-----------------------------
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                                                   -----------------------------
                                                   OMB Number:       3235-0070
                                                   Expires:    October 31, 1995
                                                   Estimated average burden
                                                   hours per response. . 190.00
                                                   -----------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended    March 31, 2002
                               -------------------------------------------------

                                       or

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

For the transition period from ______________________ to _______________________

Commission File Number:             0-24804
                        --------------------------------------------------------

                                Featherlite, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Minnesota                                     41-1621676
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

          Highways 63 & 9, P.O. Box 320, Cresco, IA 52136
--------------------------------------------------------------------------------
(Address of principal executive offices)                (Zip Code)

                                  319/547-6000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

     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.         [X] Yes    [ ] No


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.


                       6,535,104 Shares as of May 10, 2002
<PAGE>


                                FEATHERLITE, INC.

                                      INDEX



                                                                        Page No.
                                                                        --------

Index ......................................................................   2

Part I.  Financial Information:

   Item 1. Condensed Consolidated Financial Statements (Unaudited)

      Condensed Consolidated Balance sheets
      March 31, 2002 and December 31, 2001 .................................   3

      Condensed Consolidated Statements of Income
      Three Month Periods Ended March 31, 2002 and 2001 ....................   4

      Condensed Consolidated Statements of Cash Flows
      Three Month Periods Ended March 31, 2002 and 2001 ....................   5

      Notes to Condensed Consolidated Financial Statements .................   6

   Item 2. Management's Discussion and Analysis of
           Financial Condition and Results of Operations ...................   9

   Item 3. Quantitative & Qualitative Disclosures about Market Risk ........  17

Part II. Other Information:

   Item 2. Changes in Securities and Use of Proceeds .......................  18

   Item 3. Defaults upon Senior Securities .................................  18

   Item 6. Exhibits and Reports on Form 8-K ................................  19

Signatures .................................................................  19

Exhibit Index ..............................................................  20


                                       2
<PAGE>


                          PART I: FINANCIAL INFORMATION

ITEM 1:

              FEATHERLITE, INC.
              CONDENSED CONSOLIDATED BALANCE SHEETS
              (UNAUDITED)
              (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                MARCH 31,     DECEMBER 31,
                                     ASSETS                       2002            2001
                                                              ------------    ------------
<S>                                                           <C>             <C>
Current assets
  Cash                                                        $        121    $        247
  Receivables                                                        8,057           5,001
  Refundable income taxes                                               --           2,755
  Inventories
    Raw materials                                                    7,024           6,949
    Work in process                                                  9,318          12,129
    Finished trailers/motorcoaches                                  17,300          25,008
    Used trailers/motorcoaches                                      20,918          22,129
                                                              ------------    ------------
    Total inventories                                               54,560          66,215
  Prepaid expenses                                                   1,802           1,977
                                                              ------------    ------------
  Total current assets                                              64,540          76,195
                                                              ------------    ------------

Property and equipment,net                                          16,637          17,024
Other assets                                                         4,260           3,952
                                                              ------------    ------------
                                                              $     85,437    $     97,171
                                                              ============    ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Current maturities of long-term debt                        $      8,773    $      9,299
  Bank line of credit                                                5,648           7,226
  Checks issued, not yet presented                                   3,673           3,061
  Wholesale financing and other notes payable                       20,748          27,713
  Subordinated convertible debt                                      1,500              --
  Motorcoach shell costs payable                                     5,219           7,531
  Accounts payable                                                   3,551           5,902
  Trade creditor repayment plan                                      3,494           3,253
  Accrued liabilities                                                8,055           8,365
  Customer deposits                                                  1,481           2,204
                                                              ------------    ------------
  Total current liabilities                                         62,142          74,554

Long-term debt, net of current maturities                            6,964           7,386
Other long term liabilities                                             85              90

Commitments and contingencies (Note 5)

Shareholders' equity                                                16,246          15,141
                                                              ------------    ------------
                                                              $     85,437    $     97,171
                                                              ============    ============
</TABLE>


See notes to condensed consolidated financial statements


                                       3
<PAGE>


              FEATHERLITE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (UNAUDITED)
              (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                                 MARCH 31,
                                                       -----------------------------
                                                           2002              2001
                                                       ------------     ------------
<S>                                                    <C>              <C>
Net sales                                              $     60,605     $     64,681
Cost of sales                                                52,750           57,656
                                                       ------------     ------------
  Gross profit                                                7,855            7,025
Selling and administrative expenses                           5,310            5,808
                                                       ------------     ------------
  Income from operations                                      2,545            1,217
Other income (expense)
  Interest                                                     (811)          (1,332)
  Other, net                                                     14              224
                                                       ------------     ------------
  Total other expense                                          (797)          (1,108)
                                                       ------------     ------------
Income before income taxes                                    1,748              109
Provision for income taxes                                      647               45
                                                       ------------     ------------
Net income                                             $      1,101     $         64
                                                       ============     ============


Net income per share - basic and diluted               $       0.17     $       0.01
                                                       ------------     ------------

