending, the availability of credit and overall consumer
confidence. In particular, a decline in consumer confidence and/or a slowing of
the overall economy has had a material adverse effect on the recreational
vehicle market in the past. Recurrence of these conditions could have a material
adverse effect on the Company's business, results of operations and financial
condition.

        MANAGEMENT OF GROWTH Over the past four years the Company has
experienced significant growth in the number of its employees and the scope of
its business. This growth has resulted in the addition of new management
personnel and increased responsibilities for existing management personnel, and
has placed added pressure on the Company's operating, financial and management
information systems. While management believes it has been successful in
managing this expansion there can be no assurance that the Company will not
encounter problems in the future associated with the continued growth of the
Company. Failure to adequately support and manage the growth of its business
could have a material adverse effect on the Company's business, results of
operations and financial condition.

        MANUFACTURING EXPANSION The Company has significantly increased its
manufacturing capacity over the last few years and recently announced plans for
additional expansion of manufacturing facilities. The integration of the
Company's facilities and the expansion of the Company's manufacturing operations
involve a number of risks including unexpected building and production
difficulties. In the past the Company experienced startup inefficiencies in
manufacturing a new model and also has experienced difficulty in increasing
production rates at a plant. There can be no assurance that the Company will
successfully integrate its manufacturing facilities or that it will achieve the
anticipated benefits and efficiencies from its expanded manufacturing
operations. In addition, the Company's operating results could be materially and
adversely affected if sales of the Company's products do not increase at a rate
sufficient to offset the Company's increased expense levels resulting from this
expansion.

        The setup of new models and scale-up of production facilities involve
various risks and uncertainties, including timely performance of a large number
of contractors, subcontractors, suppliers and various government agencies that
regulate and license construction, each of which is beyond the control of the
Company. The setup of production for new models involves risks and costs
associated with the development and acquisition of new production lines, molds
and other machinery, the training of employees, and compliance with
environmental, health and safety and other regulatory requirements. The
inability of the Company to complete the scale-up of its facilities and to
commence full-scale commercial production in a timely manner could have a
material adverse effect on the Company's business, results of operations and
financial condition. In addition, the Company may from time to time experience
lower than anticipated yields or production constraints that may adversely
affect its ability to satisfy customer orders. Any prolonged inability to
satisfy customer demand could have a material adverse effect on the Company's
business, results of operations and financial condition.

        CONCENTRATION OF SALES TO CERTAIN DEALERS Although the Company's
products were offered by 294 dealerships located primarily in the United
States and Canada at the end of 1999, a significant percentage of the
Company's sales have been and will continue to be concentrated among a
relatively small number of independent dealers. Although no single dealer
accounted for as much as 10.0% of the Company's net sales in 1998, in 1999,
concentration of sales was 10.0% for Lazy Days RV Center, Inc. The loss of a
significant dealer or a substantial decrease in sales by such a dealer could
have a material adverse effect on the Company's business, results of
operations and financial condition. See "Business--Sales and Marketing."

        POTENTIAL LIABILITY UNDER REPURCHASE AGREEMENTS As is common in the
recreational vehicle industry, the Company enters into repurchase agreements
with the financing institutions used by its dealers to finance their purchases.
These agreements obligate the Company to repurchase a dealer's inventory under
certain circumstances in the event of a default by the dealer to its lender. If
the Company were obligated to repurchase a significant number of its products in
the future, it could have a material adverse effect on the Company's financial
condition, business and results of operations. The Company's contingent
obligations under repurchase agreements vary from period to period and totaled
approximately $278.2 million as of January 1, 2000, with approximately


                                                                              18
<PAGE>

7.1% concentrated with one dealer. See "Liquidity and Capital Resources" and
Note 17 of Notes to the Company's Consolidated Financial Statements.

        AVAILABILITY AND COST OF FUEL An interruption in the supply, or a
significant increase in the price or tax on the sale, of diesel fuel or gasoline
on a regional or national basis could have a material adverse effect on the
Company's business, results of operations and financial condition. Diesel fuel
and gasoline have, at various times in the past, been difficult to obtain, and
there can be no assurance that the supply of diesel fuel or gasoline will
continue uninterrupted, that rationing will not be imposed, or that the price of
or tax on diesel fuel or gasoline, which have increased in price over the last
few months, will not significantly increase in the future, any of which could
have a material adverse effect on the Company's business, results of operations
and financial condition.

        DEPENDENCE ON CERTAIN SUPPLIERS A number of important components for
certain of the Company's products are purchased from single or limited sources,
including its turbo diesel engines (Cummins), substantially all of its
transmissions (Allison), axles (Dana) for all diesel motor coaches other than
the Holiday Rambler Endeavor Diesel model and chassis (Workhorse, Ford and
Freightliner) for certain of its motorhome products. The Company has no long
term supply contracts with these suppliers or their distributors, and there can
be no assurance that these suppliers will be able to meet the Company's future
requirements for these components. In 1997, Allison put all chassis
manufacturers on allocation with respect to one of the transmissions the Company
uses, and in 1999 ford indicated it might need to put its gasoline powered
chassis on allocation. The Company presently believes that its allocation by
suppliers of all components is sufficient to enable the unit volume increases
that are planned for models, and the Company does not foresee any operating
difficulties as a result of vendor supply issues.* Nevertheless, there can be no
assurance that Allison, Ford, or any of the Company's other suppliers will be
able to meet the Company's future requirements for transmissions, chassis or
other key components. An extended delay or interruption in the supply of any
components obtained from a single or limited source supplier could have a
material adverse effect on the Company's business, results of operations and
financial condition. See "Business -- Changes."

        NEW PRODUCT INTRODUCTIONS The Company believes that the introduction of
new features and new models will be critical to its future success. Delays in
the introduction of new models or product features or a lack of market
acceptance of new models or features and/or quality problems with new models or
features could have a material adverse effect on the Company's business, results
of operations and financial condition. For example unexpected costs associated
with model changes have adversely affected the Company's gross margin in the
past. Future product introductions could divert revenues from existing models
and adversely affect the Company's business, results of operations and financial
condition.

        COMPETITION The market for the Company's products is highly competitive.
The Company currently competes with a number of other manufacturers of motor
coaches, fifth wheel trailers and travel trailers, many of which have
significant financial resources and extensive distribution capabilities. There
can be no assurance that either existing or new competitors will not develop
products that are superior to, or that achieve better consumer acceptance than,
the Company's products, or that the Company will continue to remain competitive.

        RISKS OF LITIGATION The Company is subject to litigation arising in the
ordinary course of its business, including a variety of product liability and
warranty claims typical in the recreational vehicle industry. Although the
Company does not believe that the outcome of any pending litigation, net of
insurance coverage, will have a material adverse effect on the business, results
of operations or financial condition of the Company, due to the inherent
uncertainties associated with litigation there can be no assurance in this
regard.

        To date, the Company has been successful in obtaining product liability
insurance on terms the Company considers acceptable. The Company's current
policies jointly provide coverage against claims based on occurrences within the
policy periods up to a maximum of $41.0 million for each occurrence and $42.0
million in the aggregate. There can be no assurance that the Company will be
able to obtain insurance coverage in the future at acceptable levels or that the
costs of insurance will be reasonable. Furthermore, successful assertion against
the Company of one or a series of large uninsured claims, or of one or a series
of claims exceeding any insurance coverage, could


                                                                              19
<PAGE>

have a material adverse effect on the Company's business, results of
operations and financial condition.

LIQUIDITY AND CAPITAL RESOURCES

        The Company's primary sources of liquidity are internally generated cash
from operations and available borrowings under its credit facilities. During
1999, the Company had cash flows of $32.2 million from operating activities. The
Company generated $49.7 million from net income and non-cash expenses such as
depreciation and amortization, which was partially offset by a net increase in
the Company's working capital accounts caused by the higher level of net sales
and increased production levels in the plants. Inventories increased by $28.0
million and deferred income taxes and income taxes payable declined by $4.2
million, which was more than the $15.4 million increase in accounts payable and
accrued expenses.

