SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                      For the year ended December 31, 2002
                                       or
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                         Commission file number 0-22268

                          NATIONAL R.V. HOLDINGS, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)
          Delaware                                           No. 33-0371079
          --------                                           --------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
3411 N. Perris Blvd., Perris, California                         92571
----------------------------------------                         -----
(Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (909) 943-6007

          Securities registered pursuant to Section 12(b) of the Act:

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

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 90 days.

                                   Yes X No___

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes _ No X

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

     Aggregate  market  value  (based upon the closing sale price) of the voting
stock held by nonaffiliated  stockholders of Registrant as of March 14, 2003 was
approximately $45,100,000.

     The number of shares  outstanding of the  Registrant's  common stock, as of
March 14, 2003, was 9,832,161.

     Documents  Incorporated  by Reference:  Part III  incorporates by reference
portions of the National R.V. Holdings, Inc. Proxy Statement for the 2003 Annual
Meeting of Stockholders to be filed within 120 days of December 31, 2002.

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<PAGE>

     Website Access to Company's Reports National R.V. Holdings, Inc.'s Internet
website  address is  www.nrvh.com.  The Company's  annual  reports on Form 10-K,
quarterly  reports on Form 10-Q,  current reports on Form 8-K, and amendments to
those  reports  filed or  furnished  pursuant  to section  13(a) or 15(d) of the
Exchange Act are available free of charge through the Company's  website as soon
as reasonably practicable after they are electronically filed with, or furnished
to, the Securities and Exchange Commission.

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<PAGE>



TABLE OF CONTENTS


PART I.........................................................................4

 Item 1.  Business.............................................................4
 Item 2.  Properties..........................................................12
 Item 3.  Legal Proceedings...................................................12
 Item 4.  Submission of Matters to a Vote of Security Holders.................12

PART II.......................................................................13

 Item 5.  Market for Registrant's Common Equity and Related Stockholder
          Matters.............................................................13
 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..........23
 Item 8.  Financial Statements and Supplementary Data.........................23
 Item 9.  Changes in and Disagreements With Accountants on Accounting and
          Financial Disclosure................................................23

PART III......................................................................24

 Item 10. Directors and Officers of the Registrant............................24
 Item 11. Executive Compensation..............................................24
 Item 12. Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholder Matters.........................................24
 Item 13. Certain Relationships and Related Transactions......................24
 Item 14. Controls and Procedures.............................................24

PART IV.......................................................................25

 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.....25
          SIGNATURES..........................................................26
          CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER........................27
          CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER........................28
          REPORT OF INDEPENDENT ACCOUNTANTS...................................29
          CONSOLIDATED BALANCE SHEETS.........................................30
          CONSOLIDATED STATEMENTS OF OPERATIONS...............................31
          CONSOLIDATED STATEMENTS OF CASH FLOWS...............................32
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.....................33
          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS.....................44

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                                     PART I

Item 1.  Business

General

     National R.V. Holdings, Inc. (the "Company") is one of the nation's leading
manufacturers  of Class A  motorhomes.  The  Company's  product line consists of
49models of  motorhomes  and 21 models of towables  (fifth  wheel  trailers  and
travel  trailers)  across  numerous  price ranges.  From its Perris,  California
facility,  the Company  designs,  manufactures  and markets  National R.V., Inc.
("NRV") Class A motorhomes under brand names including Tradewinds,  Dolphin, Sea
Breeze, Tropi-Cal, and Islander, and travel trailers under brand names including
Blaze'n,  Palisades,  Sea Breeze,  Splash,  Surfside  Lite and Rage'n.  From its
Junction City,  Oregon facility,  the Company designs,  manufactures and markets
Country Coach,  Inc. ("CCI") high-end  (Highline) Class "A" motorhomes under the
brand names including Affinity,  Allure, Intrigue,  Inspire, Lexa and Magna, and
bus  conversions  under the  Country  Coach  Prevost  brand.  Based upon  retail
registrations  in 2002,  the  Company,  which began  manufacturing  recreational
vehicles ("RVs") in 1964, is the sixth largest domestic  manufacturer of Class A
motorhomes  and sells its motorhomes  and travel  trailers  through a network of
approximately 168 dealer locations in 37 states and Canada.

     The Company was incorporated in Delaware in 1988. As used herein,  the term
"Company" refers to National R.V. Holdings, Inc., NRV and CCI unless the context
otherwise requires.

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

Recreational Vehicle Industry Overview

Products

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

     Motorhomes:  Motorhomes  are  self-powered  RVs  built  on a motor  vehicle
chassis. The interior typically includes a driver's area and kitchen,  bathroom,
dining and sleeping areas.  Motorhomes are self-contained,  with their own power
generation,  heating, cooking,  refrigeration,  sewage holding and water storage
facilities,  so that they can be lived in without  being  attached to utilities.
Motorhomes  are  generally  categorized  into,  A,  B and  C  classes.  Class  A
motorhomes are constructed on a medium-duty to heavy-duty  truck chassis,  which
includes the engine, drive train and other operating  components.  Retail prices
for Class A  motorhomes  generally  range  from  $40,000 to  $200,000.  Highline
motorhomes, which are a subset of Class A motorhomes,  generally range in retail
price from  $200,000 to  $1,200,000.  Class C  motorhomes  are built on a van or
pick-up truck chassis,  which includes an engine,  drive-train  components and a
finished  cab  section,  and  generally  range in retail  price from  $40,000 to
$70,000.  Class B motorhomes  are van campers,  which  generally  contain  fewer
features than Class A or Class C motorhomes.


     Towables:  Towables are  non-motorized  RVs.  Fifth-wheel  travel trailers,
similar to motorhomes in features and use, are constructed with a raised forward
section  that  attaches  to the bed of a pick-up  truck.  This allows a bi-level
floor plan and generally more living space than  conventional  travel  trailers.
Fifth-wheel  travel  trailers are typically less  expensive than  motorhomes and
range in retail price from $13,000 to $80,000.  Conventional travel trailers are
similar  to  fifth-wheel  travel  trailers  but do not have the  raised  forward
section.  Truck campers have many of the amenities  found on travel trailers and
slide into the bed of a pickup truck.  Folding  camping  trailers  contain fewer
features  than  other  towables  and are  constructed  with  collapsible  "tent"
sidewalls that fold for easy towing.

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

                                      4
<PAGE>


Trends and Demographics

     According to the RVIA's wholesale statistics,  RV unit sales (excluding van
conversions)  in 2002  increased  21.1% to 311,000  from  256,800  in 2001.  The
aggregate  wholesale  value of  these  2002  shipments  was  approximately  $9.2
billion, with Class A motorhomes comprising $4.7 billion or 51% of the total and
travel trailers  comprising $3.2 billion or 35% of the total.  Unit shipments of
Class A motorhomes in 2002  increased  18.6% to 39,600 from 33,400 in 2001.  The
average  wholesale  price  of  Class A  motorhomes  increased  13.2%  in 2002 to
$118,131  from $104,386 in 2001.  Unit  shipments of travel  trailers  increased
24.8% in 2002 to 195,800 from 156,900 in 2001.  The average  wholesale  price of
conventional  travel trailers  increased 4.5% in 2002 to $12,819 from $12,269 in
2001, while the average wholesale price of fifth-wheel travel trailers increased
9.9% to $22,714 in 2002 from $20,670 in 2001.

     While overall unit shipments  have increased over the past five years,  the
RV industry's manufacturing base has remained relatively constant.  Between 1998
and 2002, the number of Class A motorhome manufacturers increased from 25 to 28.
In addition,  during this period,  the aggregate  retail market share of the ten
largest Class A motorhome manufacturers decreased from 92.5% to 90.5%.

     RVs are purchased for a variety of purposes,  including  camping,  visiting
family and friends, sightseeing, vacationing and enjoying outdoor activities and
sporting events. According to a 2001 University of Michigan study, approximately
6.9 million  households  (or 7.6% of all  households) in the United States owned
RVs in 2001, up from 6.4 million in 1997, 5.8 million in 1993 and 5.8 million in
1988. In addition, the study indicated that 59% of all current RV owners and 31%
of all former RV owners  plan to purchase  another RV in the future.  This study
further indicated that 67% of all future RV purchases will be used RVs (RVIA and
market share  statistics  reflect new product sales only) with 32% of these used
RVs older than 15 years.

     Ownership of RVs reaches its highest level among those Americans aged 55 to
64, with 13.7% of households in this  category  owning RVs.  According to a 2001
University of Michigan  study,  the number of  households  in this group,  which
constitutes  the Company's  primary target  market,  is projected to grow by 6.4
million households, or 45% from 2001 to 2010 as compared to total growth of 10.5
million households, or 10.0%. Baby Boomers are defined as those born between the
years 1946 and 1964,  and thus the leading  edge of the Baby  Boomer  generation
began  turning 50 in 1996.  This  generation is expected to be more affluent and
retire earlier than past  generations.  As Baby Boomers enter and travel through
the  important 50 to 65 age group for RV sales,  the Company  believes that they
represent  the  potential  for  a  secular   uptrend  in  the  RV  industry.

Additionally,  the RVIA's "Go RVing" campaign has been successful in bringing in
new buyers and younger buyers.

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


Business Development and Strategy


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

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

     Offering the Highest Value  Products at Multiple  Price Points to Appeal to
First Time and Repeat Buyers.  The Company  currently  offers  seventy  distinct
lines of RV's,  which are available in a variety of lengths,  floorplans,  color
schemes and interior designs and range in suggested retail price from $13,000 to
$1,200,000.  Each model is  intended  to attract  customers  seeking a RV within
their price range by offering value superior to competitive  products from other
manufacturers.   RVIA  data  indicates  that  most  motorhome   purchasers  have
previously owned a recreational vehicle, and the Company's models are positioned
to address the demands of these repeat customers as well as first time buyers.

                                       5

<PAGE>

     Utilizing  Vertically  Integrated   Manufacturing  Processes.  The  Company
designs and  manufactures  a significant  number of the  components  used in the
assembly of its products,  rather than purchasing  them from third parties.  The
Company believes that its vertically integrated manufacturing processes allow it
to achieve cost  savings and better  quality  control.  The  Company's  in-house
research and development staff and on-site component  manufacturing  departments
enable  the  Company  to ensure a timely  supply of  necessary  products  and to
respond rapidly to market changes.

     Capitalizing  on the  Company's  Reputation  to Expand its  Presence in the
Highline Market. The Company's Country Coach product offerings focus exclusively
on the  Highline  segment of the Class A  motorhome  market.  The  Company has a
strong  market  share in the  Highline  segment.  For the  twelve  months  ended
December 31, 2002,  the Company was the third largest  manufacturer  of Highline
motorhomes,  with approximately  14.7% of this market,  down from 16.8% in 2001.
The  Company  is  actively  seeking  to  expand  its  share  of this  market  by
capitalizing  on  its  established  reputation,  continuing  to  offer  superior
products  while  reducing its costs,  and expanding its  production  capacity in
order to target the market's  growing  population,  expanding its dealer network
and  satisfy  the desire of many  current  RV owners to  purchase  more  upscale
vehicles.

Products

     The Company's  product  strategy is to offer the highest value RVs across a
wide  range of retail  prices in order to appeal to a broad  range of  potential
customers and to capture the business of brand-loyal  repeat purchasers who tend
to trade up with each new purchase.  National RV currently  manufactures Class A
motorhomes under Dolphin,  Islander, Sea Breeze,  Tradewinds and Tropi-Cal brand
names and travel  trailers  under the Blaze'n,  Palisades,  Rage'n,  Sea Breeze,
Splash and Surfside Lite brand names. CCI currently  manufactures Highline Class
"A"  motorhomes  under the brand names  including  Affinity,  Allure,  Intrigue,
Inspire,  Lexa and Magna,  and bus  conversions  under the Country Coach Prevost
name.

     The Company's  recreational vehicles are designed to offer all the comforts
of home within a 180 to 450 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. In
many  models,  the  Company  offers  up to  three  "slide-outs",  which  creates
additional  living space that can be utilized when parked.  For each model,  the
Company offers a variety of interior layouts.

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

     Country Coach Prevost XLII  Conversion.  This completely  customized bus is
built on the 45' LeMirage XLII Prevost  chassis.  Fully custom interiors on this
coach are complemented by multi-color  custom exterior graphics with clear coat.
The coach offers  custom  modifications,  state-of-the-art  customized  Crestron
electronics,  in-motion satellite dish, GPS navigation system, concealable color
back-up monitor,  computerized  touch pad switching,  computerized air leveling,
and a 60" projection home theater system that folds neatly away into the ceiling
when not in use.  Slide  room  floorplans  expand  the  interior  living  space.
Suggested   retail  prices  for  the  Country  Coach  Prevost  XLII   Conversion
Double-slide start at $1,218,000.  The Country Coach Prevost XLII Conversion was
introduced in 1979.

     Lexa.  The Lexa is  available  in 42' and 45' lengths with double or triple
slide-outs  and the  opportunity  for  considerable  customization  of both  the
interior and exterior features.  Built on the Company's own DynoMax chassis with
independent  front suspension and a liftable tag axle, the Lexa is equipped with
the  Caterpillar  C-15  515  HP  diesel  engine  teamed  with  Allison's  4000MH
transmission. Suggested retail pricing for the Lexa starts at $684,000. The Lexa
debuted in 2001.

                                       6
<PAGE>

     Affinity. The Affinity is available in 40', 42' and 45' lengths with double
slide-outs  and is powered by the  Caterpillar  C-12 505 HP engine  teamed  with
Allison's 4000MH transmission. The Affinity is built on the DynoMax chassis, and
features  independent front suspension,  ABS brakes, front disc brakes, IPD sway
bar and liftable tag axle. Six  designer-coordinated  interior packages (with an
option to customize),  dual slide-out floorplan combinations and custom exterior
graphics offer significant  opportunities for personalization.  Suggested retail
prices for the Affinity start at $527,000. The Affinity was introduced in 1991.

     Magna.  The Magna is  available in 40' and 42' lengths with dual and triple
slide-outs  floorplans.  The Magna is built on the DynoMax  chassis and features
independent  front suspension and a Caterpillar C-12 505 HP diesel engine teamed
with Allison's 4000MH  transmission.  Six designer coordinated interior packages
(buyers may also modify a standard scheme or significantly customize) complement
the  fiberglass  exterior with four exterior paint graphic  packages.  Suggested
retail prices for the Magna start at $425,000. The Magna was introduced in 1991.

     Intrigue.  The  Intrigue  is  built on the  DynoMax  chassis  and  features
independent front suspension,  ABS brakes,  and an IPD sway bar. It is available
in 32',  36',  38',  40' and 42' lengths.  This diesel  pusher is powered by the
Cummins ISL 370 HP engine,  or optional  400 HP diesel  engine.  The  fiberglass
exterior  features  painted  exterior  graphics  including  full body paint with
complete clear coat protection.  Custom crafted cabinetry is standard in each of
the single, dual, Grand Opening dual living room slide-outs and triple slide-out
floorplans.  Suggested  retail  prices for the Intrigue  start at $288,000.  The
Intrigue was introduced in 1994.