Average common shares outstanding-basic and diluted           6,535            6,535
                                                       ------------     ------------
</TABLE>


See notes to condensed consolidated financial statements


                                       4
<PAGE>


              FEATHERLITE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              (UNAUDITED)
              (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                    MARCH 31
                                                          -----------------------------
                                                              2002              2001
                                                          ------------     ------------
<S>                                                       <C>              <C>
Cash provided by (used for) operating activities
  Net income                                              $      1,101     $         64
  Depreciation & amortization                                      504              634
  Other non cash adjustments, net                                 (315)             (26)
  Decrease in refundable income taxes                            2,755               --
  Decrease in working capital items, net                         3,079            1,730
                                                          ------------     ------------
    Net cash provided by operating activities                    7,124            2,402
                                                          ------------     ------------

Cash provided by (used for) investing activities
  Purchases of property and equipment, net                        (129)            (257)
  Proceeds from sale of aircraft and other property, net            --               49
                                                          ------------     ------------
    Net cash used for investing activities                        (129)            (208)
                                                          ------------     ------------

Cash provided by (used for) financing activities
  Decrease in short-term debt, net                              (6,964)          (2,110)
  Decrease in long-term debt,net                                (2,269)            (613)
  Increase in subordinated debt                                  1,500               --
  Increase in checks issued not yet presented                      612              442
                                                          ------------     ------------
    Net cash used for financing activities                      (7,121)          (2,281)
                                                          ------------     ------------

    Net cash (decrease) for period                                (126)             (87)
Cash balance, beginning of period                                  247              331
                                                          ------------     ------------

Cash balance, end of period                               $        121     $        244
                                                          ============     ============
</TABLE>


See notes to condensed consolidated financial statements


                                       5
<PAGE>


                                FEATHERLITE,INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared,
without audit, in accordance with the instructions of Form 10-Q and therefore do
not include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. Financial information as of December
31, 2001 has been derived from the audited financial statements of the Company,
but does not include all disclosures required by generally accepted accounting
principles.

It is the opinion of management that the unaudited condensed financial
statements include all adjustments, consisting of normal recurring accruals,
necessary to fairly state the results of operations for the three months ended
March 31, 2002 and 2001. The results of interim periods may not be indicative of
results to be expected for the year. For further information refer to the
consolidated financial statements and notes to consolidated financial statements
included in the Company's Form 10-K Annual Report for the year ended December
31, 2001.

Note 2. Going Concern Basis of Presentation

The accompanying consolidated financial statements for the quarter ended March
31, 2002 have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. During the current quarter the Company's operations provided cash
of $7.1 million, including collection of a $2.8 million income tax receivable
and reduction of motorcoach inventories. The Company's credit line availability
improved by $5.7 million in the quarter ended March 31, 2002 as the result of
the above items as well as the borrowing of $1.5 million in subordinated
convertible debt from a private investor, and a $500,000 special advance from
U.S.Bank. At March 31, 2002, the Company had approximately $10.3 million
available to borrow on its credit lines compared to $4.6 million at December 31,
2001. At March 31, 2002, the current order backlog for trailers has improved
significantly over levels at December 31, 2001 and at comparable dates a year
ago. Motorcoach sales activity is only down slightly from last year at this time
despite a significant decline in motorcoach backlog ($2.8 million at March 31,
2002 compared to $14.1 million at March 31, 2001). While the Company was in
default on financial covenants of its credit agreements with its principal
lenders at December 31, 2001, it has signed standstill agreements which
accelerate the maturity of the indebtness but waive the defaults. Two of the
lenders have made proposals to amend the existing credit agreements to extend
their terms by two or more years and to revise the financial covenants. The
financial institutions are completing their due diligence and it is expected the
new agreements will be in place before the end of the second quarter. The
Company also needs to refinance the mortgage on the Sanford, Florida facility by
June 28, 2002. The Company's continuation as a going concern is dependent upon
the approval of the proposed financing agreements, continued compliance with the
terms and covenants of the amended agreements, continued compliance with its
Trade Creditor Repayment Plan, securing new financing to replace the Sanford
facility mortgage and ultimately the continued generation of sufficient cash
flow to meet its obligations on a timely basis. Despite these efforts,
management cannot provide assurance that these new financing arrangements will
be completed as described above or that the Company will attain successful
operations.

Note 3: Other Assets

There were no aircraft purchases or sales during the three-month periods ended
March 31, 2002 and 2001.


                                       6
<PAGE>


Note 4: Financing Arrangements

The Company's compliance with the financial covenants of existing credit
arrangements has been waived as of March 31, 2002 as new arrangements are in the
process of being finalized.

The Company is a party to an interest rate swap. During the first quarter of
2002, the fair market value of this swap increased by $3,000 to a loss of
$20,000,net of tax, which was recorded as a comprehensive income as shown in
Note 8.

Note 5: Commitments and Contingencies.