        At the end of 1998 the Company had credit facilities consisting of a
term loan of $20.0 million (the "Term Loan") and a revolving line of credit of
up to $45.0 million (the "Revolving Loans"). The Term Loan bore interest at
various rates based upon the prime lending rate announced from time to time by
Banker's Trust Company (the "Prime Rate") or Eurodollar and was due and payable
in full on March 1, 2001. At the end of the first quarter of 1999 the Company
paid off the remaining balance on the Term Loan, $10.4 million, without penalty.
Additionally, at the end of the first quarter of 1999, the Company elected to
reduce the availability on its Revolving Loans from $45 million to $20 million.
At the election of the Company, the Revolving Loans bear interest at variable
interest rates based on the Prime Rate or Eurodollar. The Revolving Loans are
due and payable in full on March 1, 2001, and require monthly interest payments.
As of January 1, 2000, $7.9 million was outstanding under the Revolving Loans,
with an effective interest rate of 8.5%. The Revolving Loans are collateralized
by a security interest in all of the assets of the Company and include various
restrictions and financial covenants. The Company utilizes "zero balance" bank
disbursement accounts in which an advance on the line of credit is automatically
made for checks clearing each day. Since the balance of the disbursement account
at the bank returns to zero at the end of each day the outstanding checks of the
Company are reflected as a liability. The outstanding check liability is
combined with the Company's positive cash balance accounts to reflect a net book
overdraft or a net cash balance for financial reporting.

        The Company's principal working capital requirements are for purchases
of inventory and, to a lesser extent, financing of trade receivables. The
Company's dealers typically finance product purchases under wholesale floor plan
arrangements with third parties as described below. At January 1, 2000, the
Company had working capital of approximately $38.9 million, an increase of $15.2
million from working capital of $23.7 million at January 2, 1999. The Company
has been using short-term credit facilities and cash flow to finance its
construction of facilities and other capital expenditures.

        The Company believes that cash flow from operations and funds available
under its credit facilities will be sufficient to meet the Company's liquidity
requirements for the next 12 months.* The Company's capital expenditures were
$32.2 million in 1999, primarily for the acquisition of the Coburg property and
construction costs for the new Coburg manufacturing facilities. In the second
half of 1999 the Company reached an agreement to acquire an additional
production facility in Elkhart, Indiana. The Elkhart facility is adjacent to the
Company's existing Elkhart operations, and includes 30 acres and 250,000 square
feet of additional production space which will be used to more than double the
Company's diesel chassis capacity in Indiana.* The Company is expecting capital
expenditures in 2000 to be approximately $20 to $25 million, which includes
remodeling and upgrading of the new Elkhart facility, finishing expansion
projects started in the second half of 1999, as well as $4 to $5 million of
maintenance capital expenditures for computer system upgrades and additions,
smaller scale plant remodeling projects and normal replacement of outdated or
worn-out equipment.* The Company may require additional equity or debt financing
to address working capital and facilities expansion needs, particularly if the
Company further expands its operations to address greater than anticipated
growth in the market for its products. The Company may also from time to time
seek to acquire businesses that would complement the Company's current business,
and any


                                                                              20
<PAGE>

such acquisition could require additional financing. There can be no
assurance that additional financing will be available if required or on terms
deemed favorable by the Company.

        As is typical in the recreational vehicle industry, many of the
Company's retail dealers utilize wholesale floor plan financing arrangements
with third party lending institutions to finance their purchases of the
Company's products. Under the terms of these floor plan arrangements,
institutional lenders customarily require the recreational vehicle manufacturer
to agree to repurchase any unsold units if the dealer fails to meet its
commitments to the lender, subject to certain conditions. The Company has
agreements with several institutional lenders under which the Company currently
has repurchase obligations. The Company's contingent obligations under these
repurchase agreements are reduced by the proceeds received upon the sale of any
repurchased units. The Company's obligations under these repurchase agreements
vary from period to period. At January 1, 2000, approximately $278.2 million of
products sold by the Company to independent dealers were subject to potential
repurchase under existing floor plan financing agreements with approximately
7.1% concentrated with one dealer. If the Company were obligated to repurchase a
significant number of units under any repurchase agreement, its business,
operating results and financial condition could be adversely affected.

IMPACT OF THE YEAR 2000 ISSUE

The Year 2000 Issue was the result of computer programs being written using two
digits rather than four to define the applicable year. Computer programs that
have date sensitive software may have recognized a date using "00" as the year
1900, rather than the year 2000. To be in "Year 2000 compliance" a computer
program must be written using four digits to define years. As a result, before
the end of 1999, computer systems and/or software used by many companies may
have needed upgrades to comply with such "Year 2000" requirements. Without
upgrades, computer systems could fail or miscalculate causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.

To date, the Company has not incurred material costs associated with Year 2000
compliance nor any disruption with vendors or operations. Furthermore, the
Company believes that any future costs associated with Year 2000 compliance
efforts will not be material.*

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

              Not Applicable


                                                                              21
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                            INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----
<S>                                                                                           <C>
Monaco Coach Corporation--Consolidated Financial Statements:
      Report of Independent Accountants..........................................................23
      Consolidated Balance Sheets as of January 2, 1999 and January 1, 2000......................24
      Consolidated Statements of Income for the Fiscal Years Ended January 3, 1998
         January 2, 1999 and January 1, 2000.....................................................25
      Consolidated Statements of Stockholders' Equity for the Fiscal Years Ended
         January 3, 1998 January 2, 1999 and January 1, 2000.....................................26
      Consolidated Statements of Cash Flows for the Fiscal Years Ended January 3, 1998
         January 2, 1999 and January 1, 2000.....................................................27
      Notes to Consolidated Financial Statements.................................................28

Schedule Included in Item 14(a):
      II Valuation and Qualifying Accounts.......................................................47
</TABLE>


                                                                              22
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS



To the Stockholders and Board of Directors of Monaco Coach Corporation:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of stockholders' equity, and of cash flows
listed in the accompanying index present fairly, in all material respects, the
financial position of Monaco Coach Corporation and Subsidiaries (the Company) at
January 2, 1999 and January 1, 2000, and the results of their operations and
their cash flows for each of the three years in the period ended January 1,
2000, in conformity with accounting principles generally accepted in the United
States. In addition, in our opinion, the financial statement schedule listed in
the accompanying index presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. 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 financial statements in accordance with auditing standards
generally accepted in the United States, 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/ PricewaterhouseCoopers LLP



January 27, 2000


                                                                              23
<PAGE>

                            MONACO COACH CORPORATION
                           CONSOLIDATED BALANCE SHEETS
           (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                   JANUARY 2,        JANUARY 1,
                                                                                      1999              2000
                                                                                 ----------------  ----------------
<S>                                                                              <C>               <C>
ASSETS
Current assets:
   Trade receivables, net of $397 and $199, respectively                         $        36,073   $        36,538
   Inventories                                                                            59,566            87,596
   Prepaid expenses                                                                          143               322
   Deferred income taxes                                                                  10,978            13,490
   Notes receivable                                                                          141
                                                                                 ----------------  ----------------

            Total current assets                                                         106,901           137,946

Notes receivable, less current portion                                                       769
Property, plant and equipment, net                                                        61,655            89,439
Debt issuance costs, net of accumulated amortization
     of $1,184 and $1,999, respectively                                                      929               114
Goodwill, net of accumulated amortization of $3,384
     and $4,029, respectively                                                             19,873            19,228
                                                                                 ----------------  ----------------
            Total assets                                                         $       190,127   $       246,727
                                                                                 ----------------  ----------------
                                                                                 ----------------  ----------------

LIABILITIES
Current liabilities:
   Book overdraft                                                                $        10,519   $        12,478
   Line of credit                                                                          1,640             7,853
   Current portion of long-term note payable                                               5,000
   Accounts payable                                                                       28,498            36,912
   Income taxes payable                                                                    4,149             1,406
   Accrued expenses and other liabilities                                                 33,419            40,409
                                                                                 ----------------  ----------------
            Total current liabilities                                                     83,225            99,058


Note payable, less current portion                                                         5,400
Deferred income taxes                                                                      3,309             4,330
                                                                                 ----------------  ----------------
            Total liabilities                                                             91,934           103,388
                                                                                 ----------------  ----------------

Commitments and contingencies (Note 17)


STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 20,000,000 shares
     authorized, 12,481,095 and 18,871,084 issued
     and outstanding respectively                                                            125               189
Additional paid-in capital                                                                44,947            46,268
Retained earnings                                                                         53,121            96,882
                                                                                 ----------------  ----------------
            Total stockholders' equity                                                    98,193           143,339
                                                                                 ----------------  ----------------
            Total liabilities and stockholders' equity                           $       190,127   $       246,727
                                                                                 ----------------  ----------------
                                                                                 ----------------  ----------------
</TABLE>




The accompanying notes are an integral part of these consolidated financial
statements.