     Allure.  The Allure is available  in 32', 36' and 40' lengths,  is built on
the DynoMax  chassis and is powered by the Cummins  Interact System (ISC) 350 HP
diesel  engine (or  optional  ISC 370 HP engine)  teamed with  Allison's  3000MH
transmission. The fiberglass exterior, with its painted graphics, including full
body paint,  complete  clear coat  protection  and  bus-style  aerodynamics,  is
complemented by four designer coordinated interior packages. Single, dual, Grand
Opening dual living room slides and triple slide-out floorplan  arrangements are
available.  Suggested retail prices for the Allure start at $254,000. The Allure
was introduced in 1995.

     Inspire.  The Inspire will be available in 36' and 40' lengths, is built on
the DynoMax  chassis and is powered by the Cummins ISC 350 HP diesel power plant
paired with an Allison  3000MH  transmission.  Offering  an interior  height six
inches  taller than  traditional  Country Coach  motorcoaches,  the Inspire will
debut at  dealerships  in late Spring,  2003.  Suggested  retail  prices for the
Inspire start at $221,000.

     Islander.  The 40' Islander is a luxury,  bus-style  diesel pusher built on
the Country Coach  Dynomax  10TDX  chassis,  offering  considerable  strength in
addition to features  like a 400 HP Cummins  diesel  engine,  independent  front
suspension, and high tow ratings. The Islander features large double slide rooms
that add approximately 45 square feet of additional living space. This motorhome
receives  intricate full exterior paint designs,  in addition to luxury interior
appointments  like  UltraLeather,  upgraded  electronics  and  several  interior
upgrades.  Suggested  retail  prices for the  Islander  start at  $256,000.  The
Islander debuted in 1999.

     Tradewinds.   The   Tradewinds   nameplate   is  found  on  two   motorhome
incarnations,  each with a  different  offering  of features  and  options.  The
Tradewinds LTC is available in 37' to 39' floorplans and is built on the Country
Coach Dynomax 8TDX chassis.  The Tradewinds LTC features an extensively upgraded
diesel  chassis from its sister  product,  the  Tradewinds  LE.  These  upgrades
include a more powerful  engine,  greater  storage space and  independent  front
suspension.  Featuring many luxury  appointments in addition to full body paint,
the  Tradewinds  LTC  is  both  upscale  and  affordable.  The  more  economical
Tradewinds LE is available in four floorplans on a diesel-powered chassis. These
chassis  features  include a raised rail chassis  design and  independent  front
suspension.  Each Tradewinds model is a full-basement,  bus-style motorhome with
automatic double slide-out features that expand the interior of the motorhome to
add additional living space. Depending on the model,  Tradewinds are produced in
35' to 39' lengths and are  available  with a choice of cherry,  walnut or maple
interiors. Suggested retail prices for the Tradewinds start at $171,000.

     Tropi-Cal.  The  Tropi-Cal is a  competitively  priced  entry-level  diesel
pusher  built  on the  Freightliner  XC-Series  Chassis.  Both  the  35' and 37'
Tropi-Cal  floorplans  feature three slide-outs and include  expansive  basement
storage,  excellent  cargo  carrying  capacities  and  comfortable,   convenient
layouts.  The Tropi-Cal offers a distinct vinyl graphics package and capitalizes
on brand loyalty earned since the original  nameplate  introduction in the early
1990s.  Suggested  retail  prices  for the  Tropi-Cal  start  at  $152,000.  The
Tropi-Cal was originally introduced as a gasoline motorhome in 1994 and recently
made its debut as a diesel pusher in 2002.

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<PAGE>

     Dolphin.  The  Dolphin  is  available  in  five  floorplans,  and is  built
exclusively on Workhorse's W-22 gas-powered  chassis.  The first RV manufacturer
to bring this  chassis to market,  National RV debuted  this chassis in the 2002
Dolphin. These models are full-basement,  bus-style motorhomes.  All models have
automatic  double  slide-out (one model offers triple  slide-out)  features that
expand the interior of the  motorhomes  and add  additional  living  space.  The
Dolphin LX is an upgraded Dolphin, offering certain distinct features,  exterior
styling and floorplans.  Many optional  Dolphin  features become standard on the
Dolphin  LX,  and the LX  features  many  items not  available  on the  standard
Dolphin.   Many  items  found  on  the  Dolphin  LX  are  usually  reserved  for
higher-priced diesel motorhomes. The Dolphin products are produced in 32' to 38'
lengths.  Suggested retail prices for the Dolphin start at $110,000. The Class A
Dolphin motorhome was first introduced in 1985.

     Sea Breeze.  The Sea Breeze is a moderately  priced,  bus-style  motorhome,
built on a Ford gas-powered  chassis.  A full-height  motorhome,  the Sea Breeze
offers  considerable   basement  storage.  The  Sea  Breeze  features  Corian(R)
countertops,  power heated side-view  mirrors,  deluxe trim and heated water and
waste holding tanks. The Sea Breeze offers floorplans ranging from 30' to 34' in
length.  Also  offered  under the Sea Breeze  name is the Sea Breeze LX. The Sea
Breeze LX includes  automatic double slide-out features that expand the interior
of the  motorhomes  and create  additional  living  space,  in  addition to many
upgrades not available in the standard Sea Breeze.  The Sea Breeze LX models are
produced in 31' to 34' lengths. Suggested retail prices for the Sea Breeze start
at $85,000. The Class A Sea Breeze product was introduced in 1992.

     Palisades  Fifth-Wheel  Travel Trailer.  The Palisades  fifth-wheel  travel
trailer  comes  in  four,  triple-slide  floorplans  ranging  from 33' to 36' in
length.  All  floorplans  feature a choice of oak or maple  interiors,  and many
other  amenities.  Suggested  retail prices start at $64,000.  The Palisades was
first introduced in 1999.

     Sea Breeze  Fifth-Wheel  Travel Trailer.  The Sea Breeze fifth-wheel travel
trailer comes in three floorplans  equipped  similar to a Sea Breeze  motorhome.
All floorplans  feature standard living room and bedroom slide-out  sections and
are produced in 33' to 36' lengths.  Suggested  retail  prices start at $55,000.
The Sea Breeze fifth-wheel trailer was originally introduced in 1995.

     Blaze'n Travel Trailer.  The Blaze'n is a dual purpose  conventional travel
trailer  and  contains  capacity  for  hauling  ATVs or small  watercraft  while
providing all of the comfort and roominess of a full-size RV.  Suggested  retail
prices for the Blaze'n start at $26,000.  The Blaze'n was originally  introduced
in 2001.

     Rage'n  Travel  Trailer.  The  Rage'n is a ramp  travel  trailer  with both
conventional  and fifth-wheel  models and features an impressive  cargo capacity
that permits the hauling of ATVs or small  watercraft.  Suggested  retail prices
for the Rage'n start at $16,000. The Rage'n was first introduced in 2000.

     Surf Side Lite.  The Surf Side Lite is a  lightweight;  entry level trailer
designed to be easily  pulled by popular SUVs or  light-duty  trucks.  Surf Side
Lite models are produced in 23' to 30' lengths. Select models include slide-outs
in addition to comforts and conveniences  such as a full galley,  bedroom,  bath
and  dining  area.  Suggested  retail  prices  for the Surf Side  Lite  start at
$16,000. The Surf Side Lite was recently introduced in 2002.

     Splash Travel  Trailer.  The Splash is an  entry-level  travel  trailer and
offers both  conventional  and  fifth-wheel  models.  The Splash was designed to
allow  families  to enjoy  the great  outdoors  with  ease and  offers  standard
features  such as a one-piece  fiberglass  shower,  raised panel solid  hardwood
cabinet doors and a full galley. Suggested retail prices for the Splash start at
$13,000. The Splash Travel Trailer was originally introduced in 2000.

Planned Product Introductions

     During 2003,  the Company  plans to  introduce  new  floorplans  and lounge
slides in its existing  products to target  certain market niches not previously
represented.  As mentioned before, the Company also plans to begin producing the
new Inspire motorhome at its Junction City facility in spring 2003.

                                       8
<PAGE>

Distribution and Marketing

     The Company  markets NRV  products  through a network of  approximately  80
Class A and 67 towable dealer  locations in 35 states and Canada.  These dealers
generally carry all or a portion of NRV's product lines along with  competitors'
products.  The Company  markets CCI products  through 21 dealer  locations in 13
states.  Overall, the Company markets its NRV and CCI products through a network
of  approximately  168 distinct  dealer  locations in 37 states and Canada.  CCI
utilizes a limited dealer network for its Highline motorhomes due to the selling
expertise  required,  the high level of  knowledge  needed by the  dealer  sales
people and the tendency of Highline customers to make destination-type purchases
at shows and  rallies.  The  Company  believes  that each of the CCI dealers has
significant  experience  with  top-of-the-line   products  and  has  outstanding
facilities and service programs.

    The Company  generally  promotes  its products  through  visits to dealers,
attendance at industry shows,  direct mail promotions,  company web sites, plant
tours,  corporate  newsletters,  press  releases,  trade and  consumer  magazine
advertising,  RV owner  rallies  that  includes  limited free  service,  and its
in-house magazine publication. From time to time, the Company also offers dealer
or consumer incentives.  In addition,  to help promote customer satisfaction and
brand loyalty,  the Company sponsors  Islanders and Country Coach  International
clubs for owners of the Company's  products.  The clubs publish newsletters on a
monthly or  quarterly  basis and organize RV rallies and other  activities.  The
Company  continually  seeks  consumer  preference  input from  several  sources,
including  dealers,  RV owners and the Company's sales  representatives  and, in
response,  the Company implements  changes in the design,  decor and features of
its  products.  The  Company's  website also offers an extensive  listing of the
Company's models,  floor plans and features,  including  "virtual tours" of some
models.

     Substantially  all of the  Company's  motorhome  sales  are  made on  terms
requiring payment within 15 business days or less of the dealer's receipt of the
unit. Most dealers finance all, or  substantially  all, of the purchase price of
their inventory under "floor plan"  arrangements with banks or finance companies
under which the lender  pays the Company  directly.  Dealers  typically  are not
required to commence  loan  repayments  to such lenders for a period of at least
six months. The loan is collateralized by a lien on the vehicle. Consistent with
industry practice, the Company has entered into repurchase agreements with these
lenders.  In general,  the  repurchase  agreements  provide  that the Company is
required to repurchase a unit after the unit is financed and the dealer defaults
on the financing.  Certain of these agreements limit the Company's  liability to
12 to 18 months after the date of invoice of the unit. At December 31, 2002, the
Company's  contingent  liability under these agreements was approximately $103.9
million.  The risk of loss under such agreements is spread over numerous dealers
and lenders and is further  reduced by the resale  value of the  motorhomes  the
Company  would be required  to  repurchase.  The  Company's  losses  under these
agreements have not been material in the past.

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

Manufacturing Facilities and Production

     The  Company  owns  and  operates   manufacturing   facilities  in  Perris,
California  and  Junction   City,   Oregon  plus  a  10-bay  service  and  parts
distribution  center  in  Lakeland,  Florida.  NRV  products  are  designed  and
manufactured  in  facilities   encompassing   607,000  square  feet  located  on
approximately 49 acres in Perris.  CCI products are designed and manufactured in
facilities encompassing 409,000 square feet located on approximately 69 acres in
Junction City.

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

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

                                       9
<PAGE>

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

Arrangements with Chassis Suppliers

     The Company's NRV subsidiary  purchases  gasoline-powered  chassis that are
manufactured by Ford Motor Company and Workhorse Custom Chassis, and rear engine
diesel-powered  chassis from Freightliner  Custom Chassis  Corporation,  Spartan
Motor  Corporation,  and from the  Company's  own Junction  City  facility.  The
Company's CCI subsidiary  manufactures  its own chassis,  the DynoMax,  which is
used as the base upon which all CCI motorhomes are built, except for the Prevost
Conversions, which utilize a Prevost bus shell. Except for the Prevost bus shell
that is purchased on extended terms,  the Company's  agreements with the chassis
suppliers  generally  provide  that the  Company  must pay for a chassis in full
prior to making  any  alterations  or  additions  to the  chassis.  The  chassis
purchase  agreements  further  provide  that  either  party  may  terminate  the
agreement at any time. In the event of such  termination,  the Company may incur
certain  financing  and other costs in order to  maintain an adequate  supply of
chassis. The Company generally maintains a one to two month production supply of
a chassis in inventory.  If any of the Company's  present chassis  manufacturers
were to cease  manufacturing  or  otherwise  reduce  the  availability  of their
chassis, the business of the Company could be adversely affected.  The industry,
as a whole, from time to time, experiences short-term shortages of chassis.

Product Development

     The Company utilizes  research and development  staff that  concentrates on
product development and enhancements.  New ideas are presented to the staff from
management  and  are  derived  from  a  variety  of  sources,   including  sales
representatives, dealers and consumers. The staff utilizes computer-aided design
equipment and techniques to assist in the  development of new products and floor
plans and to analyze suggested  modifications of existing products and features.
After the initial  step of  development,  prototype  models for new products are
constructed and refined.  In the case of modifications to certain features,  new
molds for various parts,  such as front-end caps,  storage doors, and dashes are
produced and tested.  New product  prototypes are produced both off-line as well
as directly on the production line. The Company believes that the maintenance of
an  in-house  research  and  development  staff  enables  the Company to respond
rapidly to  ongoing  shifts in  consumer  tastes and  demands.  Total  research,
development and engineering expenses were $5,419,000,  $6,195,000 and $5,973,000
for the years ended  December 31, 2002,  2001 and 2000,  respectively,  of which
research  and  development  expenses  alone  were  $1,359,000,   $1,721,000  and
$2,161,000, respectively.


Backlog

     The  Company's  backlog of orders was $80.7 million as of March 1, 2003 and
$80.1  million  as  of  March  1,  2002.  All  backlog  orders  are  subject  to
cancellation or postponement  at the option of the dealer without  penalty,  and
therefore,  backlog  should  not be used as a measure  of future  sales.  To the
extent not  canceled or  postponed,  the Company  expects that its backlog as of
March 1, 2003 will be filled within 45 to 90 days.

Competition

     The  motorhome  market  is  intensely  competitive,  with a number of other
manufacturers selling products that compete with those of the Company. According
to  Statistical  Surveys,  Inc., the three leading  manufacturers  accounted for
approximately  56.9%  and  55.9%  of  total  retail  units  sold in the  Class A
motorhome market during 2002 and 2001, respectively. These companies and certain
other competitors have substantially  greater financial and other resources than
the Company.  Sales of used motorhomes also compete with the Company's products.
The Company competes on the basis of value, quality, price and design. According
to Statistical  Surveys,  Inc., the Company's Class A retail market share of new
product sales was 5.5%, 6.7% and 7.4% in 2002, 2001 and 2000, respectively.