Pursuant to trailer dealer inventory floor plan financing arrangements, the
Company may be required, in the event of default by a financed dealer, to
repurchase trailers from financial institutions or to reimburse the institutions
for unpaid balances, including finance charges plus costs and expenses. The
Company was contingently liable under these arrangements for a maximum of $8.7
million at March 31, 2002. During the three months ended March 31, 2002, the
Company was not required to make any repurchases under these arrangements. In
the opinion of management, no reserve is required for this contingency because
the aggregate amount of such repurchases on an annual basis has been less than 1
percent of annual sales and the repossessed inventory has been resold to other
dealers without a loss. The Company has no motorcoach dealers and has no
repurchase obligations with respect to motorcoaches.

The Company is partially self-insured for a portion of certain health benefit
and workers' compensation insurance claims. The Company's maximum annual claim
exposure under these programs varies as follows: For health claims there is an
annual stop loss of $100,000 per claim but no aggregate loss limit. For workers
compensation claims, there is a $250,000 per occurrence limit and an aggregate
loss limit of $1.9 million. At March 31,2002, $2.0 million was accrued for
estimated unpaid health and workers compensation claims and is classified in
accrued liabilities in the condensed consolidated balance sheet. The Company has
obtained an irrevocable standby letter of credit in the amount of $2.4 million
in favor of the workers' compensation claim administrators to guaranty
settlement of claims.

The Company, in the course of its business, has been named as a defendant in
various legal actions. These actions are primarily product liability or workers'
compensation claims in which the Company is covered by insurance subject to
applicable deductibles. Although the ultimate outcome of such claims cannot be
ascertained at this time, it is the opinion of management, after consulting with
counsel, that the resolution of such suits will not have a material adverse
effect on the financial position of the Company or its operating results for any
particular period.

The Company leases certain office and production facilities under various
operating leases that expire at varying dates through 2011. Rental expenses
under these operating leases is estimated to be $877,000 for 2002.

The Company has obtained fixed price commitments from certain suppliers for
about 65 percent of its expected aluminum requirements in 2002 to reduce the
risk related to fluctuations in the cost of aluminum, the principal commodity
used in the Company's trailer segment. In certain instances there may be a
carrying charge added to the fixed price if the Company requests a deferral of a
portion of its purchase commitment to the following year.

Note 6: Shareholders' Equity

Shareholders' equity may be further detailed as follows (in thousands):


                                       7
<PAGE>


                                                      Mar. 31,       Dec. 31,
                                                        2002           2001
                                                     ----------     ----------
Common stock - without par value;
   Authorized - 40 million shares;
   Issued - 6,535 shares at Mar.31,2002
            6,535 shares at Dec.31,2001              $   16,595     $   16,595
Additional paid-in capital                                4,062          4,062
Accumulated deficit                                      (4,390)        (5,492)
Accumulated other comprehensive loss                        (21)           (24)
                                                     ----------     ----------
         Total Shareholders' equity                  $   16,246     $   15,141
                                                     ==========     ==========

In the first quarter the Company recorded as other comprehensive income an
unrealized gain of $3,000,net of tax, in the fair market value of an interest
rate swap.

Note 7: Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

         Total comprehensive income is as follows:
                                                          Three Months Ended
                                                            March 31, 2002
                                                          ------------------

         Net income                                           $    1,101
         Gain on interest rate swap agreement, net of tax              3
                                                              ----------
                           Total comprehensive income         $    1,104
                                                              ----------

At March 31, 2002 the interest rate swap adjustment was the only component of
accumulated other comprehensive loss.

Note 8: Stock Option Plan

In accordance with the stock option plan established by the Company in July
1994, as amended in May 1998, the Board of Directors has granted options to
purchase Company common stock to certain employees and directors in the total
amount of 835,400 shares at March 31, 2002 and at December 31,2001. These
options were granted at prices ranging from $1.11- $10.00 per share, and are
exercisable at varying dates not to exceed 10 years from the date of grant. No
options were granted in 2002 and no options were exercised or forfeited during
the three months ended March 31, 2002. In February 2002, the Board of Directors
authorized the officers of the Company to cancel approximately 396,500
outstanding stock options and replace them with an equal number of new stock
options to be issued with an exercise price equal to the fair market value of
one share of common stock as determined six months and one day from the
effective date of cancellation of such outstanding options. The exchange of
stock options will be voluntary with respect to each holder of outstanding stock
options. The Company contemplates finalizing this exchange in the second quarter
of 2002.

Note 9: Net Income (Loss) Per Share

Following is a reconciliation of the weighted average shares outstanding used to
determine basic and diluted net income per share for the three months ended
March 31, 2001 and 2000 (in thousands, except per share data):

   -----------------------------------------------------------------------------
                                                              2002       2001
   -----------------------------------------------------------------------------
   Net income available to common shareholders               $1,101     $  64
   -----------------------------------------------------------------------------
   Weighted average number of shares outstanding -
   basic                                                      6,535     6,535
   -----------------------------------------------------------------------------
   Dilutive effect of stock options                              --        --
   -----------------------------------------------------------------------------
   Weighted average number of shares outstanding -
   dilutive                                                   6,535     6,535
   -----------------------------------------------------------------------------
   Net income per share - basic and diluted                  $ 0.17     $0.01
   -----------------------------------------------------------------------------

Stock options for 835,400 shares at March 31, 2002 and 829,800 shares at March
31, 2001 were excluded from the dilutive effect of stock options because the
exercise price of the options was greater than the market value of the stock at
those dates.