                                                                              24
<PAGE>

                           MONACO COACH CORPORATION
                      CONSOLIDATED STATEMENTS OF INCOME FOR
          THE YEARS ENDED JANUARY 3, 1998, JANUARY 2, 1999 AND JANUARY  1, 2000
             (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                         1997             1998           1999
                                                                    ---------------   -------------  --------------
<S>                                                                 <C>               <C>            <C>
Net sales                                                           $      441,895    $    594,802   $     780,815
Cost of sales                                                              382,367         512,570         658,536
                                                                    ---------------   -------------  --------------
            Gross profit                                                    59,528          82,232         122,279

Selling, general and administrative expenses                                36,307          41,571          48,791
Amortization of goodwill                                                       594             645             645
                                                                    ---------------   -------------  --------------
            Operating income                                                22,627          40,016          72,843

Other income, net                                                              468             607             142
Interest expense                                                            (2,379)         (1,861)         (1,143)
Gain on sale of dealership assets                                              539
                                                                    ---------------   -------------  --------------
            Income before income taxes                                      21,255          38,762          71,842

Provision for income taxes                                                   8,819          16,093          28,081
                                                                    ---------------   -------------  --------------
            Net income                                                      12,436          22,669          43,761

Accretion of redeemable preferred stock                                       (317)
                                                                    ---------------   -------------  --------------
            Net income attributable to
                 common stock                                       $       12,119    $     22,669   $      43,761
                                                                    ---------------   -------------  --------------
                                                                    ---------------   -------------  --------------

Earnings per common share:
            Basic                                                        $ 0.72          $ 1.21          $ 2.33
            Diluted                                                      $ 0.71          $ 1.19          $ 2.26

Weighted average common shares outstanding:
            Basic                                                       16,865,842      18,658,003      18,808,963
            Diluted                                                     17,545,464      19,081,984      19,366,969
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                                                              25
<PAGE>

                            MONACO COACH CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
    FOR THE YEARS ENDED JANUARY 3, 1998, JANUARY 2, 1999 AND JANUARY 1, 2000
                  (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                        Common Stock           Additional
                                                   ------------------------     Paid-in      Retained
                                                     Shares       Amount        Capital      Earnings       Total
                                                   ------------  ----------   -----------   ----------   ----------
<S>                                                <C>           <C>          <C>           <C>          <C>
Balances, December 28, 1996                          4,430,467   $      44     $  25,430     $ 18,333     $ 43,807
Issuance of common stock                               835,265           9        15,697                    15,706
Conversion of preferred stock                          230,767           2         2,997                     2,999
Tax benefit of stock options exercised                                               117                       117
Preferred stock accretion                                                                        (317)        (317)
Net income                                                                                     12,436       12,436
                                                   ------------  ----------   -----------   ----------   ----------

Balances, January 3, 1998                            5,496,499          55        44,241       30,452       74,748
Issuance of common stock                                72,420           1           590                       591
Tax benefit of stock options exercised                                               185                       185
Stock splits                                         6,912,176          69           (69)                        0
Net income                                                                                     22,669       22,669

                                                   ------------  ----------   -----------   ----------   ----------
Balances, January 2, 1999                           12,481,095         125        44,947       53,121       98,193
Issuance of common stock                               116,311           1           956                       957
Tax benefit of stock options exercised                                               428                       428
Stock split                                          6,273,678          63           (63)                        0
Net income                                                                                     43,761       43,761
                                                   ------------  ----------   -----------   ----------   ----------
Balances, January 1, 2000                           18,871,084   $     189     $  46,268     $ 96,882     $143,339
                                                   ------------  ----------   -----------   ----------   ----------
                                                   ------------  ----------   -----------   ----------   ----------
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                                                              26
<PAGE>

                             MONACO COACH CORPORATION
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR  THE YEARS ENDED JANUARY 3, 1998, JANUARY 2, 1999 AND  JANUARY 1, 2000
             (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                     1997               1998              1999
                                                               ------------------  ---------------   ---------------
<S>                                                            <C>                 <C>               <C>
INCREASE (DECREASE) IN CASH:

Cash flows from operating activities:
   Net income                                                  $          12,436   $       22,669    $       43,761
   Adjustments to reconcile net income to net cash
        provided by (used in) operating activities:
      Gain on sale of dealership assets                                     (539)
      Depreciation and amortization                                        3,641            4,947             5,904
      Loss (gain) on disposal of equipment                                                    (32)
      Deferred income taxes                                                 (167)          (2,011)           (1,491)
      Change in assets and liabilities, net of effects
            of business combination:
         Trade receivables, net                                          (10,423)         (10,764)             (465)
         Inventories                                                        (790)         (14,145)          (28,030)
         Prepaid expenses                                                    415              785              (179)
         Accounts payable                                                   (720)           5,000             8,414
         Income taxes payable                                             (6,357)           3,144            (2,743)
         Accrued expenses and other liabilities                            2,463            7,392             6,990
                                                               ------------------  ---------------   ---------------
            Net cash provided by (used in) operating
              activities                                                     (41)          16,985            32,161
                                                               ------------------  ---------------   ---------------

Cash flows from investing activities:
   Additions to property, plant and equipment                            (19,617)         (10,286)          (32,228)
   Proceeds from sale of equipment                                                            189
   Proceeds from sale of retail stores and collections
      on notes receivable, net of closing costs                            1,249            1,847               910
   Other                                                                       0              (80)
                                                               ------------------  ---------------   ---------------
            Net cash used in investing activities                        (18,368)          (8,330)          (31,318)
                                                               ------------------  ---------------   ---------------

Cash flows from financing activities:
   Book overdraft                                                          4,307            3,757             1,959
   Borrowings (payments) on line of credit, net                            5,564           (7,713)            6,213
   Borrowings (payments) on floor financing, net                          (4,650)
   Payments on long-term notes payable                                    (2,625)          (5,475)          (10,400)
   Issuance of common stock                                               16,351              591             1,385
   Cost to issue shares of common stock                                     (645)
   Other                                                                     107              185

                                                               ------------------  ---------------   ---------------
            Net cash provided by (used in) financing
              activities                                                  18,409           (8,655)             (843)
                                                               ------------------  ---------------   ---------------

Net change in cash                                                             0                0                 0
Cash at beginning of period                                                    0                0                 0

                                                               ------------------  ---------------   ---------------
Cash at end of period                                          $               0   $            0    $            0
                                                               ------------------  ---------------   ---------------
                                                               ------------------  ---------------   ---------------
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                                                              27
<PAGE>

                            MONACO COACH CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1.   BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

          BUSINESS

      Monaco Coach Corporation and its subsidiaries (the "Company") manufacture
      a line of premium motor coaches, bus conversions and towable recreational
      vehicles at manufacturing facilities in Oregon and Indiana. These products
      are sold primarily to independent dealers throughout the United States and
      Canada.

      The Company has adopted Statement of Financial Accounting Standards (SFAS)
      No. 131, "Disclosures about Segments of an Enterprise and Related
      Information," effective for fiscal years beginning after December 31,
      1997. SFAS No. 131 establishes a framework for segment reporting which
      includes interim reporting requirements of selected segment information.

      The Company has determined that it has a single reportable operating
      segment consisting of the design, manufacture, and sale (wholesale) of
      recreational vehicles including motor coaches and towable fifth wheel and
      travel trailers. These product lines have similar economic characteristics
      and are similar in the nature of products, manufacturing processes,
      customer characteristics, and distribution methods.

          CONSOLIDATION POLICY

      The accompanying consolidated financial statements include the accounts of
      the Company and its wholly-owned subsidiaries. All material intercompany
      transactions and balances have been eliminated.

          FISCAL PERIOD

      The Company follows a 52/53 week fiscal year period ending on the Saturday
      closest to December 31. Interim periods also end on the Saturday closest
      to the calendar quarter end. Therefore 1997 was 53 weeks long, and 1998
      and 1999 were each 52 weeks long. All references to years in the
      consolidated financial statements relate to fiscal years rather than
      calendar years.

      STOCK SPLITS

      On May 18, 1999 the Board of Directors declared a three-for-two stock
      split in the form of a 50% stock dividend on the Company's Common stock.
      Accordingly, all historical weighted average share and per share amounts
      have been restated to reflect the stock split. Share amounts presented in
      the Consolidated Statement of Stockholders' Equity reflect the actual
      share amounts outstanding for each period presented.


      ESTIMATES AND INDUSTRY FACTORS

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

      CONCENTRATION OF CREDIT RISK - The Company distributes its products
      through an independent dealer network for recreational vehicles. Sales to
      one customer were approximately 9%, 6%, and 10% of net revenues for the
      fiscal years ended January 3, 1998, January 2, 1999, and January 1, 2000
      respectively. No other individual dealers represented over 10% of net
      revenues in 1997 or 1998. The loss of a significant dealer or a
      substantial decrease in sales by such a dealer could have a material
      adverse effect on the Company's business, results of operations and
      financial results.