                                       10
<PAGE>

Regulation

     The Company is subject to federal,  state and local  regulations  governing
the  manufacture  and sale of its  products,  including  the  provisions  of the
National  Traffic and Motor Vehicle Safety Act (the "Motor  Vehicle  Act"),  the
Transportation  Recall  Enhancement,  Accountability  and Documentation Act (the
"TREAD" Act) and the Federal Motor Vehicle Safety Standards  ("FMVSS").  Certain
states require approval of coach designs and provide  certification tags proving
compliance  before  coaches can be sold into that state.  The Motor  Vehicle Act
authorizes  the National  Highway  Traffic  Safety  Administration  ("NHTSA") to
require a manufacturer to recall and repair vehicles that contain safety defects
or fail to comply with the FMVSS.  In addition,  the Company  has,  from time to
time,  instituted  voluntary  recalls of certain  motorhome  and towable  units.
Future recalls of the Company's products,  if any, could have a material adverse
effect on the  Company.  The Company is also  subject to some  federal and state
consumer  protection and unfair trade practice laws and regulations  relating to
the sale,  transportation and marketing of motor vehicles,  including  so-called
"Lemon Laws."  Federal and state laws and  regulations  also impose upon vehicle
operators  various  restrictions  on the  weight,  length  and  width  of  motor
vehicles,  including  trucks and  motorhomes,  that may be  operated  in certain
jurisdictions or on certain roadways.  Certain  jurisdictions  also prohibit the
sale of  vehicles  exceeding  length  restrictions.  Amendments  and  changes in
enforcement with respect to these laws and regulations and the implementation of
new  laws  and   regulations   could   significantly   increase   the  costs  of
manufacturing, purchasing, operating or selling the Company's products and could
have a material adverse effect on the Company's business,  results of operations
and financial condition.

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

     Federal and state authorities have various  environmental control standards
relating to air, water,  and noise pollution and hazardous waste  generation and
disposal  that affect the business and  operations  of the Company.  The Company
believes that its facilities and products  comply in all material  respects with
applicable environmental  regulations and standards. The Company is also subject
to  the  regulations   promulgated  by  the   Occupational   Safety  and  Health
Administration   ("OSHA"),   which   regulate   workplace   health  and  safety.
Representatives of OSHA and the RVIA periodically inspect the Company's plants.

Product Warranty

     The Company  provides  retail  purchasers of its motorhomes  with a limited
warranty  against  defects  in  materials  and  workmanship.  Excluded  from the
Company's warranties are chassis manufactured by third parties and certain other
specified  components  that are  warranted by the  Company's  suppliers of these
items.  Service  covered by warranty  must be performed at either the  Company's
in-house  service  facility  or any of its dealers or other  authorized  service
centers. The warranty terms are as follows:

    o CCI  motorhomes  - One year
    o NRV  motorhomes  - One year or 18,000 miles
    o DynoMax chassis  - Two years
    o Travel trailers and Fifth wheels - Two years
    o CCI Structural welding - Five years or 50,000 miles

     The  Company's  warranty  reserve was $11.8  million at December  31, 2002,
which the Company believes is sufficient to cover warranty claims.

Intellectual Property

     NRV's Dolphin, DuraFrame, Islander, Marlin, Palisades, Sea Breeze, Sea View
National R.V. (Logo), Sea View,  Splash,  Surf Side,  Tradewinds,  and Tropi-Cal
trademarks,  and CCI's Affinity, Allure, Concept, Country Camper, Country Coach,
Country  Coach  Destinations,  DynoMax,  Great Room,  Intrigue,  Magna,  and Max
trademarks are registered with the United States Patent and Trademark Office and
are material to the Company's  business.  The Company has additional  trademarks
filed and pending  registration.  In  addition,  the  Company has three  patents
covering RV subfloors and exterior doors.

                                       11
<PAGE>

Product Liability and Insurance

     From time to time,  the Company is involved in certain  litigation  arising
out of its  operations  in the normal  course of business.  Accidents  involving
personal injuries and property damage occur from time to time in the use of RVs.
The Company maintains product liability  insurance in amounts deemed adequate by
management.  To date,  aggregate  costs to the  Company  for  product  liability
actions have not been material.

Employees

     As of February 14, 2003, the Company  employed a total of 2,177 people,  of
which  1,970  were  involved  in  manufacturing,  66  in  administration,  81 in
research,  development and engineering,  and 60 in sales and marketing.  None of
the Company's  personnel are represented by labor unions.  The Company considers
its relations with its personnel to be good.

Item 2. Properties

     The  Company  owns  and  operates   manufacturing   facilities  in  Perris,
California and Junction City, Oregon City plus a service and parts  distribution
center in Lakeland,  Florida.  NRV products  are  designed and  manufactured  in
facilities encompassing 607,000 square feet located on approximately 49 acres in
Perris.  CCI products are designed and  manufactured in facilities  encompassing
409,000  square  feet  located on  approximately  69 acres in Junction  City.  A
portion of CCI's  facilities  representing  298,000  square feet is being leased
under an agreement  expiring in October 2005  (currently  in the second of three
separate five-year lease periods,  all at fair market value. The Company has the
option to extend the agreement to the final five-year period).

     The Company believes that present  facilities are well maintained,  in good
condition  and will be sufficient to meet its  production  requirements  for the
foreseeable future.

Item 3.  Legal Proceedings

     The Company is  involved in legal  proceedings  in the  ordinary  course of
business,  including a variety of  warranty,  "lemon law" and product  liability
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,  results  of
operations or financial condition of the Company.

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

         None.


                                       12

<PAGE>

                                     PART II

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

     The Company's  Common Stock, par value $.01 per share (the "Common Stock"),
has been  trading  on the New York  Stock  Exchange  under the  symbol NVH since
December  14, 1998.  From  September  30, 1993 to December  13, 1998,  the stock
traded on the NASDAQ National Market under the symbol NRVH.  Prior to that time,
there was no public market for the Common Stock.

                2002                 High              Low
         First Quarter....        $ 12.75           $  8.65
         Second Quarter...          14.10             10.00
         Third Quarter....          11.70              6.15
         Fourth Quarter...           7.52              4.77


                2001                 High              Low
         First Quarter...         $ 13.78           $  8.42
         Second Quarter..           15.10              7.94
         Third Quarter...           15.10              8.50
         Fourth Quarter..           10.14              7.80


     On March 14,  2003,  the last  reported  sales  price for the Common  Stock
quoted on the New York Stock Exchange was $4.95 per share. As of March 14, 2003,
there were approximately 76 record holders of Common Stock. Such number does not
include  persons whose shares are held of record by a bank,  brokerage  house or
clearing  agency,  but does  include such banks,  brokerage  houses and clearing
agencies.

Dividends

     The Company has not paid any cash dividends or  distributions on its Common
Stock and has no  intention  to do so in the  foreseeable  future.  The  Company
presently intends to retain earnings for general corporate  purposes,  including
business  expansion,   capital  expenditures  and  possible  acquisitions.   The
declaration  and payment of future  dividends will be at the sole  discretion of
the Board of Directors and will depend on the Company's profitability, financial
condition,  capital needs, future prospects and other factors deemed relevant by
the Board of Directors. The current credit agreement, which the Company has with
UPS Capital Corporation, does restrict the declaration and payment of dividends.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

Item 6.  Selected Financial Data

     The  following  selected  consolidated  financial  data  are  qualified  by
reference to, and should be read in conjunction with, the Company's Consolidated
Financial  Statements and the notes thereto,  and  "Management's  Discussion and
Analysis of Financial  Condition and Results of Operations"  contained elsewhere
herein.  The selected  income  statement  data for the years ended  December 31,
2002, 2001 and 2000 and the selected  balance sheet data as of December 31, 2002
and  2001  are  derived  from  the  Company's  audited  consolidated   financial
statements that are included  elsewhere  herein.  The selected income  statement
data for the years ended December 31, 1999 and 1998 along with the balance sheet
data as of  December  31,  2000,  1999  and 1998 are  derived  from the  audited
consolidated financial statements of the Company which are not included herein.

                                       13

<PAGE>

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION
                (In thousands, except per share and unit amounts)

                                         Years Ended December 31,
                           -----------------------------------------------------
                            2002        2001       2000       1999       1998
                           ------      ------     ------     ------     ------
Operations Data:
Net sales .............  $ 300,251   $ 280,015   $348,846  $ 419,421  $ 360,326
Cost of sales .........    302,483     275,648    308,216    348,592    302,098
                          ---------   ---------   --------  ---------  ---------
  Gross profit ........     (2,232)      4,367     40,630     70,829     58,228
Selling expenses ......     14,492      14,068     14,111     11,437     11,154
General and admin-
  istrative expenses ..      8,176       8,765      9,138      7,214      6,586
Amortization of
  intangibles .........      6,126         413        413        413        413
                          ---------   ---------   --------  ---------  ---------
  Operating (loss)
    income ............    (31,026)    (18,879)    16,968     51,765     40,075
Interest (income)
  expense, net ........       (240)       (420)    (1,200)    (1,379)      (280)
Other financing
  related costs .......          -           -          -          -        213
Loss (gain) on
  disposal of land
  and equipment .......       (355)        (71)       135       (432)         -
                          ---------   ---------   --------  ---------  ---------
  (Loss) income before
    income taxes and
    cumulative effect
    of change in
    accounting
    principle .........    (30,911)    (18,388)    18,033     53,576     40,142
(Benefit) provision
  for income taxes ....     (9,489)     (6,927)     6,864     20,625     16,033
                          ---------   ---------   --------  ---------  ---------
  (Loss) income before
    cumulative effect
    of accounting
    change ............    (21,422)    (11,461)    11,169     32,951     24,109
Cumulative effect of
  change in accounting
  principle,
  net of tax ..........          -           -     (1,213)         -          -
  Net (loss) income ...  $ (21,422)  $ (11,461)  $  9,956   $ 32,951   $ 24,109

Basic (loss) earnings
  per common share:
  (Loss) income before
    cumulative effect
    of accounting
    change ............   $  (2.19)    $  (1.18)   $   1.14    $  3.16  $  2.35
  Cumulative effect of
    accounting change .          -            -       (0.12)         -        -
                          ---------   ----------   ---------  --------- --------
    Net (loss) income .   $  (2.19)    $  (1.18)   $   1.02    $  3.16  $  2.35
                          =========   ==========  ==========  ========= ========
Diluted (loss) earnings
  per common share:
  (Loss) income before
    cumulative effect
    of accounting
    change ............   $  (2.19)       (1.18)  $   1.11     $  2.95  $  2.11
  Cumulative effect of
    accounting change .         -           -        (0.12)        -          -
                          ---------   ----------   ---------  --------- --------
    Net (loss) income .   $  (2.19)    $  (1.18)  $   0.99     $  2.95  $  2.11
                          =========   ==========  ==========  ========= ========
Weighted average number
  of common shares
  outstanding:
  Basic ...............      9,788       9,683       9,743      10,430   10,263
  Diluted .............      9,788       9,683      10,086      11,178   11,423

Other Data:
Class A units sold ....      1,919       1,957       2,852      3,951     3,652
Travel Trailers sold ..      1,609       1,400         553        431       410

                                                December 31,
                            2002        2001       2000       1999       1998
                           ------      ------     ------     ------     ------
Balance Sheet Data:
Total assets .......... $ 145,244   $ 163,094   $ 155,674   $159,214  $ 117,739
Working capital .......    53,046      65,529      76,063     91,916     63,480
Long-term debt ........        19          43          64         84      1,700
Stockholders' equity ..    94,165     114,412     125,293    130,566     94,489

                                       14

<PAGE>

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

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

Critical Accounting Policies

     Financial Reporting Release No. 60, released by the Securities and Exchange
Commission,   requires  all  companies  to  include  a  discussion  of  critical
accounting policies or methods used in the preparation of financial  statements.
Note 1 of the Notes to the Consolidated  Financial Statements includes a summary
of the  significant  accounting  policies and methods used in the preparation of
the  Company's  Consolidated  Financial  Statements.  The  following  is a brief
discussion  of the more  critical  accounting  policies  and methods used by the
Company.

     Long-Lived  Assets.  The Company reviews  long-lived  assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset might not be recoverable. If indicators of impairment were present, the
Company  would  evaluate  the  carrying  value of  property  and  equipment  and
intangibles,  in relation to estimates of future  undiscounted cash flows of the
underlying business, which are based on judgment and assumptions.

     Warranty.  The Company's  warranty reserve is established based on its best
estimate  of the  amounts  necessary  to settle  future and  existing  claims on
products sold as of the balance sheet date. The Company  records an estimate for
future  warranty-related costs based on recent actual warranty claims. Also, the
Company's  recall reserve is  established,  as necessary,  based on management's
estimate of the cost per unit to remedy the problem and the estimated  number of
units that will  ultimately  be brought in for the repair.  While the  Company's
warranty costs have historically been within its expectations and the provisions
established,  the Company  cannot  guarantee that it will continue to experience
the same  warranty  costs that it has in the past.  A  significant  increase  in
dealer shop rates,  the cost of parts or the  frequency  of claims  could have a
material  adverse  impact on the Company's  operating  results for the period or
periods in which such claims or additional costs materialize.

     Revenue  Recognition.  Beginning with the year 2000, motorhome and towables
sales are recorded by the Company when accepted by the dealer rather than at the
time of shipment as in earlier  years.  This change in accounting  principle was
made to implement SEC Staff  Accounting  Bulletin No. 101 (SAB 101), as amended.
SAB 101  requires  that four basic  criteria  must be met before  revenue can be
recognized:  (1) persuasive  evidence of an arrangement exists; (2) delivery has
occurred or services  rendered;  (3) the fee is fixed and determinable;  and (4)
collectibility  is  reasonably  assured.  Should  changes  in  conditions  cause
management  to  determine   these  criteria  are  not  met  for  certain  future
transactions,  revenue  recognized  for any reporting  period could be adversely
affected.

     Legal  Proceedings.  The Company is  currently  involved  in certain  legal
proceedings  and  has  accrued  its  estimate  of the  probable  costs  for  the
resolution of these claims.  This  estimate has been  developed in  consultation
with counsel  handling the Company's  defense in these matters and is based upon
an analysis of potential  results,  assuming a  combination  of  litigation  and
settlement strategies.

                                       15

<PAGE>

Results of Operations

     The following table sets forth for the periods  indicated the percentage of
net sales  represented by certain items reflected in the Company's  Consolidated
Statement of Income:

                                             Percentage of Net Sales
                                             Years Ended December 31,
                                   ------------------------------------------
                                        2002        2001           2000
                                   -------------  -----------  --------------

Net sales....................          100.0%      100.0%           100.0%
Cost of sales................          100.7        98.5             88.4
                                   -------------  -----------  --------------
Gross profit.................           (0.7)        1.5             11.6
Selling......................            4.8         5.0              4.0
General and administrative...            2.7         3.1              2.6
Amortization of intangibles..            2.0         0.1              0.1
                                   -------------  -----------  --------------
Operating (loss) income......          (10.3)       (6.7)             4.9
Interest (income)............           (0.1)       (0.2)            (0.3)
Other........................            0.1         0.0              0.0
                                   -------------  -----------  --------------
(Loss) income before income
taxes and cumulative effect
of change in accounting
method.......................          (10.3)       (6.5)             5.2
(Benefit) provision for
income taxes.................           (3.2)       (2.4)             2.0
                                   -------------  -----------  --------------
(Loss) income before
cumulative effect of change
in accounting method.........           (7.1)       (4.1)             3.2
Cumulative effect of change
in accounting method.........              -           -             (0.3)
                                   -------------  -----------  --------------
Net (loss) income............           (7.1)       (4.1)             2.9
                                   -------------  -----------  --------------

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

     Net sales in 2002  increased by $20.3 million to $300.3  million,  or 7.3%,
from $280.0  million in 2001.  NRV's sales of Class A  motorhomes  increased  14
units,  or 0.9%, in 2002 to 1,503 units  compared to 1,489 units in 2001,  while
the average sales price increased 14.8%. CCI's unit sales decreased 52 units, or
11.1%,  in 2002 to 416 units  compared  to 468 units in 2001,  while the average
price of these units increased  17.1%.  Sales of travel  trailers  increased 209
units, or 14.9%,  in 2002 to 1,609 units compared to 1,400 units in 2001,  while
the average sales price of these travel trailers decreased 9.3%.