                                       8
<PAGE>


Note 10: Segment Reporting

The Company has two principal business segments that manufacture and sell
trailers and luxury motorcoaches and related parts, accessories and services to
many different markets, including recreational, entertainment and agriculture.
"Corporate and other" primarily includes the aircraft operation, corporate
officers and administration.

Management evaluates the performance of each segment based on income before
income taxes. During 2001, management adopted a policy of ceasing to charge
interest on intercompany borrowing balances and to retain all interest expense
related to the U.S.Bank line of credit in the Corporate and other division.
Prior year segment results have been restated to conform with this new policy,
which had no effect on consolidated net income (loss) before income taxes.

Information on business segment sales, income before income taxes and assets are
as follows for the three month periods ended March 31, 2002 and 2001 (in
thousands):

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                                      Corporate
                                           Trailers   Motorcoaches    and other       Total
----------------------------------------------------------------------------------------------
2002
----------------------------------------------------------------------------------------------
<S>                                      <C>           <C>           <C>           <C>
Net sales to unaffiliated customers      $   27,311    $   33,294    $       --    $   60,605
----------------------------------------------------------------------------------------------
Income (loss) before income taxes             1,517           927          (696)        1,748
----------------------------------------------------------------------------------------------
Identifiable assets                          28,134        50,754         6,548        85,436
----------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------
2001
----------------------------------------------------------------------------------------------
Net sales to unaffiliated customers      $   30,049    $   34,632    $       --    $   64,681
----------------------------------------------------------------------------------------------
Income (loss) before income taxes               682           250          (823)          109
----------------------------------------------------------------------------------------------
Identifiable assets                          35,348        71,033         7,424       113,805
----------------------------------------------------------------------------------------------
</TABLE>

Item 2:

Management's Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion pertains to the Company's results of operations and
financial condition for the three-month periods ended March 31, 2002 and 2001.

Results of Operations

         Three months ended March 31, 2002 and 2001

On a consolidated basis, the Company's net income for the first quarter ended
March 31, 2002, was $1.1 million or $0.17 per diluted share, compared with
$64,000, or $0.01 per diluted share, in the first quarter of 2001. This
significant increase reflects improved gross profit margin despite lower sales
in 2002 combined with reduced selling and administrative costs and lower
interest expense, as discussed further below.

Net sales for the quarter decreased by $4.1 million (6.3 percent) to $60.6
million in 2002 compared with $64.7 million in 2001. This included an 8.7
percent decrease in sales of specialty trailers and transporters, which were
down in all categories. Motorcoach segment sales were down 4.4 percent,
including a decrease of 23.0 percent in sales of new motorcoaches, which was
substantially offset by a 44.1 percent increase in sales of used coaches.

Gross profit margin increased by $830,000 to $7.9 million in the first quarter
of 2002 from $7.0 million in 2001. As a percentage of sales, gross profit margin
for the quarter was 13.0 percent in 2002 compared to 10.9 percent in 2001. This
improvement in margin reflects improved margins realized on sales in both the


                                       9
<PAGE>


trailer and motorcoach segments. Trailer margins were 4.3 percentage points
higher in 2002 due to lower material costs, improved labor and overhead
utilization compared to 2001 when the Nashua plant closure during the quarter
reduced inefficiencies and resulted in other cost increases. Motorcoach gross
profit margins improved slightly as higher margins were realized on sales of
used units and the non-recurrence of costs related to reducing the workforce at
the Pryor, Oklahoma manufacturing facility in 2001, but were substantially
offset by lower margins realized on new motorcoach sales as non-current models
were sold at reduced prices.

Selling and administrative expenses decreased in 2002 by $498,000, an 8.6
percent decrease from 2001. As a percentage of sales, these expenses decreased
to 8.8 percent in 2002 from 9.0 percent in 2001. Trailer segment expenses
increased by 1.0 percent as increases in both advertising and promotion related
expenses exceeded reduced personnel and other costs. Motorcoach segment expenses
decreased by 14.0 percent due primarily to reduced marketing and administrative
costs resulting from the closing the Pryor facility in 2001.

Interest expense decreased by $521,000 in 2002 compared to 2001 due to lower
average levels of debt in 2002 as well as lower average interest rates in 2002.
Other income (expense), net, declined by $210,000 as the result of financial
advisory fees related to investigating strategic financing alternatives and
reductions in other miscellaneous income items in 2002.

Income before taxes (IBT) increased by over $1.6 million in the first quarter of
2002 compared to the same quarter last year. This improvement reflects an
increase in trailer segment IBT of $835,000, a decrease in corporate net expense
by $127,000 and an improvement of $677,000 in motorcoach segment IBT for the
reasons discussed above.