Continued


                                                                              28
<PAGE>

                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


  1.    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

      Concentrations of credit risk exist for accounts receivable and repurchase
      agreements (see Note 17), primarily for the Company's largest dealers. The
      Company generally sells to dealers throughout the United States and there
      is no geographic concentration of credit risk.

      RELIANCE ON KEY SUPPLIERS - The Company's production strategy relies on
      certain key suppliers' ability to deliver subassemblies and component
      parts in time to meet manufacturing schedules. The Company has a variety
      of key suppliers, including Allison, Workhorse, Cummins, Dana, Ford and
      Freightliner. The Company does not have any long-term contracts with these
      suppliers or their distributors. In 1997, Allison put all chassis
      manufacturers on allocation with respect to one of the transmissions the
      Company uses, and in 1999 Ford indicated it might need to put its gasoline
      powered chassis on allocation. In light of these dependencies, it is
      possible that failure of Allison, Ford or any of the other suppliers to
      meet the Company's future requirements for transmissions, chassis or other
      key components could have a material near-term impact on the Company's
      business, results of operations and financial condition.

      WARRANTY CLAIMS - Estimated warranty costs are provided for at the time of
      sale of products with warranties covering the products for up to one year
      from the date of retail sale (five years for the front and sidewall frame
      structure).

      INVENTORIES

      Inventories consist of raw materials, work-in-process and finished
      recreational vehicles and are stated at the lower of cost (first-in,
      first-out) or market. Cost of work-in-process and finished recreational
      vehicles includes material, labor and manufacturing overhead costs.

      PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment, including significant improvements thereto,
      are stated at cost less accumulated depreciation and amortization. Cost
      includes expenditures for major improvements, replacements and renewals
      and the net amount of interest cost associated with significant capital
      additions during periods of construction. Capitalized interest was
      $643,000 in 1997, $44,000 in 1998 and $195,000 in 1999. Maintenance and
      repairs are charged to expense as incurred. Replacements and renewals are
      capitalized. When assets are sold, retired or otherwise disposed of, the
      cost and accumulated depreciation are removed from the accounts and any
      resulting gain or loss is reflected in income.

      The cost of plant and equipment is depreciated using the straight-line
      method over the estimated useful lives of the related assets. Buildings
      are generally depreciated over 39 years and equipment is depreciated over
      3 to 10 years. Leasehold improvements are amortized under the
      straight-line method based on the shorter of the lease periods or the
      estimated useful lives.

      At each balance sheet date, management assesses whether there has been
      permanent impairment in the value of long-lived assets. The amount of any
      such impairment is determined by comparing anticipated undiscounted future
      cash flows from operating activities with the associated carrying value.
      The factors considered by management in performing this assessment include
      current operating results, trends and prospects, as well as the effects of
      obsolescence, demand, competition and other economic factors.

      Continued

                                                                              29

<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


1.    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

      GOODWILL AND DEBT ISSUANCE COSTS

      Goodwill represents the excess of the cost of acquisition over the fair
      value of net assets acquired. The Company is the successor to a company
      formed in 1968 (the "Predecessor") and commenced operations on March 5,
      1993 by acquiring substantially all of the assets and liabilities of the
      Predecessor. The goodwill arising from the acquisition of the assets and
      operations of the Company's Predecessor in March 1993 is being amortized
      on a straight-line basis over 40 years and, at January 1, 2000, the
      unamortized amount was $2.1 million. The goodwill arising from the Holiday
      Acquisition (as hereinafter defined) is being amortized on a straight-line
      basis over 20 years; at January 1, 2000, the unamortized amount was $17.1
      million. At each balance sheet date, management assesses whether there has
      been permanent impairment in the value of goodwill. The amount of any such
      impairment is determined by comparing anticipated undiscounted future cash
      flows from operating activities with the associated carrying value. The
      factors considered by management in performing this assessment include
      current operating results, trends and prospects, as well as the effects of
      obsolescence, demand, competition and other economic factors.


                                                                              30
<PAGE>

      Unamortized debt issuance costs of $929,000 at January 2, 1999 and
      $114,000 at January 1, 2000, arising from the Holiday Acquisition, are
      being amortized over the term of the loan.

      INCOME TAXES

      Deferred taxes are recognized based on the difference between the
      financial statement and tax bases of assets and liabilities at enacted tax
      rates in effect in the years in which the differences are expected to
      reverse. Deferred tax expense or benefit represents the change in deferred
      tax asset/liability balances. A valuation allowance is established for
      deferred tax assets when it is more likely than not that the deferred tax
      asset will not be realized.

      REVENUE RECOGNITION

      The Company recognizes revenue from the sale of recreational vehicles (i)
      upon shipment or dealer/customer pick-up (most dealers finance their
      purchases under floor plan financing arrangements with banks or finance
      companies; for these sales, the financing is completed before the vehicles
      are shipped), or (ii) when the dealer has arranged floor plan financing
      for the vehicle and the vehicle is available for delivery but has been set
      aside and held at the request of the dealer, generally for a few days,
      until pick-up or delivery.

      ADVERTISING COSTS

      The Company expenses advertising costs as incurred, except for prepaid
      show costs which are expensed when the event takes place. During 1999,
      approximately $6.4 million ($6.2 million in 1997 and $6.2 million in 1998)
      of advertising costs were expensed.

      RESEARCH AND DEVELOPMENT COSTS

      Research and development costs are charged to expense as incurred and were
      $4.7 million for 1999 ($4.6 million in 1997 and $4.2 million for 1998).


      Continued


                                                                              31
<PAGE>

                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


1.    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

      SUPPLEMENTAL CASH FLOW DISCLOSURES :

<TABLE>
<CAPTION>
                                                                            (IN THOUSANDS)
                                                                1997              1998              1999
                                                          -----------------  ----------------  ---------------
     <S>                                                 <C>                 <C>               <C>
      Cash paid during the period for:
        Interest, net of amount capitalized of $643 in
            1997, $44 in 1998 and $195 in 1999            $          2,064   $         1,994   $        1,131

        Income taxes                                                15,311            14,733           30,823

      Sale of retail stores:
        Notes receivable obtained from the sale of
          retail stores                                   $          2,038
</TABLE>

2.   HOLIDAY ACQUISITION:

      On March 4, 1996, the Company acquired certain assets of the Holiday
      Rambler Recreational Vehicle Manufacturing Division ("Holiday Rambler")
      and certain assets of the Holiday World Retail Division ("Holiday World")
      of Harley-Davidson, Inc. ("Harley-Davidson"). The acquisition ("Holiday
      Acquisition") was accounted for as a purchase.

      The allocation of the purchase price and the related goodwill was subject
      to adjustment upon resolution of pre-Holiday Acquisition contingencies.
      The effects of resolution of pre-Holiday Acquisition contingencies
      occurring: (i) within one year of the acquisition date were reflected as
      an adjustment of the allocation of the purchase price and of goodwill, and
      (ii) after one year were recognized in the determination of net income.

      The ten acquired Holiday World retail store properties were classified as
      "assets held for sale". Eight of the stores were sold within one year of
      the acquisition date. The remaining two stores were sold for a gain of
      $539,000 in the third quarter of 1997 which was recognized in the
      determination of net income for the period. The Company's results of
      operations and cash flows include Holiday World since March 4, 1996, as
      the operating activities of Holiday World are not clearly distinguishable
      from other continuing operations. Net sales of Holiday World stores
      subsequent to the purchase and included in the fiscal year ended January
      3, 1998 were $6.8 million.