     Cost of goods sold in 2002 increased by $26.9 million to $302.5 million, or
9.8%, from $275.6 million in 2001 resulting  primarily from increased net sales.
Gross profit margin was (0.7)% in 2002 compared to 1.6% in 2001. The decrease in
gross profit margin is primarily attributable to: i) an increase in the workers'
compensation  reserve  of $3.3  million  and ii) an  increase  in the  Company's
production costs resulting from the cost of painting NRV diesel units for a full
year as  compared  to only a portion of 2001.  In  addition,  high  rebates  and
discounts  to  dealers,  as well as  manufacturing  inefficiencies,  continue to
hamper production levels.

     Selling  expenses in 2002  increased by $0.4 million to $14.5  million,  or
2.8% from $14.1 million in 2001. As a percentage of net sales,  selling expenses
decreased  to 4.8% in 2002 from 5.0% in 2001 due to higher  sales  over which to
spread the fixed selling expenses.

     General and  administrative  expenses in 2002  decreased by $0.6 million to
$8.2 million,  or 6.8%, from $8.8 million in 2001. As a percentage of net sales,
general and administrative  expenses decreased to 2.7% in 2002 from 3.1% in 2001
due to cost  reduction  initiatives  and  higher  sales over which to spread the
fixed general and administrative expenses.

     As required by SFAS 142, the Company performed interim testing for goodwill
impairment and  determined it necessary to recognize the complete  impairment of
its goodwill.  This  impairment  totaled $6.1 million in 2002. The fair value of
the reporting unit was estimated using the value of the Company, as indicated by
the recent average stock price,  apportioned to the business units and increased
by a hypothetical  control premium.  As a result of such complete  impairment of
goodwill,  there was no  amortization  of intangibles in 2002.  Amortization  of
intangibles was $0.4 million in 2001.

                                       16


<PAGE>

     As a result of the  foregoing,  2002 resulted in an operating loss of $31.0
million, compared to an operating loss of $18.9 million in 2001. As a percentage
of net sales, operating loss was (10.3)% in 2002 compared with (6.7)% in 2001.

     Other income, which includes net interest income, decreased by $0.4 million
to $0.1 million in 2002 from $0.5 million in 2001,  primarily as a result of the
Company  becoming a net cash  borrower in 2002 from a net cash investor in 2001,
partially  offset by the  realization in 2002 of a $0.3 million gain on the sale
of the Company's airplane.

     Benefit  for  income  taxes  in  2002  was  $9.5  million;  reflecting  tax
recoveries  from the carryback of current year losses,  while benefit for income
taxes in 2001 was $6.9 million,  representing a $2.6 million increase. Excluding
the  impairment  of goodwill,  which is not  deductible  for tax  purposes,  the
effective tax rate in 2002 was 38.3% compared to 38.5% in 2001.

     Based  on the  above,  2002  resulted  in a net  loss of  $(21.4)  million,
compared to a net loss of $(11.5)  million in 2001,  an increase in the net loss
of $9.9  million.  As a  percentage  of net sales,  net loss was (7.1)% in 2002,
compared with a (4.1)% loss in 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

     Net sales in 2001 decreased by $68.8 million to $280.0  million,  or 19.7%,
from $348.8  million in 2000.  The decline in sales  reflected an  industry-wide
slowdown in 2001 in consumer demand for  recreational  vehicles.  NRV's sales of
Class A  motorhomes  decreased  792  units,  or  34.7%,  in 2001 to 1,489  units
compared to 2,281 units in 2000,  while the average sales price  increased 4.0%.
The decline in unit sales during 2001 was  partially  due to NRV's  inability to
meet demand for its painted  diesel  coaches due to restraints on paint capacity
as well as a product  shift to higher  price  diesel  units.  CCI's  unit  sales
decreased  103 units,  or 18.0%,  in 2001 to 468 units  compared to 571 units in
2000,  while the average price of these units  increased  5.5%.  Sales of travel
trailers  increased 847 units, or 153.2%, in 2001 to 1,400 units compared to 553
units in 2000, while the average sales price of these travel trailers  decreased
33.9%.  The  increase  in unit sales and  decrease  in  average  price of travel
trailers reflects NRV's offering of additional  entry-level  towable products in
2001.

     Cost of goods sold in 2001 decreased by $32.6 million to $275.6 million, or
10.6%, from $308.2 million in 2000 resulting primarily from decreased net sales.
Gross profit margin was 1.6% in 2001 compared to 11.6% in 2000.  The decrease in
gross  profit  margin  was due  primarily  to (i)  manufacturing  inefficiencies
attributable to operating at reduced production levels and NRV's switch to paint
on all diesel  products,  (ii) high discounts and rebates as  manufacturers  and
dealers  continued to adjust inventory  levels to lower sales levels,  and (iii)
increased warranty expense including expanded warranty reserves and recalls.

     Selling expenses in 2001 and 2000 were relatively flat at $14.1 million. As
a percentage of net sales,  selling expenses increased to 5.0% in 2001 from 4.0%
in 2000 due to lower sales over which to spread the fixed selling expenses.

     General and  administrative  expenses in 2001  decreased by $0.3 million to
$8.8 million,  or 3.3%, from $9.1 million in 2000. As a percentage of net sales,
general and administrative  expenses increased to 3.1% in 2001 from 2.6% in 2000
due to lower  sales over which to spread the fixed  general  and  administrative
expenses.

     Amortization of intangibles was $0.4 million in 2001 and 2000.

     As a result of the  foregoing,  2001 resulted in an operating loss of $18.9
million,  compared to operating income of $17.0 million in 2000. As a percentage
of net sales,  operating  loss was (6.7)% in 2001 compared  with 2000  operating
income, which represented 4.9% of 2000 net sales.

     Other income, which includes net interest income, decreased by $0.6 million
to $0.5 million in 2001 from $1.1 million in 2000.


     Benefit  for  income  taxes  in  2001  was  $6.9  million,  reflecting  tax
recoveries from the carryback of current year losses, while provision for income
taxes in 2000 was $6.9  million,  representing  a $13.8  million  decrease.  The
effective tax rate in 2001 was 37.7% compared to 38.1% in 2000.

                                       17

<PAGE>

     In 2000,  the Company  recorded a one-time  adjustment  for the  cumulative
effect of change in accounting  method on prior years'  earnings  related to the
timing of revenue  recognition.  The impact of this  adjustment on 2000 earnings
was $1.2 million.

     Based  on the  above,  2001  resulted  in a net  loss of  $(11.5)  million,
compared to net income of $10.0 million in 2000, a decrease of $21.5 million. As
a percentage of net sales,  net loss was (4.1)% in 2001,  compared with 2000 net
income, which represented 2.9% of 2000 net sales.

Liquidity and Capital Resources

     During  the  first  half of  2002,  the  Company  financed  its  operations
primarily through its existing working capital.  In August,  the Company entered
into an asset based borrowing  agreement  described below for a small portion of
its working capital needs. On December 31, 2002, the Company had working capital
of $53.0 million  compared to $65.5 million at December 31, 2001.  This decrease
of $12.5 million was primarily due to a $12.9 million  decrease in inventory,  a
$6.5 million  decrease in accounts  receivable,  and a $6.8 million  increase in
accrued  expenses,  partially  offset by a $16.0  million  decrease  in accounts
payable.  Net cash used in  operating  activities  was $4.5 million for the year
ended December 31, 2002.

     For the year ended December 31, 2002, net cash used in investing activities
was $1.6 million, with $4.4 million of capital expenditures being offset by $2.8
million in proceeds  from the sale of assets.  Net cash  provided  by  financing
activities was $6.0 million,  mainly due to a $4.9 million advance on a new line
of credit and $1.1 million in proceeds from issuance of common stock through the
exercise of stock options.

     For the year ended  December 31, 2002,  the Company  incurred a net loss of
$(21.4)  million  resulting in negative cash flows from operating  activities of
$(4.5) million and a reduction to working  capital of $(12.5)  million.  The net
loss was mainly  attributable to: i) the recognition of the complete  impairment
of the Company's goodwill,  ii) continued  significant  discounting to wholesale
distributors,  iii)  continued  high warranty  costs,  iv) excess  manufacturing
capacity  and  related  fixed  costs  caused by  continued  low volumes and v) a
workers' compensation reserve increase.

     As of December  31, 2002,  the Company had  additional  short-term  debt of
$22,000 and long-term debt of $19,000.

     In addition,  the Company has an asset-based  revolving  credit facility of
$15,000,000 with UPS Capital Corporation (UPSC), of which $5,310,077 is reserved
for a letter-of-credit, required by the State of California, serving as security
for NRV's self-insured  workers'  compensation program and $325,848 reserved for
another contingent liability.  The remaining $9,364,075 is available for general
corporate  and working  capital needs and capital  expenditures.  On February 6,
2003,  the  Company  and  UPSC  entered  into  a  loan  modification  agreement,
increasing the credit  facility to $20,000,000 for a 120-day period to support a
short-term  buildup in inventory  for the 1st quarter 2003 show season.  Amounts
borrowed  under the  revolving  credit  facility bear interest at the prime rate
listed in the Wall  Street  Journal  plus 0.75  percentage  points.  The  credit
facility  contains,   among  other  provisions,   certain  financial  covenants,
including  net  worth  requirements.   At  December  31,  2002,  $4,942,629  was
outstanding  under this  facility  and the Company  was not in default  with any
covenants of its loan agreement with UPSC.

     The Company's  consolidated financial statements have been presented on the
basis  that  it  will  continue  as  a  going-concern,  which  contemplates  the
realization of assets and the  satisfaction  of liabilities in the normal course
of business.  The Company has suffered net losses of $21,422,000 and $11,461,000
and recorded  net income of  $9,956,000  for the years ended  December 31, 2002,
2001 and 2000, respectively. The Company has used cash from operating activities
of  $4,444,000,  $12,630,000  and provided  cash from  operating  activities  of
$26,330,000 for the years ended December 31, 2002, 2001 and 2000, respectively.

     The Company has funded its financial needs primarily through operations and
its existing line of credit. At December 31, 2002, the Company had cash and cash
investments of $14,000 and working capital of  $53,058,000.  The Company remains
dependent  upon its  ability to obtain  outside  financing  either  through  the
issuance of additional shares of its common stock or through borrowings until it
achieves  sustained  profitability  through a combination of increased sales and
improved product margins.

                                       18

<PAGE>

     Management intends to continue or start a variety of initiatives to improve
its  working   capital   position,   including  i)  new  product  and  floorplan
introductions  in the  fourth  quarter  2002  with  an  additional  new  product
introduction  in second  quarter 2003,  ii) certain  product  re-pricing to more
competitive  levels, iii) the continuation of 2002 discounts and rebates offered
to help move older  dealer  inventory,  freeing  financing  for new models  that
should  improve  retail  turns,  iv)  head  count   rebalancing  to  sustainable
production  levels,  v) an  engineering  review of material  components  for the
removal of  non-value  added items to reduce both  material  costs and  assembly
steps, vi) continued focus on improving quality through thorough inspections and
timely reporting of failures, vii) manufacturing efficiency improvements through
longer lead times for production increases allowing better training of new hires
to the direct work force,  viii)  non-producing  asset  dispositions such as raw
property in Florida,  ix) pursuit of a permanent increase in the line-of credit,
x) a substantial  reduction in all  categories of inventory and xi) filing for a
federal income tax refund of approximately  $7.5 million.  The Company's success
in  execution  of  these  initiatives  will  have a  significant  impact  on the
Company's liquidity during 2003.

     The Company believes the combination of internally generated funds, working
capital,  and  unused  borrowing  availability  will be  sufficient  to meet the
Company's planned capital and operational  requirements for at least the next 12
months.  Should the Company require further  capital  resources  during 2003, it
would most likely address such requirement through a combination of sales of its
products,  sales of equity  securities,  and/or  additional debt financings.  If
circumstances  changed,  and additional  capital was needed, no assurance can be
given  that  the  Company  would  be  able to  obtain  such  additional  capital
resources.

     If  unexpected  events  occur  requiring  the Company to obtain  additional
capital  and it is  unable to do so,  it then  might  attempt  to  preserve  its
available  resources  by  deferring  the  creation  or  satisfaction  of various
commitments,  deferring  the  introduction  of  various  products  or entry into
various markets,  or otherwise scaling back its operations.  If the Company were
unable to raise such  additional  capital or defer  certain  costs as  described
above,  such inability  would have an adverse effect on the financial  position,
results of operations, cash flows and prospects of the Company.

     The following is a schedule as of December 31, 2002 of the Company's  known
contractual obligations for the periods presented below.

Contractual  Obligations
(in thousands)
                                     Less than      1-3        4-5     After 5
Contractual Obligations     Total     1 Year       Years      Years     Years
                           -----------------------------------------------------
Long-term Debt.......... $     41     $      22      $    19      $ -        -
Capital Leases..........        -             -            -        -        -
Operating Leases.......     5,749         1,481        4,251       18        -
Line of Credit (UPS)...    15,000             -       15,000        -        -
Letters of Credit......     5,300             -        5,300        -        -
Repurchase Obligations.   103,915         3,915            -        -        -
                        --------------------------------------------------------
                         $130,005     $ 110,718      $19,270      $18        -
                        ========================================================

     The  Company  has a Line of Credit  that  totals $15  million and is set to
expire on August 29,  2005.  Of the $15 million  Line of Credit,  $5,310,077  is
reserved for a letter-of-credit, required by the State of California, serving as
security for NRV's self-insured  workers'  compensation program. As is common in
the industry,  the Company enters into repurchase  agreements with the financing
institutions  used by its  dealers to finance  their  purchases.  The  Company's
contingent  obligations  under repurchase  agreements vary from period to period
and totaled  approximately  $103.9  million as of December 31, 2002. The risk of
loss under such  agreements is spread over  numerous  dealers and lenders and is
further  reduced by the resale  value of the  motorhomes  the  Company  would be
required to repurchase.  The Company's  losses under these  agreements  have not
been material in the past.