The provision for income taxes was 37 percent in 2002 compared to 41 percent in
2001. The reduced provision rate in 2002 reflects anticipated benefits due to
utilization of state income tax loss carryforwards from prior years.


Liquidity and Capital Resources

The liquidity of the Company is primarily measured by its cash flow from
operations together with amounts available to borrow on its approved lines of
credit with U.S Bank National Association (U.S. Bank) and with Deutsche
Financial Services Corporation (Deutsche), a wholesale financing company. During
the quarter ended March 31, 2002, the Company's operating activities provided
net cash of $7.1 million, including $5.8 million generated by a net decrease in
current operating items. This cash, net of amounts used for capital expenditures
and net non-line of credit debt reduction, decreased amounts borrowed on the
Company's lines of credit. At March 31, 2002, the Company had approximately
$10.3 million available to borrow on it credit lines compared to $4.6 million at
December 31, 2001.

The Company has two external lines of credit to supplement its internally
generated cash flow. It has a revolving loan agreement with its primary lender,
U.S. Bank, which expires June 30, 2002, that provides a working capital line of
credit equal to the lesser of $17.0 million or a defined percentage of eligible
receivables (85 percent) and inventories (67.5 percent). At March 31, 2002,
$10.6 million was available to borrow under this line and $5.9 million was
outstanding. There were also $3.7 million of outstanding checks written on the
Company's controlled disbursement account at U.S. Bank, which will be covered by
advances on the credit line as they are presented for payment. The Company also
has a wholesale finance agreement with Deutsche that provides up to $30 million
in financing for new and used motorcoaches held in inventory. At March 31, 2002,
$25.9 million was available to borrow under this agreement and $20.2 million was
outstanding.


                                       10
<PAGE>


Both of these lines of credit require the Company's compliance with certain
financial covenants, including the following: maintenance of a ratio of debt to
tangible net worth of 4.5:1 as of December 31, 2001 and as of end of any fiscal
year thereafter; achievement of minumum annual earnings before interest, taxes,
depreciation and amortization (EBITDA) of $10 million for fiscal year ended
December 31, 2001 and each fiscal year ending thereafter; achievement of a
minumum defined fixed charge coverage ratio of 1.00:1 for fiscal year ended
December 31, 2001 and 1.25:1 for each quarter ended thereafter; and maintenance
of a ratio of current tangible assets to current liabilities of 1.5:1. In
addition, the Company's mortgage debt with Wachovia Bank, National Association
(Wachovia), formerly First Union National Bank), requires the Company to
maintain a minimum defined funds flow coverage based on the past four quarters
of 1.3:1. Failure to comply with these covenants constitutes an event of default
under each facility and the existence of a default under any of the facilities
results in cross default under the other facilities.

The Company was not in compliance with any of these covenants at December 31,
2001 but was in compliance with certain of them at March 31, 2002. Following is
a summary of the actions in progress to obtain waivers of these defaults and to
amend the existing agreements for 2002 and thereafter:

1. On January 31, 2002, the Company signed a Standstill Agreement with U.S. Bank
that waived the covenant defaults at December 31, 2001 until April 30, 2002,
when all amounts owed on the line of credit and term notes ($10.6 million at
March 31, 2002) were to be paid in full. On April 30, 2002, U.S. Bank extended
this date to June 30, 2002 to allow it sufficient time to complete all aspects
of its review and legal documentation in connection with amending its existing
loan agreements. On January 31, 2002, U.S. Bank also provided the Company with a
special advance of $1.5 million, repayable in $500,000 monthly installments
beginning February 28, 2002 when the first payment was made and is subject to
the attainment of certain monthly income before taxes goals during the
standstill period, which have been met. This agreement was also contingent upon
the Company receiving $1.5 million in new capital by January 31. As discussed
above, this goal was achieved. In February 2002, U.S. Bank also presented the
Company with a proposal that would extend the existing credit agreement for
three years, increase the aggregate availability on the overall credit facility
by up to $2.7 million and provide a $2.0 million capital expenditure credit
facility. It is expected that this proposal, if approved after the bank has
fully completed its review and due diligence, would be in place by June 30,
2002. The financial covenants related to this proposal have not yet been
defined.

2. In March 2002, Deutsche presented the Company with a two year proposal which
would waive the financial covenant defaults at December 31, 2001 and amend the
agreement to reduce the existing credit line from $30 million to $25 million. It
would also reduce the advance rates on eligible new motorcoaches from 100
percent of cost to 90 percent and would establish a formula based line of credit
of 70 percent of cost for eligible used units. In April, the proposed financial
covenants for 2002 were modified and are as follows: maintain a minimum tangible
current ratio of 1.0 to 1 through June 30, 2002 and 1.2 to 1 thereafter,
evaluated quarterly; maintain a minimum tangible net worth of $13 million
through June 30, 2002 and $15 million thereafter; maintain a ratio of debt to
tangible net worth not to exceed 6.0 to 1 through June 30, 2002 and 5.0 to 1
thereafter; and maintain a trailing three month net income greater than zero,
measured monthly and achieve quarterly net income of 80 percent of the Company's
projected quarterly net income beginning with the quarter ending June 30, 2002.
The Company has accepted this proposal and Deutsche is moving forward to
finalize the new agreement. The Company was in compliance with these revised
covenants as of March 31, 2002.