3.    INVENTORIES:

      Inventories consist of the following:


<TABLE>
<CAPTION>
                                                     (IN THOUSANDS)
                                              January 2,         January 1,
                                                  1999              2000
                                            ----------------   ---------------
          <S>                               <C>               <C>
          Raw materials                     $        34,207    $       48,300
          Work-in-process                            21,299            26,743
          Finished units                              4,060            12,553
                                            ----------------   ---------------
                                            $        59,566    $       87,596
                                            ================   ===============
</TABLE>


                                                                              32
<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


4.    PROPERTY, PLANT AND EQUIPMENT:

      Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                           (IN THOUSANDS)
                                                                                      January 2,         January 1,
                                                                                          1999              2000
                                                                                    ----------------   ---------------
          <S>                                                                       <C>                <C>
          Land                                                                      $         4,149    $        6,323
          Buildings                                                                          44,442            72,184
          Equipment                                                                          12,549            16,679
          Furniture and fixtures                                                              4,204             5,687
          Vehicles                                                                              942             1,028
          Leasehold improvements                                                                619               825
          Construction in progress                                                            4,161               567
                                                                                    ----------------   ---------------
                                                                                             71,066           103,293
          Less accumulated depreciation and amortization                                      9,411            13,854
                                                                                    ----------------   ---------------
                                                                                    $        61,655    $       89,439
                                                                                    ================   ===============
</TABLE>

  5.  NOTES RECEIVABLE:

      The Company acquired notes receivable as consideration for the sale of
      certain Holiday World retail stores. As of the year ended January 1, 2000,
      there were no outstanding notes receivable balances.


  6.  ACCRUED EXPENSES AND OTHER LIABILITIES:


<TABLE>
<CAPTION>
                                                                                             (IN THOUSANDS)
                                                                                      January 2,         January 1,
                                                                                          1999              2000
                                                                                    ----------------   ---------------
          <S>                                                                       <C>                <C>
          Payroll, vacation and related accruals                                    $        11,200    $       11,652
          Payroll and property taxes                                                          1,381             1,815
          Reserve for warranty claims                                                        11,906            15,300
          Reserve for product liability claims                                                5,698             7,543
          Promotional and advertising                                                           946             1,085
          Other                                                                               2,288             3,014
                                                                                    ---------------    --------------
                                                                                    $        33,419    $       40,409
                                                                                    ===============    ===============
</TABLE>


 7.   LINE OF CREDIT:

      The Company has a revolving line of credit up to $20 million, with
      interest payable monthly at varying rates based on the Company's interest
      coverage ratio and interest payable monthly on the unused available
      portion of the line at .375%. There were outstanding borrowings of $7.9
      million at January 1, 2000 with an effective interest rate of 8.5%.

      The weighted average interest rate on the outstanding borrowings under the
      revolving line of credit was 8.4% and 8.0% for 1998 and 1999,
      respectively. Interest expense on the unused available portion of the line
      was $154,000 or 3.7% and $89,000 or 3.2% of weighted average outstanding
      borrowings for 1998 and 1999, respectively. The revolving line of credit
      expires March 1, 2001 and is collateralized by all the assets of the
      Company. The agreement contains restrictive covenants as to EBITDA
      (earnings before interest, taxes, depreciation and amortization), interest
      coverage ratio, leverage ratio and capital expenditures.


                                                                              33
<PAGE>


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


8.    LONG-TERM BORROWINGS:

      In 1996, the Company obtained a term loan to finance the Holiday
      Acquisition, with interest payable monthly at various rates based on the
      Company's interest coverage ratio. During the first quarter of 1999, the
      Company paid the remaining portion of the term loan in full without
      penalty.


9.    PREFERRED STOCK:

      The Company has authorized "blank check" preferred stock (1,934,783 shares
      authorized, $.01 par value) ("Preferred Stock"), which may be issued from
      time to time in one or more series upon authorization by the Company's
      Board of Directors. The Board of Directors, without further approval of
      the stockholders, is authorized to fix the dividend rights and terms,
      conversion rights, voting rights, redemption rights and terms, liquidation
      preferences, and any other rights, preferences, privileges and
      restrictions applicable to each series of the Preferred Stock. There were
      no shares of Preferred Stock outstanding as of January 2, 1999 or January
      1, 2000.

      The Company had designated 100,000 shares of the original 2,000,000 shares
      authorized of Preferred Stock as Series A Convertible Preferred Stock
      ("Series A") at $.01 par value. The Company issued 65,217 shares of Series
      A in connection with the Holiday Acquisition. The outstanding shares of
      Series A were converted into 230,767 shares of Common Stock in conjunction
      with the Company's secondary public offering on June 23, 1997. None of the
      Series A remained authorized at January 1, 2000.

      The excess of redemption value over the carrying value of Series A was
      accreted by charges to retained earnings. For the year ended January 3,
      1998 the accretion charge was $317,000.


10.   INCOME TAXES:

      The provision for income taxes is as follows:
<TABLE>
<CAPTION>
                                                                                    (IN THOUSANDS)
                                                                       1997              1998               1999
                                                                 ----------------  ----------------   ----------------
          <S>                                                    <C>               <C>
          Current:
             Federal                                             $         7,349   $        14,985    $        24,439
             State                                                         1,637             3,119              5,133
                                                                 ----------------  ----------------   ----------------
                                                                           8,986            18,104             29,572
          Deferred:
             Federal                                                        (136)           (1,660)            (1,222)
             State                                                           (31)             (351)              (269)
                                                                 ----------------  ----------------   ----------------
                      Provision for income taxes                 $         8,819   $        16,093    $        28,081
                                                                 ----------------  ----------------   ----------------
                                                                 ----------------  ----------------   ----------------
</TABLE>

      Continued
                                                                              34

<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


10.   INCOME TAXES, CONTINUED:

      The reconciliation of the provision for income taxes at the U.S. federal
      statutory rate to the Company's effective income tax rate is as follows:
<TABLE>
<CAPTION>
                                                                                    (IN THOUSANDS)
                                                                       1997              1998               1999
                                                                 ----------------   ---------------   ----------------
          <S>                                                    <C>                <C>               <C>
          Expected U.S. federal income taxes at
               statutory rates                                   $         7,439    $       13,567    $        25,145
          State and local income taxes, net of
               federal benefit                                             1,106             1,799              3,162
          Other                                                              274               727               (226)
                                                                 ----------------   ---------------   ----------------
                                                                 $         8,819    $       16,093    $        28,081
                                                                 ----------------   ---------------   ----------------
                                                                 ----------------   ---------------   ----------------
</TABLE>

      The components of the current net deferred tax asset and long-term net
deferred tax liability are:

<TABLE>
<CAPTION>
                                                                                             (IN THOUSANDS)
                                                                                      January 2,         January 1,
                                                                                          1999              2000
                                                                                    ----------------   ---------------
          <S>                                                                       <C>                <C>
          Current deferred income tax assets:
             Warranty liability                                                     $         4,717    $        6,063
             Product liability                                                                2,374             2,989
             Inventory reserves                                                               1,134             2,443
             Payroll and related accruals                                                     1,549               973
             Other accruals                                                                   1,204             1,022
                                                                                    ----------------   ---------------
                                                                                    $        10,978    $       13,490
                                                                                    ----------------   ---------------
                                                                                    ----------------   ---------------
          Long-term deferred income tax liabilities:
             Depreciation                                                           $         1,301    $        2,194
             Amortization                                                                     2,008             2,136
                                                                                    ----------------   ---------------
                                                                                    $         3,309    $        4,330
                                                                                    ----------------   ---------------
                                                                                    ----------------   ---------------
</TABLE>

      Management believes that the temporary differences which gave rise to the
      deferred income tax assets will be reversed in the foreseeable future and
      that the benefit thereof will be realized as a reduction in the provision
      for current income taxes.

                                                                              35
<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


11.   EARNINGS PER SHARE:

      EARNINGS PER SHARE

      Basic earnings per common share is based on the weighted average number of
      shares outstanding during the period using net income attributable to
      common stock as the numerator. Diluted earnings per common share is based
      on the weighted average number of shares outstanding during the period,
      after consideration of the dilutive effect of stock options and
      convertible preferred stock, using net income as the numerator. The
      weighted average number of common shares used in the computation of
      earnings per common share for the years ended January 3, 1998, January 2,
      1999 and January 1, 2000 are as follows:

<TABLE>
<CAPTION>
                                                                       1997               1998              1999
                                                                 ----------------   ----------------  ----------------
          <S>                                                    <C>                <C>               <C>
          BASIC
          Issued and outstanding shares (weighted
               average)                                               16,865,842         18,658,003        18,808,963

          EFFECT OF DILUTIVE SECURITIES
          Stock options                                                  321,413            423,981           558,006
          Convertible preferred stock                                    358,209
                                                                 ----------------   ----------------  ----------------
          DILUTED                                                     17,545,464         19,081,984        19,366,969
                                                                 ----------------   ----------------  ----------------
                                                                 ----------------   ----------------  ----------------
</TABLE>

12.   LEASES:

      The Company has commitments under certain noncancelable operating leases.
      Total rental expense for the fiscal years ended January 3, 1998, January
      2, 1999, and January 1, 2000 related to operating leases amounted to
      approximately $1.1 million, $1.1 million, and $1.0 million respectively.