Effects of Inflation

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

                                       19

<PAGE>

Recent Accounting Pronouncements

     In July 2001, the Financial  Accounting  Standards Board (FASB) issued SFAS
142,  "Goodwill  and Other  Intangible  Assets."  SFAS 142,  which  changes  the
accounting  for  goodwill  from an  amortization  method  to an  impairment-only
approach,  is effective for fiscal years  beginning after December 15, 2001. Due
to the recent  sustained  decline in the price of the  Company's  common  stock,
resulting  from the Company's  third quarter 2002 loss,  which was unexpected by
the market,  the Company performed  interim testing for goodwill  impairment and
determined  it necessary to recognize  the complete  impairment of its goodwill.
This  impairment  totaled $6.1 million for the quarter ended September 30, 2002.
The fair  value of the  reporting  unit was  estimated  using  the  value of the
Company,  as indicated by the recent  average  stock price,  apportioned  to the
business units and increased by a hypothetical control premium.

     In October 2001, the FASB issued SFAS 144 "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,"  which  replaces  SFAS 121,  "Accounting  for
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of."
SFAS 144 establishes one accounting model, based on the framework established in
SFAS 121,  for the  recognition,  measurement  and  reporting of  impairment  of
long-lived assets to be held and used and of long-lived assets to be disposed of
by sale.  Adoption of SFAS 144 in the Company's 2002 fiscal year did not have an
impact on the Company's consolidated financial statements.

 In November 2002, the FASB issued FASB  Interpretation No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others"  (FIN 45).  FIN 45  requires  that upon
issuance of certain  guarantees,  a guarantor must recognize a liability for the
fair value of an obligation  assumed under the  guarantee.  FIN 45 also requires
significant new disclosures, in both interim and annual financial statements, by
a  guarantor,  about  obligations  associated  with  guarantees  issued.  FIN 45
disclosure  requirements  are effective  for our fiscal year ended  December 31,
2002 and the initial recognition and measurement  provisions are applicable on a
prospective  basis to guarantees  issued or modified after December 31, 2002. At
December 31, 2002, the Company had no guarantees  outstanding  except in respect
to warranty reserves.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  - Transition  and  Disclosure."  SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based  Compensation,"  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for  stock-based  employee  compensation.  In addition,  SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee  compensation and the effect of the method used on reported
results.  The Company has not adopted the fair value based method of  accounting
for stock-based compensation, and the adoption of the disclosure requirements of
this SFAS is not expected to have a material impact on the financial statements.

Forward Looking Statements

     Statements  contained in this Form 10-K that are not  historical  facts are
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Investors  are cautioned  that  forward-looking
statements are inherently  uncertain.  Actual performance and results may differ
materially  from that  projected  or suggested  herein due to certain  risks and
uncertainties including, without limitation, factors set forth below. Additional
information  concerning risks and  uncertainties  may be identified from time to
time in the Company's  filings with the Securities and Exchange  Commission (the
SEC) and the Company's public announcements,  copies of which are available from
the SEC or from the Company upon request.

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  level of  discounting
employed  on  the  Company's   products,   the  ability  to  utilize  or  expand
manufacturing  resources efficiently,  material shortages,  the introduction and
consumer acceptance of new models offered by the Company, competition,  warranty
expense, the addition or loss of dealers, the timing of trade shows and rallies,
and factors  affecting the  recreational  vehicle  industry as a whole,  such as
cyclicality and seasonality.  In addition, the Company's overall gross margin on
its  products  will be  impacted by the  Company's  product  shifts.  Due to the
relatively  high selling  prices of many of the Company's  motorhome  models (in
particular, its Highline 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.

                                      20

<PAGE>

     Continuation  of Losses.  The  Company  has had net losses  totaling  $21.4
million and $11.5  million  for 2002 and 2001,  respectively.  Continued  losses
could  reduce  the  Company's  liquidity  and cause the  Company  to reduce  its
expenditures on capital improvements,  machinery and equipment, and research and
development.  This  could  have a negative  effect on the  Company's  ability to
maintain production schedules, manufacture products of high quality, and develop
and manufacture new products that will achieve market acceptance.  This could in
turn, have a negative impact on the Company's sales and earnings. If the Company
continues  to suffer  losses,  the  Company  could be unable  to  implement  its
business  and  financial  strategies  or meet  its  obligations  when  due.  The
Company's  losses in 2001 and 2002 were mainly caused by (i) the  recognition of
the  complete  impairment  of the  Company's  goodwill in 2002,  (ii)  continued
significant discounting to wholesale distributors, (iii) continued high warranty
costs,  (iv) excess  manufacturing  capacity  and related  fixed costs caused by
continued low volumes, and (v) a workers' compensation reserve increase in 2002.
These  factors  were  exacerbated  by weaker  general  economic  conditions  and
declining  consumer  confidence during the period.  There are no assurances that
the conditions that have resulted in the Company's  losses in 2002 and 2001 will
not continue through 2003 and beyond.

     Cyclicality,  Seasonality and Economic Conditions. The RV industry has been
characterized by cycles of growth and contraction in consumer demand, reflecting
prevailing economic conditions,  which affect disposable income for leisure-time
activities.  Concerns about the availability and price of gasoline, decreases in
consumer  confidence,  increases in interest  rates and  reductions in available
financing  have had, and may in the future have, an adverse  impact on RV sales.
Sales  of  the  Company's   products  may  be  adversely  affected  by  economic
conditions, which economic conditions may be adversely affected by the threat or
occurrence  of  armed  conflict  in Iraq or  elsewhere,  and/or  the  threat  of
terrorist attacks. Seasonal factors, over which the Company has no control, also
have an  effect  on the  demand  for the  Company's  products.  Demand in the RV
industry  declines over the winter  season,  while sales are  generally  highest
during the spring and summer months.

     Dependence  on  Certain  Dealers  and  Concentration  of Dealers in Certain
Regions. For the year ended December 31, 2002, two dealers accounted for 17% and
12%,  respectively,  of the Company's annual net sales.  Also, the Company's top
ten dealers accounted for approximately 59%, 53% and 44% of the Company's annual
net sales during the years ended December 31, 2002, 2001 and 2000, respectively.
The loss by the  Company of one or more of these  dealers  could have a material
adverse effect on the Company's  financial  condition and results of operations.
In  addition,  a  significant  portion of the  Company's  sales is from  dealers
located in states in the  western  part of the United  States.  Consequently,  a
general downturn in economic  conditions or other material events in such region
could materially adversely affect the Company's sales.

     Dependence on Chassis  Suppliers.  One of the principal  components used in
the manufacture of motorhomes is the chassis,  which includes the engine,  drive
train  and other  operating  components.  Although  Country  Coach  manufactures
chassis  used in its products  and certain NRV models,  the Company  obtains the
required chassis for most of its NRV Class A motorhomes from a limited number of
manufacturers.  As is standard in the industry, arrangements with such suppliers
permit them to terminate their  relationship  with the Company at any time. Lead
times for the  delivery  of  chassis  frequently  exceed  five  weeks and the RV
industry as a whole has from time to time  experienced  temporary  shortages  of
chassis.  If any of the Company's  suppliers were to discontinue the manufacture
of chassis utilized by the Company in the manufacture of its Class A motorhomes,
materially  reduce their  availability to the RV industry in general or limit or
terminate  their  availability  to the Company in  particular,  the business and
financial  condition of the Company could be materially and adversely  affected.
Also, the Company's top chassis suppliers accounted for approximately 50% of the
total chassis purchased through December 31, 2002.

     Potential  Liabilities  Under  Repurchase  Agreements.  As is common in the
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  purchase  a  dealer's   inventory   under   certain
circumstances in the event of a default by the dealer to its lender. The risk of
loss,  however, is spread over many dealers and is further reduced by the resale
value of the RVs that the  Company  would be required  to  repurchase.  Although
losses under these  agreements  have not been  significant  in the past,  if the
Company were obligated to repurchase a significant  number of RVs in the future,
it could  result in  losses  and a  reduction  in new RV  sales.  The  Company's
contingent  obligations  under repurchase  agreements vary from period to period
and totaled approximately $103.9 million as of December 31, 2002.

                                       21

<PAGE>

     Competition.  The Company  competes  with numerous  manufacturers,  many of
which have  multiple  product  lines of RVs,  are larger and have  substantially
greater financial and other resources than the Company. According to Statistical
Surveys,  Inc., the three largest motorhome  manufacturers had sales aggregating
56.9% of  industry-wide  retail  unit sales of Class A  motorhomes  for the year
ended December 31, 2002. In addition,  sales of used RVs provide  competition to
RV manufacturers.

     Government  Regulation.  The Company is subject to federal, state and local
regulations governing the manufacture and sale of their products,  including the
provisions  of the  National  Traffic and Motor  Vehicle  Safety Act (the "Motor
Vehicle  Act"),  the  Transportation  Recall  Enhancement,   Accountability  and
Documentation  Act  (the  "TREAD"  Act) and the  Federal  Motor  Vehicle  Safety
Standards  ("FMVSS").  Certain  states  require  approval  of coach  designs and
provide  certification  tags proving  compliance before coaches can be sold into
that state. The Motor Vehicle Act authorizes the National Highway Traffic Safety
Administration ("NHTSA") to require a manufacturer to recall and repair vehicles
that contain safety defects or fail to comply with the FMVSS.  In addition,  the
Company  has,  from  time to  time,  instituted  voluntary  recalls  of  certain
motorhome and towable units. Future recalls of the Company's  products,  if any,
could have a material adverse effect on the Company. The Company is also subject
to some federal and state consumer protection and unfair trade practice laws and
regulations  relating  to  the  sale,  transportation  and  marketing  of  motor
vehicles, including so-called "Lemon Laws."

     Federal and state laws and regulations  also impose upon vehicle  operators
various  restrictions  on the  weight,  length  and  width  of  motor  vehicles,
including trucks and motorhomes,  that may be operated in certain  jurisdictions
or on certain  roadways.  As a result of these  restrictions,  certain models of
motorhomes  manufactured  by the Company's  Country Coach  subsidiary may not be
legally  operated  in  certain  jurisdictions  or on certain  roadways.  Certain
jurisdictions also prohibit the sale of vehicles exceeding length  restrictions.
Enforcement  of these  laws and  related  customer  complaints  to date has been
limited.  The  Company  is  unable  to  predict  reliably  the  extent of future
enforcement of these laws, the extent future  enforcement might lead to customer
complaints,  or the extent to which  Country  Coach may choose or be required to
provide some customer remedy, such as repurchasing or exchanging motorhomes,  as
a  result  of such  complaints.  If  current  enforcement  efforts  and  related
complaints were to increase significantly from their current levels, the cost of
resolving  such  complaints,  particularly  should the  resolution of complaints
require repurchasing,  refurbishing,  and reselling of motorhomes,  could have a
material financial effect on the Company.

     Amendments  and  changes  in  enforcement  with  respect  to these laws and
regulations  and  the   implementation   of  new  laws  and  regulations   could
significantly  increase  the costs of  manufacturing,  purchasing,  operating or
selling the Company's  products and could have a material  adverse effect on the
Company's business,  results of operations and financial condition.  The failure
of the Company to comply with these present or future laws or regulations  could
result in fines  imposed  on the  Company,  civil  and  criminal  liability,  or
suspension of operations,  any of which could have a material  adverse effect on
the Company.

     The Company's manufacturing  operations are subject to a variety of federal
and state environmental  regulations relating to the use,  generation,  storage,
treatment,  emissions,  and disposal of hazardous materials and wastes and noise
pollution.  Such laws and  regulations  are becoming more  stringent,  and it is
likely that future  amendments to these  environmental  statutes and  additional
regulations  promulgated  thereunder  will be  applicable  to the  Company,  its
manufacturing  operations  and its  products in the  future.  The failure of the
Company to comply with present or future regulations could result in fines being
imposed on the Company, civil and criminal liability,  suspension of operations,
alterations  to  the   manufacturing   process  or  costly  cleanup  or  capital
expenditures.

     Warranty Claims.  The Company is subject to warranty claims in the ordinary
course of its business. Although the Company maintains reserves for such claims,
which to date  have  been  adequate,  there can be no  assurance  that  warranty
expense levels will remain at current levels or that such reserves will continue
to be  adequate.  A large  number of warranty  claims  exceeding  the  Company's
current  warranty  expense  levels could have a material  adverse  effect on the
Company's results of operations and financial condition.

     Product Liability.  The Company maintains product liability  insurance with
coverage in amounts  which  management  believes  is  reasonable.  To date,  the
Company has been successful in obtaining  product  liability  insurance on terms
the Company considers  acceptable.  Given the nature of the Company's  business,
product liability in excess of the Company's  insurance  coverage,  if incurred,
could have a material adverse effect on the Company.


                                       22

<PAGE>

     Antitakeover Provisions. Certain provisions of the Company's Certificate of
Incorporation,  as well as Delaware corporate law and the Company's  Stockholder
Rights Plan (the "Rights Plan"), may be deemed to have anti-takeover effects and
may delay, defer or prevent a takeover attempt that a stockholder might consider
in its best  interest.  Such  provisions  also may adversely  affect  prevailing
market  prices  for the  Common  Stock.  Certain  of such  provisions  allow the
Company's Board of Directors to issue, without additional  stockholder approval,
preferred  stock having rights senior to those of the Common Stock. In addition,
the  Company is subject to the  anti-takeover  provisions  of Section 203 of the
Delaware General Corporation Law, which prohibits the Company from engaging in a
"business  combination"  with an "interested  stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
In August 1996, the Company  adopted the Rights Plan,  pursuant to which holders
of the Common Stock  received a  distribution  of rights to purchase  additional
shares of Common Stock,  which rights become  exercisable upon the occurrence of
certain events.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

     The Company has no significant financial  instruments.  The Company has not
entered into any derivative financial instruments. The Company does not have any
significant  foreign currency  exposure because it does not transact business in
foreign  currencies.  However,  we are  exposed  to  market  risk as a result of
interest rate changes  (Interest Rate Risk).  Our exposure to interest rate risk
relates  primarily to our cash  investment in money market funds.  Cash balances
invested in these funds are insignificant  and  consequently,  our interest rate
risk is minimal.

Item 8.  Financial Statements and Supplementary Data

     The  information  required  by this  item  is  contained  in the  financial
statements  listed in Item  15(a)  under  the  caption  "Consolidated  Financial
Statements" and commencing on page F-1 of this Report.

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

         Not applicable.

                                       23

<PAGE>

                                    PART III

Item 10.  Directors and Officers of the Registrant

     The  information  required for this Item will be set forth in the Company's
definitive  Proxy  Statement for its 2003 Annual Meeting of  Stockholders  to be
filed with the Securities and Exchange  Commission not later than 120 days after
December 31, 2002, which information is incorporated herein by reference.