3. In October 2001, the Company entered into a Forbearance and Loan Modification
Agreement with First Union National Bank to waive the financial covenant
defaults until March 30, 2002 when the full amount of the unpaid balance in the
amount of approximately $3.8 million plus a related interest rate swap with a
market value loss of approximately $142,000 would become due. On April 1, the
Forbearance Agreement was modified to extend the forbearance period to June 28,
2002. The Company is still pursuing a lender to refinance this amount and is
also considering a proposal to sell and then leaseback the facility. There is no
assurance this refinancing will be accomplished.


                                       11
<PAGE>


4. In November 2001, the Company announced it had retained an investment banking
firm to enable it to pursue various strategic financing alternatives, including
obtaining additional long-term capital to finance the Company or the possible
sale of the motorcoach division. If the financing proposals described above are
successful, the Company will indefinitely suspend the motorcoach division sale.

During 2001, many of the Company's trade accounts payable were past due, and
certain of its vendors required cash payment upon delivery of materials and
supplies. In an effort to restructure its trade debt, the Company offered a plan
to trade creditors of its Trailer Division with balances outstanding as of
November 15, 2001. Each trade creditor was given the opportunity to choose one
of four options ranging from payment in full in equal quarterly installments
over a period of three years to discounting the payable in varying percentages
in exchange for payment within a shorter period of time. This plan was approved
by a majority of creditors, requiring the Company to pay amounts outstanding of
approximately $7.3 million, including $729,000 added to the Plan in the first
quarter of 2002, according to the payment option chosen by each creditor, with
$2.8 million due in 2002, $2.3 million in 2003 and $2.2 million in 2004. The
first and second installments under this plan were paid on January 31, 2002 and
April 30, 2002, respectively. Installments are due every three months
thereafter. There are no interest or service charges in connection with this
arrangement. Vendors under this plan have been continuing to supply the Company
with materials; however, they frequently require prepayments at the time of
order or payment on delivery of the materials. The Company expects these vendors
to begin extending more normal credit terms again as they receive payments under
the plan.

The Company's liquidity is generally reflected by a number of key indicators.
The Company's ratio of current assets to current liabilities was 1.04 to 1 at
March 31, 2002, compared with a ratio at December 31, 2001 of 1.02 to 1. This
ratio will improve when the financing arrangements described above are completed
and portions of the debt included in current liabilities is reclassified to
long-term. The ratio of total debt to shareholders' equity decreased to 2.45 to
1 at March 31, 2002 from 3.13 to 1 at December 31, 2001. During the quarter
ended March 31, 2002, total debt declined by almost $7.7 million as debt was
reduced with cash provided from operating activities. However, this improvement
also benefited from an increase of $1.1 million in shareholders' equity due to
net income in the quarter ended March 31, 2002.

While the Company's liquidity has improved during the quarter ended March 31,
2002, the factors described above are not fully resolved and doubt remains about
the Company's ability to continue as a going concern. No assurance can be
provided that the Company will be successful in all of its efforts to complete
the financing and obtain the waivers and amendments described above although
progress is being made in getting new financing agreements in place. Until such
waivers or amendments are obtained, U.S. Bank, Deutsche and First Union each
have the right to declare amounts outstanding under its facility immediately due
and payable, the right to proceed against the Company's assets, and rights to
exercise other remedies.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
U.S. Bank and Deutsche have continued to permit the Company to draw available
capital under their respective revolving financing arrangements with the
Company.

Following is a discussion of the principal components of the Company's cash flow
for the quarter ended March 31, 2002, as reflected in the consolidated
statements of cash flows:

Operating activities provided net cash of $7.1 million. The Company's net income
of $1.1 million was increased by adjustments for depreciation and amortization
of $504,000, and by other non-cash items in an aggregate net amount of $315,000.
Net changes in receivables, inventories and other current assets provided cash
of $11.5 million, including an income tax refund of $2.8 million received in the


                                       12
<PAGE>


first quarter of 2002. Substantially all of the remainder of this change
resulted from decreased inventories, in large part related to the motorcoach
segment, where the number of units in inventory were reduced and as a result
work in process inventory decreased by $2.3 million, new motorcoach inventory
decreased by $6.4 million and used motorcoach inventory decreased by $900,000.
Net decreases in accounts payable, customer deposits and other current
liabilities used cash of $5.7 million. These changes include, among other items:
a decrease of $2.3 million in motorcoach shell payables due to a decrease in the
number of bus shells held; a decrease of $2.4 million in accounts payable as
$729,000 was converted to the Trade Creditor Repayment Plan as described above,
$1.7 million was paid on other accounts payable and a reduction of $309,000 in
accrued liabilities. Customer deposits decreased by $723,000 as deposits
received on pending sales of trailers and motorcoaches in prior periods were
applied to sales completed in the current period.