      Approximate future minimum rental commitments under these leases at
      January 1, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                         Fiscal Year                                                     (IN THOUSANDS)
                       -----------------
                       <S>                                                               <C>
                             2000                                                                 $1,790
                             2001                                                                  1,645
                             2002                                                                    271
                             2003                                                                     31
</TABLE>


13.    BONUS PLAN:

      The Company has a discretionary bonus plan for certain key employees.
      Bonus expense included in selling, general and administrative expenses for
      the years ended January 3, 1998, January 2, 1999 and January 1, 2000 was
      $4.3 million , $9.0 million and $8.0 million, respectively.

                                                                              36
<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



14.   STOCK OPTION PLANS:

      The Company has an Employee Stock Purchase Plan (the "Purchase Plan") -
      1993, a Non-employee Director Stock Option Plan (the "Director Plan") -
      1993, and an Incentive Stock Option Plan (the "Option Plan") - 1993:

      STOCK PURCHASE PLAN

      The Company's Purchase Plan qualifies under Section 423 of the Internal
      Revenue Code. The Company has reserved 455,625 shares of Common Stock for
      issuance under the Purchase Plan. During the years ended January 2, 1999
      and January 1, 2000, 26,863 shares and 25,394 shares, respectively, were
      purchased under the Purchase Plan. The weighted-average fair value of
      purchase rights granted in 1998 and 1999 was $10.77 and $20.40,
      respectively. Under the Purchase Plan, an eligible employee may purchase
      shares of common stock from the Company through payroll deductions of up
      to 10% of base compensation, at a price per share equal to 85% of the
      lesser of the fair market value of the Company's Common Stock as of the
      first day (grant date) or the last day (purchase date) of each six-month
      offering period under the Purchase Plan.

      The Purchase Plan is administered by a committee appointed by the Board.
      Any employee who is customarily employed for at least 20 hours per week
      and more than five months in a calendar year by the Company, or by any
      majority-owned subsidiary designated from time to time by the Board, and
      who does not own 5% or more of the total combined voting power or value of
      all classes of the Company's outstanding capital stock, is eligible to
      participate in the Purchase Plan.

      DIRECTORS' OPTION PLAN

      Each non-employee director of the Company, other than directors affiliated
      with Liberty Investment Partners II, L.P. or Cariad Capital, Inc., is
      entitled to participate in the Company's "Director Plan". The Board of
      Directors and the stockholders have authorized a total of 135,000 shares
      of Common Stock for issuance pursuant to the Director Plan. Under the
      terms of the Director Plan, each eligible non-employee director is
      automatically granted an option to purchase 8,000 shares of Common Stock
      (the "Initial Option") on the later of the effective date of the Company's
      initial public offering or the date on which the optionee first becomes a
      director of the Company. Thereafter, each optionee is automatically
      granted an additional option to purchase 2,500 shares of Common Stock (a
      "Subsequent Option") on September 30 of each year if, on such date, the
      optionee has served as a director of the Company for at least six months.
      Each Initial Option vests over five years at the rate of 20% of the shares
      subject to the Initial Option at the end of each anniversary following the
      date of grant. Each Subsequent Option vests in full on the fifth
      anniversary of its date of grant. The exercise price of each option is the
      fair market value of the Common Stock as determined by the closing price
      reported by the New York Stock Exchange on the date of grant. As of
      January 1, 2000, 10,800 options had been exercised, and options to
      purchase 80,600 shares of common stock were outstanding.

                                                                              37
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


14.   STOCK OPTION PLANS, CONTINUED:

      OPTION PLAN

      The Option Plan provides for the grant to employees of incentive stock
      options within the meaning of Section 422 of the Internal Revenue Code of
      1986, as amended (the "Code"), and for the grant to employees and
      consultants of the Company of nonstatutory stock options. A total of
      1,771,875 shares of Common Stock have been reserved for issuance under the
      Option Plan. As of January 1, 2000, options to purchase 728,829 shares of
      Common Stock were outstanding. These options vest ratably over five years
      commencing with the date of grant.

      The exercise price of all incentive stock options granted under the Option
      Plan must be at least equal to the fair market value of a share of the
      Company's Common Stock on the date of grant. With respect to any
      participant possessing more than 10% of the voting power of the Company's
      outstanding capital stock, the exercise price of any option granted must
      equal at least 110% of the fair market value on the grant date, and the
      maximum term of the option must not exceed five years. The terms of all
      other options granted under the Option Plan may not exceed ten years.

      Transactions involving the Director Plan and the Option Plan are
      summarized with corresponding weighted-average exercise prices as follows
      (effected for all stock splits-- See Note 11):

<TABLE>
<CAPTION>
                                                      Shares       Price
                                                    -----------  -----------
        <S>                                         <C>          <C>
        Outstanding at December 28, 1996               672,633      $ 3.33
           Granted                                     229,253        5.40
           Exercised                                   (83,864)       2.41
           Forfeited                                   (63,382)       4.22
                                                    -----------  -----------

        Outstanding at January 3, 1998                 754,640        3.98
           Granted                                     188,335       11.60
           Exercised                                  (144,345)       2.86
           Forfeited                                   (17,116)       5.64
                                                    -----------  -----------

        Outstanding at January 2, 1999                 781,514        5.99
           Granted                                     155,151       15.66
           Exercised                                  (124,264)       5.22
           Forfeited                                    (2,972)       8.43
                                                    -----------  -----------

        Outstanding at January 1, 2000                 809,429      $ 7.95
                                                    -----------  -----------
</TABLE>

      For various price ranges, weighted average characteristics of all
      outstanding stock options at January 1, 2000 were as follows:

<TABLE>
<CAPTION>
                                 Options Outstanding           Options Exercisable
                         ------------------------------------ ----------------------

           Range of                  Remaining    Weighted-              Weighted-
           Exercise                    Life        Average                Average
            Prices        Shares      (years)       Price      Shares      Price
        ---------------  ---------- ------------  ----------- ---------- -----------
        <S>              <C>        <C>           <C>         <C>        <C>
        $  0.98             83,601      3.2         $ 0.98       83,601    $ 0.98
        $  0.99 - 4.67     183,748      5.1           4.10      116,496      4.11
        $  4.68 - 7.55     211,150      6.3           5.37       70,941      4.97
        $  7.56 - 11.62    175,779      8.3          11.60       25,919     11.62
        $ 11.63 - 24.38    155,151      9.3          15.66         ---      ---
                         ----------                           ----------
                           809,429                              296,957
                         ----------                           ----------
                         ----------                           ----------
</TABLE>

      Continued
                                                                              38

<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


14.   STOCK OPTION PLAN CONTINUED:

      The Company complies with the disclosure-only provisions of SFAS No. 123,
      "Accounting for Stock-Based Compensation", and thus no compensation cost
      has been recognized for the Director Plan, the Option Plan or the Purchase
      Plan. Had compensation cost for the three stock-based compensation plans
      been determined based on the fair value of options at the date of grant
      consistent with the provisions of SFAS No. 123, the Company's pro forma
      net income and pro forma earnings per share would have been as follows:

<TABLE>
<CAPTION>
                                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                  1997         1998         1999
                                                                               -----------   ---------   -----------
          <S>                                                                  <C>           <C>         <C>
          Net income - as reported                                             $   12,436    $ 22,669    $   43,761
          Net income - pro forma                                                   12,158      22,226        43,067

          Diluted earnings per share - as reported                             $      .71        1.19          2.26
          Diluted earnings per share - pro forma                               $      .69    $   1.17          2.22
</TABLE>

      The pro forma effect on net income for 1997, 1998 and 1999 is not
      representative of the pro forma effect in future years because
      compensation expense related to grants made in prior years is not
      considered. For purposes of the above pro forma information, the fair
      value of each option grant was estimated at the date of grant using the
      Black-Scholes option pricing model with the following weighted average
      assumptions:

<TABLE>
<CAPTION>
                                                                                        1997        1998       1999
                                                                                      ---------   ---------  ---------
          <S>                                                                         <C>         <C>        <C>
          Risk-free interest rate                                                       6.14%       5.57%      4.43%
          Expected life (in years)                                                      6.16        6.69        6.65
          Expected volatility                                                          56.07%      56.58%     55.65%
          Expected dividend yield                                                       0.00%       0.00%      0.00%
</TABLE>

15.   FAIR VALUE OF FINANCIAL INSTRUMENTS:

      The fair value of the Company's financial instruments are presented below.
      The estimates require subjective judgments and are approximate. Changes in
      methodologies and assumptions could significantly affect estimates.