Item 11.  Executive Compensation

     The  information  required for this Item will be set forth in the Company's
definitive  Proxy  Statement for its 2003 Annual Meeting of  Stockholders  to be
filed with the Securities and Exchange  Commission not later than 120 days after
December 31, 2002, which information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

     The  information  required for this Item will be set forth in the Company's
definitive  Proxy  Statement for its 2003 Annual Meeting of  Stockholders  to be
filed with the Securities and Exchange  Commission not later than 120 days after
December 31, 2002, which information is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

     The  information  required for this Item will be set forth in the Company's
definitive  Proxy  Statement for its 2003 Annual Meeting of  Stockholders  to be
filed with the Securities and Exchange  Commission not later than 120 days after
December 31, 2002, which information is incorporated herein by reference.

Item 14. Controls and Procedures

     The Company maintains  disclosure controls and procedures that are designed
to ensure that  information  required to be disclosed in the  Company's  reports
under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to the
Company's management,  including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure
based  closely on the  definition of  "disclosure  controls and  procedures"  in
Exchange  Act Rule  13(a)-14(c).  In designing  and  evaluating  the  disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated,  can provide only reasonable assurance
of achieving the desired control objectives.

     Within 90 days prior to the date of this report, the Company carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls and  procedures.  The Company has formalized and
documented these disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's  disclosure  controls  and  procedures  were  effective  and  have  so
certified.

     There have been no significant  changes in the Company's  internal controls
or in other  factors  that  could  significantly  affect the  internal  controls
subsequent to the date the Company completed its evaluation.

                                       24

<PAGE>

                                     PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

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

1. Financial statements:
    REPORT OF INDEPENDENT ACCOUNTANTS.........................................29
    CONSOLIDATED BALANCE SHEETS...............................................30
    CONSOLIDATED STATEMENTS OF OPERATIONS.....................................31
    CONSOLIDATED STATEMENTS OF CASH FLOWS.....................................32
    CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY...........................33
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................................34

2. Financial statement schedule
     SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS..........................44

All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.

3. Exhibits and Exhibit Descriptions
     3.1      The Company's Restated Certificate of Incorporation. (2)
     3.2     The Company's By-laws. (2)
     4.1     Specimen-Certificate of Common Stock. (1)
    10.1     1993 Stock Option Plan. (1)
    10.2     1993 Stock Option Plan. (2)
    10.3     1995 Stock Option Plan. (3)
    10.4     Rights Plan Agreement with Continental Stock Transfer & Trust
             Company. (4)
    10.5     1996 Stock Option Plan. (5)
    10.6     1997 Stock Option Plan. (6)
    10.7     1999 Stock Option Plan. (7).
    10.8     Loan and  Security  Agreement  dated as of August 28, 2002
             between the  Company,  NRV,  CCI and UPS Capital  Corporation, as
             lender. (8)
    21.1     List of Subsidiaries. (6)
    23.1     Consent of PricewaterhouseCoopers LLP
    99.1     Certifications  Pursuant to 18 U.S.C.  Section 1350, As Adopted
             Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.
         ---------------
(1) Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 filed on August 16, 1993 (File No.
                  33-67414) as amended by Amendment No. 1 thereto filed on
                  September 22, 1993 and Amendment No. 2 thereto filed on
                  September 29, 1993.
(2) Previously filed as an exhibit to the Company's  Registration  Statement
            on Form S-1 filed on December 15, 1993 (File No. 33-72954).
(3) Previously  filed as an exhibit to the  Company's  Form 10-K for the seven
            months  ended  December 31, 1995 filed on March 27, 1996.
(4) Incorporated by reference from Form 8-A declared effective on August 26,1996
(5) Incorporated by reference from the Company's Form 10-K for the year ended
            December 31, 1996.
(6) Incorporated by reference from the Company's Form 10-K for the year ended
            December 31, 1997.
(7) Incorporated by reference from the Company's Form 10-K for the year ended
            December 31, 2001.
(8) Incorporated by reference from the Company's Form 8-K dated August 29, 2002.

(b) Reports on Form 8-K: None

                                       25

<PAGE>



SIGNATURES

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

                                      NATIONAL R.V. HOLDINGS, INC.

Dated: March 25, 2003                 By   /s/ Mark D. Andersen
                                      Mark D. Andersen,
                                      Chief Financial Officer
                                      (Principal Accounting and Finance Officer)


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

Signature                  Capacity in Which Signed                    Date

/s/ Doy B. Henley          Chairman of the Board                  March 25, 2003
     Doy B. Henley

/s/ Bradley C. Albrechtsen  Chief Executive Officer               March 25, 2003
     Bradley C. Albrechtsen and President (Principal Executive Officer)


/s/ Mark D. Andersen       Chief Financial Officer                March 25, 2003
     Mark D. Andersen      (Principal Accounting and Financial Officer)


/s/ Stephen M. Davis       Director and Secretary                 March 25, 2003
     Stephen M. Davis

/s/ Neil H. Koffler        Director                               March 28, 2003
     Neil H. Koffler

/s/ Robert B. Lee          Director                               March 25, 2003
     Robert B. Lee

/s/ Greg McCaffery         Director                               March 25, 2003
     Greg McCaffery

/s/ Wayne M. Mertes        Director                               March 25, 2003
     Wayne M. Mertes

                                       26

<PAGE>

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Bradley C. Albrechtsen, certify that:

I have reviewed this annual report on Form 10-K of NATIONAL R.V. HOLDINGS, INC.;

     Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     The  registrant's  other  certifying  officers  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange  Act Rules  13a-14  and  15d-14)  for the  registrant  and we have:  a)
designed  such  disclosure  controls  and  procedures  to ensure  that  material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period  in  which  this  annual  report  is being  prepared;  b)  evaluated  the
effectiveness  of the  registrant's  disclosure  controls and procedures as of a
date  within  90 days  prior  to the  filing  date of this  annual  report  (the
"Evaluation Date"); and c) presented in this annual report our conclusions about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

     The registrant's other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
function):  a) all  significant  deficiencies  in the  design  or  operation  of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors any material weaknesses in internal controls;  and b) any
fraud, whether or not material,  that involves management or other employees who
have a significant role in the registrant's internal controls; and

     The  registrant's  other  certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 25, 2003                /s/ BRADLEY C. ALBRECHTSEN
                                    --------------------------
                                    Bradley C. Albrechtsen
                                    Chief Executive Officer
                                    and President (Principal Executive Officer)


                                       27

<PAGE>


CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Mark D. Andersen, certify that:

I have reviewed this annual report on Form 10-K of NATIONAL R.V. HOLDINGS, INC.;

     Based on my  knowledge,  this  annual  report  does not  contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     The  registrant's  other  certifying  officers  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange  Act Rules  13a-14  and  15d-14)  for the  registrant  and we have:  a)
designed  such  disclosure  controls  and  procedures  to ensure  that  material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period  in  which  this  annual  report  is being  prepared;  b)  evaluated  the
effectiveness  of the  registrant's  disclosure  controls and procedures as of a
date  within  90 days  prior  to the  filing  date of this  annual  report  (the
"Evaluation Date"); and c) presented in this annual report our conclusions about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

     The registrant's other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
function):  a) all  significant  deficiencies  in the  design  or  operation  of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors any material weaknesses in internal controls;  and b) any
fraud, whether or not material,  that involves management or other employees who
have a significant role in the registrant's internal controls; and

     The  registrant's  other  certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 25, 2003           /s/ MARK D. ANDERSEN
                               --------------------
                               Mark D. Andersen
                               Chief Financial Officer
                               (Principal Accounting and Financial Officer)

                                       28

<PAGE>



REPORT OF INDEPENDENT ACCOUNTANTS


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

     In our opinion,  the consolidated  financial statements listed in the index
appearing  under  Item  15(a)(1)  on page 25  present  fairly,  in all  material
respects,  the  financial  position  of National  R.V.  Holdings,  Inc.  and its
subsidiaries at December 31, 2002 and 2001, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 2002, in conformity with  accounting  principles  generally  accepted in the
United States of America. In addition,  in our opinion,  the financial statement
schedule  listed in the index  appearing under Item 15(a)(2) on page 25 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.  These financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Company's  management;  our  responsibility  is to  express  an opinion on these
financial  statements and financial  statement  schedule based on our audits. We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United States of America,  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 our opinion.

     As  discussed  in  Note 1 to the  consolidated  financial  statements,  the
Company adopted Statement of Financial  Accounting  Standards No. 142 on January
1, 2002 and as a result, changed its method of accounting for goodwill.




/s/ PricewaterhouseCoopers LLP



Orange County, California
January 31, 2003

                                       29

<PAGE>


NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

                                                              December 31,
                                                           2002          2001
                                                        ---------     ---------
                                 ASSETS
Current assets:
  Cash and cash equivalents ..........................  $      14      $     22
  Receivables, less allowance for doubtful
    accounts ($276 and $244, respectively) ...........      9,829        16,378
  Inventories ........................................     72,532        85,385
  Deferred income taxes ..............................      9,477         7,267
  Income taxes receivable ............................      7,015         6,688
  Prepaid expenses ...................................      2,134         1,647
                                                        ---------     ---------
    Total current assets .............................    101,001       117,387

Goodwill, net ........................................         -          6,126
Property, plant and equipment, net ...................     43,230        45,257
Other ................................................      1,013         1,012
                                                        ---------     ---------
                                                        $ 145,244     $ 169,782
                                                        =========     =========
                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  line of Credit                                        $   4,943     $       -
  Book overdraft .....................................        943           608
  Current portion of long-term debt ..................         22            20
  Accounts payable ...................................     13,483        29,480
  Accrued expenses ...................................     28,564        21,750
                                                        ---------     ---------
    Total current liabilities ........................     47,955        51,858

Deferred income taxes ................................      3,105         3,469
Long-term debt .......................................         19            43
                                                        ---------     ---------
Total liabilities ....................................     51,079        55,370
                                                        ---------     ---------
Commitments and contingencies

Stockholders' equity:
  Preferred Stock, $.01 par value, 5,000 shares
    authorized, 4,000 issued and outstanding .........         -             -
  Common Stock, $.01 par value, 25,000,000 shares
    authorized, 9,832,161 and 9,718,025 issued
    and outstanding, respectively ....................         98            97
    Additional paid-in capital .......................     34,302        33,128
    Retained earnings ................................     59,765        81,187
                                                        ---------     ---------
      Total stockholders' equity .....................     94,165       114,412
                                                        ---------     ---------
                                                        $ 145,244     $ 169,782
                                                        =========     =========




                 See Notes to Consolidated Financial Statements

                                       30

<PAGE>


NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

                                                  Year Ended December 31,
                                            -----------------------------------
                                               2002         2001         2000
                                            ----------    ---------    ---------
Net sales ................................  $ 300,251      280,015    $ 348,846
Cost of goods sold .......................    302,483      275,648      308,216
                                            ----------    ---------    ---------
  Gross profit ...........................     (2,232)       4,367       40,630
                                            ----------    ---------    ---------
Selling expenses .........................     14,492       14,068       14,111
General and administrative expenses ......      8,176        8,765        9,138
Amortization of intangibles ..............          -          413          413
Impairment of goodwill....................      6,126            -            -
                                            ----------    ---------    ---------
  Total operating expenses ...............     28,794       23,246       23,662
                                            ----------    ---------    ---------
  Operating (loss) income ................    (31,026)     (18,879)      16,968

Interest income and other expense, net ...       (115)        (491)      (1,065)
                                            ----------    ---------    ---------
  (Loss) income before income taxes and
    cumulative effect of change in
    accounting principle .................    (30,911)     (18,388)      18,033
(Benefit) provision for income taxes .....     (9,489)      (6,927)       6,864
                                            ----------    ---------    ---------
  (Loss) income before cumulative effect
    of accounting change .................    (21,422)     (11,461)      11,169
  Cumulative effect of change in
    accounting principle, net of tax .....         -            -        (1,213)
                                            ----------    ---------    ---------
    Net (loss) income ....................  $ (21,422)   $ (11,461)   $   9,956
                                            ==========    =========    =========
Earnings per common share:
Basic:
  (Loss) income before cumulative effect
    of accounting change .................  $   (2.19)   $   (1.18)   $    1.14
  Cumulative effect of accounting change .         -            -         (0.12)
                                            ----------    ---------    ---------
  Net (loss) income ......................  $   (2.19)   $   (1.18)   $    1.02
                                            ==========    =========    =========
  Weighted average number of shares ......      9,788        9,683        9,743
                                            ==========    =========    =========
Diluted:
  (Loss) income before cumulative effect
    of accounting change .................  $   (2.19)   $   (1.18)   $    1.11
  Cumulative effect of accounting change .         -            -         (0.12)
                                            ----------    ---------    ---------
  Net (loss) income ......................  $   (2.19)   $   (1.18)   $    0.99
                                            ==========    =========    =========
  Weighted average number of shares ......      9,788        9,683       10,086
                                            ==========    =========    =========



                 See Notes to Consolidated Financial Statements

                                       31

<PAGE>


NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
                                                  Year Ended December 31,
                                            -----------------------------------
                                               2002         2001         2000
                                            ---------    ---------    ---------

Cash flows from operating activities:
  Net (loss) income ......................  $ (21,422)   $ (11,461)   $   9,956
  Adjustments to reconcile net (loss)
    income to net cash (used in)
    provided by operating activities:
    Depreciation .........................      3,936        3,889        3,247
    Amortization of intangibles ..........          -          413          413
    impairment of goodwill................      6,126            -            -
    (Gain) loss on asset disposal ........       (355)         (71)         136
    Tax benefit related to exercise of
      stock options ......................        105           73           -
    Changes in assets and liabilities:
      (Increase) decrease in trade
        receivables ......................      6,549       (1,269)       7,364
      (Increase) decrease in inventories .     12,853      (21,746)       4,548
      Increase in income taxes receivable.       (327)      (4,724)      (1,964)
      Decrease (increase) in prepaid
        expenses .........................       (487)         453         (661)
      Increase in book overdraft .........        335          608            -
      Increase in accounts payable .......    (15,997)      16,930        1,383
      Increase in accrued expenses .......      6,814        4,839        2,002
      Increase in net deferred income
        taxes ............................     (2,574)        (564)         (94)
                                            ----------    ---------    ---------
    Net cash (used in) provided by
      operating activities ...............     (4,444)     (12,630)      26,330
                                            ----------    ---------    ---------
Cash flows from investing activities:
  Decrease (increase) in other assets ....         (1)          84          (11)
  Proceeds form sale of assets............      2,859            -            -
  Capital expenditures ...................     (4,414)      (4,615)     (14,675)
                                             ---------    ---------    ---------
    Net cash used in investing activities      (1,556)      (4,531)     (14,686)
                                            ----------    ---------    ---------
Cash flows from financing activities:
  Net advance on line of credit...........      4,943            -            -
  Principal payments on long-term debt ...        (21)         (21)         (20)
  Proceeds from issuance of common stock .      1,070          508           32
  Purchase of treasury stock .............         -            -       (15,261)
                                            ----------    ---------    ---------
    Net cash provided by (used in)
      financing activities ...............      5,592          487      (15,249)
                                            ----------    ---------    ---------
  Net (decrease) increase in cash ........         (8)     (16,674)      (3,605)
  Cash, beginning of year ................         22       16,696       20,301
                                            ---------    ---------    ---------
  Cash, end of year ......................  $      14    $      22    $  16,696
                                            =========    =========    =========