Increased expenditures for working capital items may be required to support
production levels in excess of sales from time to time. To maintain a level
production schedule, production may begin on coaches before an order has been
received from a specific buyer. As of March 31, 2002, approximately 75 percent
of the coaches in production and to be completed over the next four months have
not been sold to specific customers. While it is the Company's expectation that
substantially all of these motorcoaches will be sold to specific customers
before production is completed, or shortly thereafter, there is no assurance
this will occur. Accordingly, this could further impact the liquidity of the
Company.

The shell manufacturer has financed a number of motorcoach shells acquired by
the Company for a four-month period that approximates the time normally required
to perform the conversion process. Payment is required for these shells at the
time the shell is sold or at the end of the defined period, whichever occurs
sooner. The manufacturer has the right to demand payment or to repossess shells
at that time. At March 31, 2002, $5.2 million was owed to the shell
manufacturer, a reduction of $2.3 million since December 31, 2001. There were no
expired consignment contracts at March 31, 2002.

The Company's net capital expenditures for plant and equipment were $129,000 for
the quarter ended March 31, 2002..There were no aircraft sales or purchases
during the quarter. On September 20, 2001 U.S. Bank terminated the availability
of capital expenditure financing under a Capital Expenditure Term Note. However,
as discussed above, the bank has proposed a $2.0 million capital expenditure
credit line for 2002. The Company has also made a commitment to the City of
Cresco, Iowa to construct a hangar facility at a cost of $300,000 as part of an
airport expansion project, which has been delayed indefinitely.

The Company leases certain office and production facilities under various leases
that expire at varying dates through fiscal year 2011. Minimum lease payments
for 2002 total $877,000. In addition, the Company accrued as a restructuring
charge liability at December 31, 2001, $400,000 of estimated rent to be paid on
the Pryor facility in 2002 until it is subleased. In 2001, the Company decided
not to lease a new sales and service center in North Carolina but as
consideration for being released from this obligation, will pay $302,000 in
monthly installments over a three year period beginning in March, 2002, to
Clement Properties, an entity owned by certain of the majority shareholders of
the Company

The Company's financing activities in the quarter ended March 31, 2002 used net
cash of $7.1 million, including $9.2 million for reductions in line of credit
borrowing and other long-term debt and trade creditor repayment plan payments. A
net increase of $612,000 in checks issued but not yet presented for payment
provided funds during the quarter. The Company also borrowed $1.5 million from
Bulk Resources, Inc. in the form of a subordinated convertible note. This note
is due December 31, 2002 or may be converted at $3.00 or the average closing
price of the Company's common stock between April 30, 2002 and October 30, 2002.
The option must be excercised by January 15, 2003.


                                       13
<PAGE>


As discussed in Note 6 to the condensed consolidated unaudited financial
statements, the Company is contingently liable under certain trailer dealer
floor plan arrangements. These arrangements relate to inventory financing
provided to Featherlite trailer dealers by financial institutions. The Company
would be required to repurchase trailer inventory if the financial institution
repossesses it and it is in saleable condition. No reserve has been provided for
this contingency because the aggregate amount of such repurchases has
historically been less than one percent of sales and repossessed inventory has
been resold to other dealers without a loss. These contingent liabilities total
approximately $8.7 million at March 31, 2002. Also, the Company is partially
self-insured for a portion of certain health benefit and workers' compensation
insurance claims. For health claims there is an annual stop loss limit of
$100,000 per claim but no aggregate loss limit. For workers compensation claims,
there is a $250,000 per occurrence limit and an aggregate limit of $1.9 million.
At March 31, 2002, $2.0 million was accrued for estimated unpaid claims. The
Company has obtained an irrevocable standby letter of credit in the amount of
$2.3 million in favor of the workers' compensation claim administrators to
guarantee payment of claims.

Assuming a favorable outcome to actions outlined above for improving the
Company's liquidity and a continued improvement in the national economy, the
Company believes that its current cash balances, cash flow generated from
operations and available borrowing capacity will be sufficient to fund continued
operations and capital requirements consistent with past levels for the next
twelve months. As described above, the Company has proposals from two of its
major lenders to continue funding in 2002 and beyond and is seeking a lender to
refinance the mortgage on the Sanford facility. No assurance can be provided
that the proposals will be approved in the form described above or at all or
that funding will be obtained to refinance the Sanford mortgage. Until such
waivers or amendments are obtained, U.S. Bank, Deutsche and First Union each
have the right to declare amounts outstanding under its facility immediately due
and payable, the right to proceed against the Company's assets, and rights to
exercise other remedies. Management cannot provide assurance that the Company's
cash flow from operations will be sufficient to meet its obligations as they
become due.