      LINE OF CREDIT - The carrying amount outstanding on the revolving line of
      credit is $1.6 million and $7.9 million at January 2, 1999 and January 1,
      2000, respectively, which approximates the estimated fair value as this
      instrument requires interest payments at a market rate of interest plus a
      margin.


16.   401(K) DEFINED CONTRIBUTION PLAN

      The Company sponsors a 401(k) defined contribution plan covering
      substantially all full-time employees. Company contributions to the plan
      totaled $571,000 in 1999, $439,000 in 1997 and $493,000 in 1998.

                                                                              39

<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


17.   COMMITMENTS AND CONTINGENCIES:

      REPURCHASE AGREEMENTS

      Substantially all of the Company's sales to independent dealers are made
      on terms requiring cash on delivery. The Company does not finance dealer
      purchases. However, most purchases are financed on a "floor plan" basis by
      a bank or finance company which lends the dealer all or substantially all
      of the wholesale purchase price and retains a security interest in the
      vehicles. Upon request of a lending institution financing a dealer's
      purchases of the Company's product, the Company will execute a repurchase
      agreement. These agreements provide that, for up to 18 months after a unit
      is shipped, the Company will repurchase a dealer's inventory in the event
      of a default by a dealer to its lender.

      The Company's liability under repurchase agreements is limited to the
      unpaid balance owed to the lending institution by reason of its extending
      credit to the dealer to purchase its vehicles, reduced by the resale value
      of vehicles which may be repurchased. The risk of loss is spread over
      numerous dealers and financial institutions.

      No significant net losses were incurred during the years ended January 3,
      1998, January 2, 1999 or January 1, 2000. The approximate amount subject
      to contingent repurchase obligations arising from these agreements at
      January 1, 2000 is $278.2 million. If the Company were obligated to
      repurchase a significant number of recreational vehicles in the future,
      losses and reduction in new recreational vehicle sales could result.

      PRODUCT LIABILITY

      The Company is subject to regulations which may require the Company to
      recall products with design or safety defects, and such recall could have
      a material adverse effect on the Company's business, results of operations
      and financial condition.

      The Company has from time to time been subject to product liability
      claims. To date, the Company has been successful in obtaining product
      liability insurance on terms the Company considers acceptable. The terms
      of the policy contain a self-insured retention amount of $100,000 per
      occurrence, with a maximum annual aggregate self-insured retention of $1.0
      million. Overall product liability insurance, including umbrella coverage,
      is available to a maximum amount of $41.0 million for each occurrence and
      an annual aggregate of $42.0 million. There can be no assurance that the
      Company will be able to obtain insurance coverage in the future at
      acceptable levels or that the cost of insurance will be reasonable.
      Furthermore, successful assertion against the Company of one or a series
      of large uninsured claims, or of one or a series of claims exceeding any
      insurance coverage, could have a materially adverse effect on the
      Company's business, results of operations and financial condition.

      LITIGATION

      The Company is involved in various legal proceedings which are incidental
      to the industry and for which certain matters are covered in whole or in
      part by insurance or, otherwise, the Company has recorded accruals for
      estimated settlements. Management believes that any liability which may
      result from these proceedings will not have a material adverse effect on
      the Company's consolidated financial statements.

      OTHER COMMITMENTS

      In 1999, the Company began construction of additional office facilities in
      Oregon. The new facility is scheduled to be completed in 2000 at a total
      budgeted cost of $2.0 million. At January 1, 2000, the Company had
      incurred approximately $407,000 in expenditures related to construction in
      progress on the facility.

                                                                              40
<PAGE>


                            MONACO COACH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


18.    QUARTERLY RESULTS (UNAUDITED):

<TABLE>
<CAPTION>
                                                             1st               2nd               3rd              4th
YEAR ENDED JANUARY 3, 1998                               Quarter           Quarter           Quarter          Quarter
                                                ----------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>              <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales                                               $109,024          $105,981          $105,796         $121,094
Gross profit                                              15,034            14,329            14,084           16,081
Operating income                                           5,391             5,341             5,361            6,534
Net income                                                 2,697             2,816             3,159            3,764
Net income attributable to common stock                    2,672             2,524             3,159            3,764
                                                ----------------------------------------------------------------------
Earnings per common share:
   Basic                                                   $0.18             $0.16             $0.17            $0.20
   Diluted                                                 $0.17             $0.16             $0.17            $0.20
                                                ----------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                             1st               2nd               3rd              4th
YEAR ENDED JANUARY 2, 1999                               Quarter           Quarter           Quarter          Quarter
                                                ----------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>              <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales                                               $137,176          $134,679          $153,223         $169,724
Gross profit                                              18,353            18,141            21,332           24,406
Operating income                                           7,616             8,173            10,770           13,457
Net income                                                 4,193             4,493             6,313            7,670
Net income attributable to common stock                    4,193             4,493             6,313            7,670
                                                ----------------------------------------------------------------------
Earnings per common share:
   Basic                                                   $0.23             $0.24             $0.34            $0.41
   Diluted                                                 $0.22             $0.24             $0.33            $0.40
                                                ----------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                             1st               2nd               3rd              4th
YEAR ENDED JANUARY 1, 2000                               Quarter           Quarter           Quarter          Quarter
                                                ----------------------------------------------------------------------
<S>                                                     <C>               <C>               <C>              <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales                                               $193,201          $199,178          $196,694         $191,742
Gross profit                                              29,164            31,347            30,998           30,770
Operating income                                          17,300            18,919            18,373           18,251
Net income                                                 9,878            11,457            11,227           11,199
Net income attributable to common stock                    9,878            11,457            11,227           11,199
                                                ----------------------------------------------------------------------
Earnings per common share:
   Basic                                                   $0.53             $0.61             $0.60            $0.59
   Diluted                                                 $0.51             $0.59             $0.58            $0.58

                                                ----------------------------------------------------------------------
</TABLE>

                                                                              41
<PAGE>



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

         Not Applicable.


                                                                              42
<PAGE>


                                   PART III

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

         Information required by this Item regarding directors and executive
officers set forth under the captions "Proposal 1 - Election of Directors"
and "Compliance with Section 16(a) of the Securities Exchange Act" in the
Registrant's definitive Proxy Statement is incorporated herein by reference.

ITEM 11.        EXECUTIVE COMPENSATION

         Information required by this Item regarding compensation of the
Registrant's directors and executive officers set forth under the captions
"Proposal 1 - Election of Directors - Compensation of Directors" and
"Additional Information - Executive Compensation" in the Proxy Statement is
incorporated herein by reference.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information required by this Item regarding beneficial ownership of
the Registrant's Common Stock by certain beneficial owners and management of
the Registrant set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated
herein by reference.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information required by this Item regarding certain relationships
and related transactions with management set forth under the caption
"Additional Information - Compensation Committee Interlocks and Insider
Participation" in the Proxy Statement is incorporated herein by reference.


                                                                              43
<PAGE>

                                   PART IV

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

         (a) The following documents are filed as part of this Report on Form
10-K:

         1. FINANCIAL STATEMENTS. The Consolidated Financial Statements of
Monaco Coach Corporation and the Report of Independent Accountants are filed
in Item 8 within this Annual Report on Form 10-K.

         2. FINANCIAL STATEMENT SCHEDULE. The following financial statement
schedule of Monaco Coach Corporation for the fiscal years ended January 3,
1998, January 2, 1999 and January 1, 2000 is filed as part of this Annual
Report on Form 10-K and should be read in conjunction with the Consolidated
Financial Statements, and related notes thereto, of Monaco Coach Corporation.

    SCHEDULE                                                              PAGE
       II             Valuation and Qualifying Accounts                    47

        Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the consolidated financial statements or notes thereto.

         3. EXHIBITS. The following Exhibits are filed as part of, or
incorporated by reference into, this Report on Form 10-K.

<TABLE>
<S>               <C>
3.1               Amended and Restated Certificate of Incorporation of the
                  Registrant (Incorporated herein by reference to Exhibit (3.1)
                  to the Registrant's Annual Report on Form 10-K for the year
                  ended January 1, 1994).

3.2               Certificate of Amendment of Amended & Restated Certificate of
                  Incorporation dated June 30, 1999.

3.3               Bylaws of Registrant, as amended to date (Incorporated herein
                  by reference to Exhibit (3.2) to the Registrant's Annual
                  Report on Form 10-K for the year ended January 1, 1994).