                 See Notes to Consolidated Financial Statements

                                       32

<PAGE>

NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

<TABLE>
<CAPTION>

                                           Common Stock                                  Treasury Stock
                            Preferred   ---------------------  Paid-In      Retained  -----------------------
                              Stock      Shares    Amount      Capital      Earnings     Shares     Amount         Total
                            ----------- --------- ----------- ------------ ------------ --------  -----------   -------------

                         <c>         <c>                   <c>          <c>          <c>       <c>           <c>
 Balance, Dec. 31, 1999         $   -      10,589     $ 106      $47,768     $ 82,692                   $   -      $ 130,566
     Common stock issued
      under option plan             -           7         -           32                                                  32
     Purchase of treasury
      stock                                                         -                      (933)     (15,261)        (15,261)
     Net income                                                                 9,956                                  9,956
                           ----------- ---------- ---------- ------------ ------------ --------- ------------- --------------

 Balance, Dec. 31, 2000             -      10,596       106       47,800       92,648      (933)     (15,261)        125,293
     Common stock issued
      under option plan                        55         1          507                                                 508
     Cancellation of
      treasury stock                         (933)       (9)     (15,252)                   933       15,261               -
     Tax benefit related
      to exercise of
      stock options                                                   73                                                  73
     Net loss                                                                 (11,461)                               (11,461)
                           ----------- ---------- ---------- ------------ ------------ --------- ------------- --------------

Balance, Dec. 31, 2001              -       9,718        97       33,128       81,187          -           -         114,412
     Common stock issued
      under option plan                       114         1        1,069                                               1,070
     Tax benefit related
      to exercise of
      stock options                                                  105                                                 105
     Net loss                                                                 (21,422)                               (21,422)
                           ----------- ---------- ---------- ------------ ------------ --------- ------------- --------------
Balance, Dec. 31, 2002          $   -       9,832     $  98      $34,302     $ 59,765         -         $  -       $  94,165
                           =========== ========== ========== ============ ============ ========= ============= ==============

</TABLE>

                 See Notes to Consolidated Financial Statements


                                       33

<PAGE>

NATIONAL R.V. HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies National R.V. Holdings,  Inc.
(the  Company)   manufactures   recreational   vehicles   ("RVs")   through  its
wholly-owned  subsidiaries,  National R.V.,  Inc. (NRV) and Country Coach,  Inc.
(CCI).  The RVs are  marketed  primarily  in the United  States by NRV under the
Tradewinds, Dolphin, Sea Breeze, Islander, Tropi-Cal, Palisades, Surf Side Lite,
Splash,  Rage'n and Blaze'n  brand names and by CCI under brand names  including
Affinity, Allure, Inspire, Intrigue, Lexa, Magna and Prevost by Country Coach.

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

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

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

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

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

CONCENTRATION OF CREDIT RISK
     Financial  instruments,  which subject the Company to credit risk,  consist
primarily of trade receivables from dealerships.  The Company generally does not
require  collateral  from its  customers.  Such  credit  risk is  considered  by
management to be limited due to the Company's  broad customer base. For the year
ended December 31, 2002, two dealers accounted for 17% and 12%, respectively, of
the Company's net sales.  In addition,  the Company's top ten dealers  accounted
for approximately 59%, 53% and 44% of net sales for the years ended December 31,
2002, 2001 and 2000, respectively. At December 31, 2002, three dealers accounted
for 33%, 11% and 11%, respectively, of the Company's trade receivables.

LIQUIDITY AND CAPITAL RESOURCES
     For the year ended  December 31, 2002,  the Company  incurred a net loss of
$(21.4)  million  resulting in negative cash flows from operating  activities of
$(4.4) million and a reduction to working  capital of $(12.5)  million.  The net
loss was mainly attributable to: i) the recognition of the compete impairment of
the Company's  goodwill,  ii)  continued  significant  discounting  to wholesale
distributors,  iii) continued high warranty costs,  iv) continued low production
levels,  causing  high unit fixed costs and v) a workers'  compensation  reserve
increase.

     During 2002 and early 2003,  the Company  addressed the liquidity  issue by
aggressively pursuing accounts receivable and reducing inventories.  The Company
has worked  closely with its vendors during this time and has normalized the age
of accounts payable within  acceptable  terms. In addition,  the Company entered
into a new credit facility in the amount of $15,000,000,  temporarily  increased
to  $20,000,000   through  early  June  2003  (see  Note  5)  with  UPS  Capital
Corporation.

                                       34

<PAGE>

     The Company's  consolidated financial statements have been presented on the
basis  that  it  will  continue  as  a  going-concern,  which  contemplates  the
realization of assets and the  satisfaction  of liabilities in the normal course
of business.  The Company has suffered net losses of $21,422,000 and $11,461,000
and recorded  net income of  $9,956,000  for the years ended  December 31, 2002,
2000 and 1999, respectively. The Company has used cash from operating activities
of  $4,444,000,  $12,630,000  and provided  cash from  operating  activities  of
$26,330,000 for the years ended December 31, 2002, 2000 and 1999, respectively.

     The Company has funded its financial needs primarily through operations and
its existing line of credit. At December 31, 2002, the Company had cash and cash
investments of $14,000 and working capital of  $53,058,000.  The Company remains
dependent  upon its  ability to obtain  outside  financing  either  through  the
issuance of additional shares of its common stock or through borrowings until it
achieves  sustained  profitability  through a combination of increased sales and
improved product margins.

     Management intends to continue or start a variety of initiatives to improve
its  working   capital   position,   including  i)  new  product  and  floorplan
introductions  in the  fourth  quarter  2002  with  an  additional  new  product
introduction  in second  quarter 2003,  ii) certain  product  re-pricing to more
competitive  levels, iii) the continuation of 2002 discounts and rebates offered
to help move older  dealer  inventory,  freeing  financing  for new models  that
should  improve  retail  turns,  iv)  head  count   rebalancing  to  sustainable
production  levels,  v) an  engineering  review of material  components  for the
removal of  non-value  added items to reduce both  material  costs and  assembly
steps, vi) continued focus on improving quality through thorough inspections and
timely reporting of failures, vii) manufacturing efficiency improvements through
longer lead times for production increases allowing better training of new hires
to the direct work force,  viii)  non-producing  asset  dispositions such as raw
property in Florida,  ix) pursuit of a permanent increase in the line-of credit,
x) a substantial  reduction in all  categories of inventory and xi) filing for a
federal income tax refund of approximately  $7.5 million.  The Company's success
in  execution  of  these  initiatives  will  have a  significant  impact  on the
Company's liquidity during 2003.

     The Company believes the combination of internally generated funds, working
capital,  and  unused  borrowing  availability  will be  sufficient  to meet the
Company's planned capital and operational  requirements for at least the next 12
months.  Should the Company require further  capital  resources  during 2003, it
would most likely address such requirement through a combination of sales of its
products,  sales of equity  securities,  and/or  additional debt financings.  If
circumstances  changed,  and additional  capital was needed, no assurance can be
given  that  the  Company  would  be  able to  obtain  such  additional  capital
resources.

     If  unexpected  events  occur  requiring  the Company to obtain  additional
capital  and it is  unable to do so,  it then  might  attempt  to  preserve  its
available  resources  by  deferring  the  creation  or  satisfaction  of various
commitments,  deferring  the  introduction  of  various  products  or entry into
various markets,  or otherwise scaling back its operations.  If the Company were
unable to raise such  additional  capital or defer  certain  costs as  described
above,  such inability  would have an adverse effect on the financial  position,
results of operations, cash flows and prospects of the Company.

REVENUE RECOGNITION
     Sales are  recognized  by the Company upon the delivery and  acceptance  by
dealers,  provided the Company has received a purchase order, the price is fixed
or  determinable,  collectibility  of the  resulting  receivable  is  reasonably
assured  and  not  contingent  on  subsequent  resale,  returns  are  reasonably
estimable and there are no remaining obligations.

ADVERTISING  AND SALES  PROMOTION  COSTS
     The Company  expenses  advertising  costs as  incurred. For the years ended
December  31,  2002,  2001,  and  2000, advertising  and  sales  promotion costs
were approximately $5.4 million, $3.5 million, and $2.7 million respectively.

AMORTIZATION OF INTANGIBLE ASSETS
     There is no goodwill or other intangible assets on the  Company's  books as
of  December 31, 2002. If the company had adopted SFAS 142 effective January 1,
2000, net loss,  basic loss per share and  diluted  loss per share for the years
ended  December 31,  2002,  2001,  and 2000 would have been as follows:

                                       35

<PAGE>

(in thousands)
                                            Years Ended December 31,
                                          2002       2001         2000
                                    ------------------------------------
Net (loss) income as reported...       $(21,422)  $(11,461)    $ 9,956
Add back:
Goodwill amortization...........              -        413         413
                                    ------------ ----------- -----------
Adjusted net (loss) income......       $(21,422)  $(11,048)    $10,369
                                    ============ =========== ===========

Basic earnings per share:
Net earnings as reported........          (2.19)     (1.18)       1.14
Goodwill amortization...........              -       0.04        0.04
                                    ------------ ----------- -----------
Adjusted net earnings...........       $  (2.19)   $ (1.14)    $  1.18
                                    ============ =========== ===========

Diluted earnings per share:
Net earnings as reported........         (2.19)      (1.18)       1.11
Goodwill amortization...........             -        0.04        0.04
                                    ------------ ----------- -----------
Adjusted net earnings...........       $ (2.19)    $ (1.14)    $  1.15
                                    ============ =========== ===========

LONG-LIVED ASSETS
     The Company evaluates its long-lived assets for impairment by comparing the
future  undiscounted  cash flows of the  underlying  assets to their  respective
carrying amounts. The Company performs these tests for impairment  annually,  or
whenever  events or changes in  circumstances  indicate that an assets  carrying
amount may not be recoverable.

RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES
     Research, development and engineering expenses are charged to operations as
incurred and are included in cost of goods sold. Total research, development and
engineering  expenses were  $5,419,000,  $6,195,000 and $5,973,000 for the years
ended  December 31, 2002,  2001 and 2000,  respectively,  of which  research and
development   expenses  alone  were   $1,359,000,   $1,721,000  and  $2,161,000,
respectively.

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

RECLASSIFICATIONS
     Certain  reclassifications,  none of which  affected net income or retained
earnings,  have been made to prior year  amounts to conform to the current  year
presentation.

SEGMENTS
     The  Company  operates  in  one  reportable  segment:   the  manufacturing,
wholesale  distribution,  and service of recreational vehicles. The Company does
not have operations outside the United States.

RECENT ACCOUNTING PRONOUNCEMENTS

     As required by SFAS 142, the Company performed interim testing for goodwill
impairment and  determined it necessary to recognize the complete  impairment of
its goodwill.  This  impairment  totaled $6.1 million in 2002. The fair value of
the reporting unit was estimated using the value of the Company, as indicated by
the recent average stock price,  apportioned to the business units and increased
by a hypothetical  control premium.  As a result of such complete  impairment of
goodwill,  there was no  amortization  of intangibles in 2002.  Amortization  of
intangibles was $0.4 million in 2001.

                                       36

<PAGE>

     In October 2001, the FASB issued SFAS 144 "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,"  which  replaces  SFAS 121,  "Accounting  for
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of."
SFAS 144 establishes one accounting model, based on the framework established in
SFAS 121,  for the  recognition,  measurement  and  reporting of  impairment  of
long-lived assets to be held and used and of long-lived assets to be disposed of
by sale.  Adoption of SFAS 144 in the Company's 2002 fiscal year did not have an
impact on the Company's consolidated financial statements.

     In November 2002, the FASB issued FASB  Interpretation No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others"  (FIN 45).  FIN 45  requires  that upon
issuance of certain  guarantees,  a guarantor must recognize a liability for the
fair value of an obligation  assumed under the  guarantee.  FIN 45 also requires
significant new disclosures, in both interim and annual financial statements, by
a  guarantor,  about  obligations  associated  with  guarantees  issued.  FIN 45
disclosure  requirements  are effective  for our fiscal year ended  December 31,
2002 and the initial recognition and measurement  provisions are applicable on a
prospective  basis to guarantees  issued or modified after December 31, 2002. At
December 31, 2002, the Company had no guarantees  outstanding  except in respect
to warranty reserves.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  - Transition  and  Disclosure."  SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based  Compensation,"  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for  stock-based  employee  compensation.  In addition,  SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee  compensation and the effect of the method used on reported
results.  The Company has not adopted the fair value based method of  accounting
for stock-based compensation, and the adoption of the disclosure requirements of
this SFAS is not expected to have a material impact on the financial statements.

INCOME (LOSS) PER SHARE

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

The difference in the shares used to determine basic and diluted EPS is as
follows:

                                         December 31, (in thousands)
                           -----------------------------------------------------
                                   2002              2001             2000
                           ------------------- ---------------- ----------------
 Shares used for basic...         9,788             9,743            9,683
 Dilutive effect of:
    Stock options........             -                 -              342
    Warrants.............             -                 -                1
                           ------------------- ---------------  ----------------
Shares used for diluted..         9,788             9,683           10,086
                           =================== ===============  ================

     Stock  options and warrants to purchase  353,231 and 297,851  common shares
for the years ended December 31, 2002 and 2001  respectively are not included in
the  computation  of diluted  loss per share for the year  because  the  Company
reported  a loss,  and  therefore,  the  effect  of  exercise  would  have  been
anti-dilutive.

                                       37


<PAGE>

2. Inventories

Inventories consist of the following:

                                                 December 31, (in thousands)
                                              ----------------------------------
                                                      2002             2001
                                              ----------------------------------
      Finished goods.......................       $ 20,671           $ 21,525
      Work-in-process......................         25,391             32,415
      Raw materials........................         16,309             18,353
      Chassis..............................         10,161             13,092
                                              ----------------------------------
                                                  $ 72,532           $ 85,385
                                              ==================================

3. Property, Plant and Equipment

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

                                                  December 31, (in thousands)
                                              ----------------------------------
                                                     2002             2001
                                              ----------------------------------
      Land.................................   $    10,389      $    10,447
      Buildings............................        25,052           25,409
      Machinery and equipment..............        18,269           17,264
      Office equipment.....................         7,792            7,589
                                              ----------------------------------
                                                   61,502           60,709
      Less accumulated depreciation.........      (18,272)         (15,452)
                                              ----------------------------------
        Property, plant and equipment, net..  $    43,230      $    45,257
                                              ==================================

4. Accrued Expenses

Accrued expenses consist of the following:

                                                 December 31, (in thousands)
                                              ----------------------------------
                                                     2002             2001
                                              ----------------------------------
Workers' compensation self-insurance reserve..   $  7,794         $  3,428
Motorhome warranty reserve....................     11,840           13,016
Payroll and other accrued expenses............      8,930            5,306
                                              ----------------------------------
                                                 $ 28,564         $ 21,750
                                              ==================================

5. Product Warranties

     The Company's warranty reserve is established based on its best estimate of
the amounts  necessary to settle future and existing  claims on products sold as
of  the  balance  sheet  date.  The  Company  records  an  estimate  for  future
warranty-related  costs  based on  recent  actual  warranty  claims.  Also,  the
Company's  recall reserve is  established,  as necessary,  based on management's
estimate of the cost per unit to remedy the problem and the estimated  number of
units that will ultimately be brought in for the repair.

     The changes in the carrying amount of the Company's total product  warranty
liability for the twelve months ended December 31, 2002,  2001, and 2000 were as
follows:

                                       38

<PAGE>

Product Warranty
(in thousands of dollars)

                          Beginning                               Ending
                          Balance     Additions     Deductions    Balance
                       ---------------------------------------------------------
Warranty Reserve 2002...  $ 13,016      $ 14,485     $ 15,661      $ 11,840
Warranty Reserve 2001...     9,861        18,459       15,304        13,016
Warranty Reserve 2000...     7,754        17,521       15,414         9,861

6.  Debt and Credit Agreements

Debt consists of the following:
                                                  December 31, (in thousands)
                                              ----------------------------------
                                                      2002             2001
                                              ----------------------------------
 Note payable - City of Junction City, Oregon,3%
 paid monthly through October 2004......            $   41           $   63
 Less payments due within one year......               (22)             (20)
                                              ----------------------------------
                                                    $   19           $   43
                                              ==================================

     Debt  maturities over the remaining term of the note payable are $22,000 in
2003 and $19,000 in 2004.

     The Company has an  asset-based  revolving  credit  facility of $15,000,000
with UPS Capital  Corporation  (UPSC),  of which  $5,310,077  is reserved  for a
letter-of-credit,  required by the State of California,  serving as security for
NRV's  self-insured  workers'  compensation  program and  $325,848  reserved for
another contingent liability.  The remaining $9,364,075 is available for general
corporate  and working  capital needs and capital  expenditures.  On February 6,
2003,  the  Company  and  UPSC  entered  into  a  loan  modification  agreement,
increasing the credit  facility to $20,000,000,  adding  $5,000,000 in available
credit,  for a 120-day  period to support a short-term  buildup in inventory for
the first quarter 2003 show season.  Amounts borrowed under the revolving credit
facility bear interest at the prime rate listed in the Wall Street  Journal plus
0.75 percentage points.  The credit facility  contains,  among other provisions,
certain financial covenants,  including net worth requirements.  At December 31,
2002,  $4,942,629 was outstanding under this facility and the Company was not in
default with any covenants of its loan agreement with UPSC.

7.  Income Taxes

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

                                         December 31, (in thousands)
                            ----------------------------------------------------
                                    2002             2001             2000
                            ----------------------------------------------------
  Current (Refundable) Payable:
    Federal..............        $ (7,167)         $ (5,263)       $ 5,155
    State................             147            (1,100)         1,803
                            ----------------------------------------------------
                                   (7,020)           (6,363)         6,958
 Deferred:
    Federal.............           (1,129)             (182)         (216)
    State...............           (1,340)             (382)          122
                            ----------------------------------------------------
                                   (2,469)             (564)          (94)
                            ----------------------------------------------------
Total (benefit) provision
 for income taxes.......         $ (9,489)         $ (6,927)       $ 6,864
                            ====================================================

     Deferred  income  taxes are  recorded  based upon  differences  between the
financial  statement  and  tax  basis  of  assets  and  liabilities.   Temporary
differences  that give rise to  deferred  income tax assets and  liabilities  at
December 31, 2002 and 2001 were as follows:

                                       39

<PAGE>

                                  December 31, (in thousands)
                               ----------------------------------
                                       2002             2001
                               ----------------------------------
Accrued expenses.............       $ 6,360     $      6,755
State income taxes...........         3,117              512
                               ----------------------------------
 Deferred income tax assets..       $ 9,477     $      7,267
                               ==================================

Fixed assets.................       $ 2,075     $      2,455
Other........................         1,030            1,014
                               ----------------------------------
 Deferred income tax liabilities    $ 3,105     $      3,469
                                ==================================

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

                                                  December 31,
                             ---------------------------------------------------
                                  2002               2001               2000
                             --------------     -------------      -------------
Statutory rate.............      (35.0) %          (35.0) %             35.0 %
State taxes, net of federal
 benefit...................       (4.7)             (4.6)                2.3
Amortization of intangibles
 not deductible for income
 tax purposes.............         6.9               0.8                 2.3
Disallowed state loss
 carryforwards............         0.9               1.1                   -
Other.....................         1.2                 -                (1.5)
                             --------------     -------------      -------------
                                 (30.7) %          (37.7) %             38.1 %
                             ==============     =============      =============

8.  Consolidated Statements of Cash Flows

     The Company  follows the indirect  method of reporting  net cash flows from
operating  activities.  The Company paid interest of $0.4 million,  $0.1 million
and no interest in 2002,  2001 and 2000,  respectively.  The Company paid income
taxes of $81  thousand,  $1.5 million and $8.9  million in 2002,  2001 and 2000,
respectively.


9.  Recourse on Dealer Financing

     As is  customary in the  industry,  the Company  generally  agrees with its
dealers'  lenders to repurchase any unsold RVs if the dealers  become  insolvent
within  one year of the  purchase  of such RVs.  Although  the total  contingent
liability  under these  agreements  approximates  $103.9 million at December 31,
2002,  as with  accounts  receivable,  the risk of loss is spread over  numerous
dealers and lenders and is further  reduced by the resale value of the RVs which
the Company would be required to repurchase.  Losses under these agreements have
been negligible in the past and management believes that any future losses under
such agreements will not have a significant effect on the consolidated financial
position or results of operations of the Company.

10.Commitments and Contingencies

     From time to time,  the  Company is  involved  in  warranty  or "lemon law"
litigation arising out of its operations in the normal course of business. While
insurance coverage is not available for such matters, the number of such matters
as a  percentage  of sales is low. To date,  aggregate  costs to the Company for
these actions have not been material.

                                       40

<PAGE>

     The Company has commitments under certain  non-cancelable  operating leases
as follows (in thousands):

         2003....................                 $  1,457
         2004....................                    1,478
         2005....................                    1,279
         2006....................                       36
         2007 and thereafter.....                       18
                                             ----------------
                                                  $  4,268
                                             ----------------

     Rent expense for the years ended  December 31,  2002,  2001,  and 2000 were
$1,400,000, $1,300,000, and $1,260,000 respectively.

11.Stock Options and Warrants

     The Company has six fixed option plans that reserve  shares of common stock
for issuance to executives,  key employees and  directors.  The Company has also
issued fixed options  outside of such plans pursuant to individual  stock option
agreements.  Options granted to non-employee  and employee  directors  generally
vest immediately upon grant and expire five to ten years from the date of grant.
Options granted to employees vest in three equal annual  installments and expire
five years from the date of grant.  The price of the options granted pursuant to
these plans will not be less than 100 percent of the market  value of the shares
on the date of grant. The exercise of certain of these stock options  represents
a tax benefit for the Company which has been  reflected as a reduction of income
taxes  payable and an increase to additional  paid-in-capital  amounting to $0.1
million in 2002 and $0.1 million in 2001.

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

                                         Year Ended December 31,
                                     (in thousands, except per share)
                              --------------------------------------------------
                                     2002            2001             2000
                              --------------------------------------------------
Net (loss) income
  As reported............       $  (21,422)      $  (11,461)        $  9,956
  Pro forma..............          (23,431)         (12,984)           8,597

Basic earnings per share
  As reported...........             (2.19)           (1.18)            1.02
  Pro forma.............             (2.39)           (1.32)            0.90

Diluted earnings per share
  As reported...........             (2.19)           (1.18)            0.99
  Pro forma.............             (2.39)           (1.32)            0.87

     There were no additional  options  granted  during 2002.  The fair value of
options  granted  during 2001 and 2000 were estimated on the date of grant using
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for grants:

                                       41
<PAGE>

                                                Years Ended December 31,
                                                 2001            2000
      --------------------------------------------------------------------------
      Dividend yield...............                0%               0%
      Expected volatility..........             46.0%            44.3%
      Risk-free interest rate......              4.6%             6.1%
      Expected lives...............            4 years          4 years


     Information  regarding  these option plans and option  agreements for 2002,
2001 and 2000 is as follows:



                                               Options             Weighted
                                             Outstanding            Average
                                            (in thousands)       Exercise Price
      --------------------------------------------------------------------------
                                                --------------------------------
      Outstanding at December 31, 1999.....          1,987           11.85
         Granted...........................            403            8.50
         Expired or canceled...............            (26)          21.11
         Exercised.........................             (7)           4.67
                                                --------------------------------
      Outstanding at December 31, 2000.....          2,357           11.17
         Granted...........................            325           12.83
         Expired or canceled...............           (272)          11.70
         Exercised.........................            (55)           9.67
                                                --------------------------------
      Outstanding at December 31, 2001.....          2,355            1.19
         Granted...........................              0             N/A
         Expired or canceled...............           (199)          11.48
         Exercised.........................           (132)           9.84
                                                --------------------------------
      Outstanding at December 31, 2002.....        $ 2,024         $ 11.25
                                                ================================


     The following  table  summarizes  information  concerning  outstanding  and
exercisable stock options as of December 31, 2002:

                              Options Outstanding           Options Exercisable
                      ------------------------------------ ---------------------
                                    Weighted
                         Number      Average    Weighted     Number    Weighted
                      Outstanding   Remaining    Average   Exercisable  Average
      Range of             (in     Contractual  Exercise      (in      Exercise
      Exercise Prices   thousands)    Life       Price     thousands)   Price
      --------------------------------------------------------------------------
$ 2.67 - $ 2.67           159         0.75       $ 2.67        159      $ 2.67
$ 3.33 - $ 3.33            91         2.00         3.33         91        3.33
$ 3.75 - $ 3.75            95         2.74         3.75         95        3.75
$ 4.61 - $ 4.61           101         0.92         4.61        101        4.61
$ 8.50 - $ 8.50           261         2.74         8.50        175        8.50
$ 9.33 - $ 9.33           255         3.75         9.33        255        9.33
$10.08 - $10.08           461         4.42        10.08        461       10.08
$12.83 - $12.83           251         3.73        12.83         89       12.83
$24.94 - $24.94           338         1.41        24.94        338       24.94
$26.81 - $26.81            12         6.39        26.81         12       26.81
                        -----                                -----
                        2,024         2.89      $ 11.25      1,776     $ 11.24
                        =====                                =====

                                       42

<PAGE>

     There were no options  granted in 2002. The weighted  average fair value of
options granted during 2001 and 2000 was $12.83 and $3.57, respectively.


12.  Related Party Transactions

     Mr.  Robert B. Lee,  a  director  of the  Company,  is a partner in a joint
venture that is a party to a lease  agreement with the Company.  Pursuant to the
agreement,  The  Company  leases  from the joint  venture  a parcel of  property
constituting  a majority  of CCI's  manufacturing  facilities.  During the years
ended December 31, 2002,  2001 and 2000,  the Company paid $1.31 million,  $1.27
million and $1.20 million,  respectively,  under the lease agreement.  The lease
agreement calls for future payments totaling  approximately $3.9 million through
October 31, 2005. The  escalations are based on the Consumer Price Index and the
Company  anticipates  this  expense to remain  flat over the next two years.  In
addition, there is a five year renewal option on this lease agreement.

     Heller Ehrman White & McAuliffe,  a law firm in which Mr. Stephen M. Davis,
the  Secretary  and a director of the  Company,  is a partner,  performed  legal
services for the  Company.  Fees paid the law firm were  $316,000,  $199,000 and
$112,000 during the years ended December 31, 2002, 2001 and 2000, respectively.

13. Quarterly Consolidated Financial Data (unaudited)


                                                 2002 Quarter ended
                                         --------------------------------------
                                            (in thousands except share data)
                                         --------------------------------------
                                         March 31   June 30  Sept. 30   Dec. 31
                                         --------  --------  --------  --------
Net sales .........................     $  79,320  $ 87,466  $ 72,417  $61,047
Gross profit ......................          (254)    3,863       (44)  (5,797)
Net (loss) income                          (3,316)   (1,396)   (9,811)  (6,899)
(Loss) earnings per common share
   - basic.........................     $   (0.34) $  (0.14) $  (1.00) $ (0.70)
(Loss) earnings per common share
   - diluted.......................     $   (0.34) $  (0.14) $  (1.00) $ (0.70)
Weighted average number of shares:
  Basic............................         9,719     9,776     9,825    9,832
  Diluted..........................         9,719     9,776     9,825    9,832


                                                 2001 Quarter ended
                                         --------------------------------------
                                            (in thousands except share data)
                                         --------------------------------------
                                         March 31   June 30  Sept. 30   Dec. 31
                                         --------  --------  --------  --------
Net sales.........................     $  62,380   $ 81,021  $ 66,901  $ 69,713
Gross profit (loss)...............         2,193      5,548    (3,494)      120
Net (loss) income.................        (1,895)       126    (6,104)   (3,589)
(Loss) earnings per common share
   - basic........................     $   (0.20)  $   0.01  $  (0.63) $  (0.37)
(Loss) earnings per common share
   - diluted......................     $   (0.20)  $   0.01  $  (0.63) $  (0.37)
Weighted average number of shares:
  Basic...........................         9,663      9,663     9,688     9,718
  Diluted.........................         9,663      9,948     9,688     9,718

                                       43

<PAGE>

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


             For the years ended December 31, 2002, 2001 and 2000

                                            Additions
                               Balance at   charged to                Balance at
                               beginning      costs                     end of
                               of period   and expenses  Deductions     period
                              -----------  -----------  -----------  -----------
Twelve months ended December 31, 2002
  Allowance for
    doubtful accounts .....   $   224,000  $   121,000  $    69,000  $   276,000
  Workers' compensation
    self-insurance reserve      3,428,000    7,189,000    2,823,000    7,794,000
  Motorhome warranty
    reserve ...............    13,016,000   14,485,000   15,661,000   11,840,000
                              -----------  -----------  -----------  -----------
                              $16,668,000  $21,795,000  $18,553,000  $19,910,000
                              ===========  ===========  ===========  ===========

Twelve months ended December 31, 2001
  Allowance for
    doubtful accounts .....   $   321,000  $    28,000  $   125,000  $   224,000
  Workers' compensation
    self-insurance reserve      3,128,000    2,970,000    2,670,000    3,428,000
  Motorhome warranty
    reserve ...............     9,861,000   18,459,000   15,304,000   13,016,000
                              -----------  -----------  -----------  -----------
                              $13,310,000  $21,457,000  $18,099,000  $16,668,000
                              ===========  ===========  ===========  ===========

Twelve months ended December 31, 2000
  Allowance for
    doubtful accounts .....   $   199,000  $   265,000  $   143,000  $   321,000
  Workers' compensation
    self-insurance reserve      2,428,000    3,259,000    2,559,000    3,128,000
  Motorhome warranty
    reserve ...............     7,724,000   17,521,000   15,414,000    9,861,000
                              -----------  -----------  -----------  -----------
                              $10,381,000  $21,045,000  $18,116,000  $13,310,000
                              ===========  ===========  ===========  ===========

                                       44