10.1              Form of Indemnification Agreement for directors and executive
                  officers (Incorporated herein by reference to Exhibit (10.2)
                  to the Registrant's Registration Statement on Form S-1 (Reg.
                  No. 33-67374) declared effective on September 23, 1993).

10.2+             1993 Incentive Stock Option Plan and form of option agreement
                  thereunder.

10.3+             1993 Director Option Plan and form of subscription agreement
                  thereunder.

10.4+             1993 Employee Stock Purchase Plan and form of subscription
                  agreement thereunder (Incorporated herein by reference to
                  Exhibit (10.5) to the Registrant's Registration Statement on
                  Form S-1 (Reg. No. 33-67374) declared effective on September
                  23, 1993).

10.5              Registration Agreement dated March 5, 1993 between the
                  Registrant, Liberty Investment Partners, II and SBA
                  (Incorporated herein by reference to Exhibit (10.10) to the
                  Registrant's Registration Statement on Form S-1 (Reg. No.
                  33-67374) declared effective on September 23, 1993).

10.6              Registration Agreement dated March 5, 1993 among the
                  Registrant, Monaco Capital Partners, Tucker Anthony Holding
                  Corporation and certain other stockholders of the Registrant
                  (Incorporated herein by reference to Exhibit (10.11) to the
                  Registrant's Registration Statement on Form S-1 (Reg. No.
                  33-67374) declared effective on September 23, 1993).

10.7              Credit Agreement dated as of March 5, 1996 among BT Commercial
                  Corporation, Deutsche

                                                                              44
<PAGE>


                  Financial Services Corporation, Nationsbank of Texas, N.A.,
                  LaSalle National Bank and Monaco Coach Corporation
                  (Incorporated herein by reference to Exhibit (10.1) filed in
                  response to Item 7, "Financial Statements and Exhibits," of
                  the Company's Current Report on Form 8-K dated March 4, 1996).

10.8              Registration Rights Agreement dated as of March 4, 1996 among
                  Holiday Rambler LLC and Monaco Coach Corporation (Incorporated
                  herein by reference to Exhibit (10.2) filed in response to
                  Item 7, "Financial Statements and Exhibits," of the
                  Registrant's Current Report on Form 8-K dated March 4, 1996).

11.1              Computation of earnings per share (see Note 11 of Notes to
                  Consolidated Financial Statements included in Item 8 hereto).

21.1              Subsidiaries of Registrant.

23.1              Consent of Independent Accountants.

24.1              Power of Attorney (included on the signature pages hereof).

27                Financial Data Schedule
</TABLE>

        ------------
+                 The item listed is a compensatory plan.

         (b)      REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the
                  Company during the quarter ended January 1, 2000.




                                                                              45
<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 on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.

         March 30, 2000             MONACO COACH CORPORATION

                                     By: /s/ Kay L. Toolson
                                         ------------------
                                          Kay L. Toolson
                                          Chief Executive Officer

                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kay L. Toolson and John W. Nepute, and
each of them, jointly and severally, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any and all
amendments to this Report on Form 10-K and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on 10-K has been signed by the following persons in the capacities and on the
dates indicated:

<TABLE>
<CAPTION>
                  Signature                                     Title                                   Date
---------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                                      <C>

/s/ Kay L. Toolson                     Chairman of the Board and Chief Executive                March 30, 2000
------------------                     Officer (Principal Executive Officer)
(Kay L. Toolson)

/s/ John W. Nepute                     Vice   President  of  Finance  and  Chief   Financial    March 30, 2000
------------------                     Officer (Principal Financial and Accounting Officer)
(John W. Nepute)

/s/ Michael J. Kluger                  Director                                                 March 30, 2000
---------------------
(Michael J. Kluger)

/s/ Lee Posey                          Director                                                 March 30, 2000
-------------
(Lee Posey)

/s/ Carl E. Ring, Jr.                  Director                                                 March 30, 2000
---------------------
(Carl E. Ring, Jr.)

/s/ Richard A. Rouse                   Director                                                 March 30, 2000
--------------------
(Richard A. Rouse)

/s/ Roger A. Vandenberg                Director                                                 March 30, 200o
-----------------------
(Roger A. Vandenberg)

</TABLE>


                                                                              46


<PAGE>


                            MONACO COACH CORPORATION

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                              BALANCE AT     CHARGE                   BALANCE AT
                                               BEGINNING       TO         CLAIMS       END OF
DESCRIPTION                                    OF PERIOD     EXPENSE       PAID        PERIOD
                                              ------------ ------------ ------------ ------------
<S>                                           <C>          <C>          <C>          <C>
Fiscal year ended January 3, 1998:
    Reserve for warranty claims...........      $8,791       $14,697      $13,507       $9,981
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------
    Reserve for product liability.........      $4,507       $ 3,929      $ 3,177       $5,259
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------

Fiscal year ended January 2, 1999:
    Reserve for warranty claims...........      $9,981       $12,726      $10,801      $11,906
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------
    Reserve for product liability.........      $5,259       $ 3,872      $ 3,433       $5,698
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------

Fiscal year ended January 1, 2000:
    Reserve for warranty claims...........     $11,906       $14,881      $11,487      $15,300
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------
    Reserve for product liability.........      $5,698        $5,625       $3,780       $7,543
                                              ------------ ------------ ------------ ------------
                                              ------------ ------------ ------------ ------------
</TABLE>


                                                                              47

<PAGE>
                                EXHIBIT INDEX
<TABLE>
<CAPTION>

Exhibit No.                                              Exhibit
-----------       -------------------------------------------------------------
<S>               <C>
 3.1              Amended and Restated Certificate of Incorporation of the
                  Registrant (Incorporated herein by reference to Exhibit (3.1)
                  to the Registrant's Annual Report on Form 10-K for the year
                  ended January 1, 1994).

 3.2              Certificate of Amendment of Amended & Restated Certificate of
                  Incorporation dated June 30, 1999.

 3.3              Bylaws of Registrant, as amended to date (Incorporated herein
                  by reference to Exhibit (3.2) to the Registrant's Annual
                  Report on Form 10-K for the year ended January 1, 1994).

10.1              Form of Indemnification Agreement for directors and executive
                  officers (Incorporated herein by reference to Exhibit (10.2)
                  to the Registrant's Registration Statement on Form S-1 (Reg.
                  No. 33-67374) declared effective on September 23, 1993).

10.2+             1993 Incentive Stock Option Plan and form of option agreement
                  thereunder.

10.3+             1993 Director Option Plan and form of subscription agreement
                  thereunder.

10.4+             1993 Employee Stock Purchase Plan and form of subscription
                  agreement thereunder (Incorporated herein by reference to
                  Exhibit (10.5) to the Registrant's Registration Statement on
                  Form S-1 (Reg. No. 33-67374) declared effective on September
                  23, 1993).

10.5              Registration Agreement dated March 5, 1993 between the
                  Registrant, Liberty Investment Partners, II and SBA
                  (Incorporated herein by reference to Exhibit (10.10) to the
                  Registrant's Registration Statement on Form S-1 (Reg. No.
                  33-67374) declared effective on September 23, 1993).

10.6              Registration Agreement dated March 5, 1993 among the
                  Registrant, Monaco Capital Partners, Tucker Anthony Holding
                  Corporation and certain other stockholders of the Registrant
                  (Incorporated herein by reference to Exhibit (10.11) to the
                  Registrant's Registration Statement on Form S-1 (Reg. No.
                  33-67374) declared effective on September 23, 1993).

10.7              Credit Agreement dated as of March 5, 1996 among BT Commercial
                  Corporation, Deutsche Financial Services Corporation,
                  Nationsbank of Texas, N.A., LaSalle National Bank and Monaco
                  Coach Corporation (Incorporated herein by reference to Exhibit
                  (10.1) filed in response to Item 7, "Financial Statements and
                  Exhibits," of the Company's Current Report on Form 8-K dated
                  March 4, 1996).

10.8              Registration Rights Agreement dated as of March 4, 1996 among
                  Holiday Rambler LLC and Monaco Coach Corporation (Incorporated
                  herein by reference to Exhibit (10.2) filed in response to
                  Item 7, "Financial Statements and Exhibits," of the
                  Registrant's Current Report on Form 8-K dated March 4, 1996).

11.1              Computation of earnings per share (see Note 11 of Notes to
                  Consolidated Financial Statements included in Item 8 hereto).

21.1              Subsidiaries of Registrant.

23.1              Consent of Independent Accountants.

24.1              Power of Attorney (included on the signature pages hereof).

27                Financial Data Schedule
</TABLE>
        ------------
+     The item listed is a compensatory plan..

                                                                              48