For the foreseeable future, the Company does not plan to pay dividends but
instead will follow the policy of reinvesting any earnings in order to finance
the expansion and development of its business. The Company is a party to certain
loan agreements that prohibit the payment of dividends without the lender's
consent.


Forward-looking Information and Risks

Certain statements in this report, and in the Company's Form 10-K and other
filings with the SEC, are forward-looking in nature and relate to trends and
events that may affect the Company's future financial position and operating
results. The words "believe," "estimate," "expect," "intend," "may," "could,"
"will," "plan," "anticipate'" and similar words and expressions are intended to
identify forward-looking statements. These statements speak only as of the date
of this quarterly report, are based on current expectations, are inherently
uncertain, are subject to risks, and should be viewed with caution. Actual
results and experience may differ materially from the forward-looking statements
as the result of many factors, including but not limited to: product demand and
acceptance of products in each segment of the Company's markets, fluctuations in
the price of aluminum, competition, facilities utilization, the availability of
additional capital required to improve the Company's net liquidity deficiency
and certain other unanticipated events and conditions. It is not possible to
foresee or identify all such factors. The Company makes no commitment to update
any forward-looking statement or to disclose any facts, events, or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement, other than as required by law.

While there was a noticeable slowdown in sales in the fourth quarter of 2001
after the tragic events of September 11, sales of both trailers and motorcoaches
have been much


                                       14
<PAGE>


stronger in the early part of 2002. New order backlog for trailers of $12.8
million at December 31, 2001 was below the backlog level of $14.8 million at
December 31, 2000; but at March 31, 2002 the trailer order backlog level of
$18.6 million surpassed the level of $10.3 million at March 31, 2001. At
December 31, 2001, order backlog for motorcoaches was $3.1 million compared to
$15.9 million at December 31, 2000. The motorcoach backlog was $2.9 million at
March 31, 2002 compared with $14.1 million at March 31, 2001. With an
encouraging start in 2002 and aggressive measures in place to promote sales,
management expects that sales will continue to increase as national economic
business conditions improve. There is continuing focus by the Company on the
sales and marketing related activities that have been effective in increasing
sales in the past but there is no assurance they will be successful in
increasing order levels to maintain or exceed last year's sales volume.

Actions were taken in 2001 to consolidate certain production facilities, to
reduce staffing levels and control other costs until the present economic trends
become more favorable. The Company believes these actions combined with
efficiency improvements will be reflected in improved gross profit margins as a
percentage of sales in 2002 in both segments of its business. Efforts will
continue to control selling and administrative expenses, both in total and as a
percentage of sales. Average debt levels may continue to decrease if the Company
is successful in its efforts to further reduce motorcoach new and used inventory
levels. However, these decreases could be partially offset by increased
borrowing for capital improvements and working capital needs if sales activity
continues to improve.

The Company believes its name recognition and close affiliation with the
motorsports industry will continue to have a positive impact on its sales of
specialty trailers, transporters and luxury motorcoaches. With more than 75
percent of its revenue from end users in motorsports and leisure and
entertainment categories, which also includes horse trailers, and with its
strong position in the livestock trailer market, the Company believes it is
strategically well-positioned to continue to benefit from these markets. The
Company introduced 60 new and enhanced models of trailers in 2001 and will
continue to add new models in 2002.

The Company's future operating results are subject to a number of risks,
including the following:

1. The Company has made increased use of leverage and incurred greater interest
and related expenses in two of the three years ended December 31, 2001.
Increased debt was incurred in connection with financing operations and
facilities expansions at the Motorcoach Division as well as financing its
increased working capital requirements through the year ended December 31, 2000.
In 2001 and through March 31, 2002 debt reductions have been made and interest
costs reduced as a result of decreases in Motorcoach Division inventories. As
described above, the Company is not in compliance with certain loan covenants
relating to its outstanding debt. If the Company is unable to obtain waivers of
these covenant defaults and secure sufficient additional financing to fund its
liquidity shortfalls, the Company's business will be materially adversely
affected.

2. There is a risk related to losing a major supplier of aluminum. In the past
this risk has been relatively nominal as there have been alternate sources of
supply. In recent years, the number of alternate sources of supply has been
reduced due to mergers within the aluminum industry. Also, additional time may
be required to replace an extruded aluminum supplier due to the fact that dies
are required and would have to be made. The Company routinely tries to keep at
least three suppliers of each shape so it has a backup supplier if necessary.

3. There is a risk related to the loss or interruption in the supply of bus
conversion shells from the Company's sole supplier of these shells. The Company
purchases all of its bus conversion shells from Prevost Car Company located in
Canada. Although the Company has insurance to cover certain losses it may
sustain due to fire or other catastrophe at Prevost's plant, the Company may not
be able to obtain conversion shells from another manufacturer on favorable terms
or at all.

4. The Company uses one subcontractor to provide paint and graphic design work
to meet customer specifications on certain custom trailers and specialty
transporters. There is a risk to the timely delivery of these trailers in the
event of an unforeseen interruption in the subcontractor's ability to provide
these services or if the customer delays providing the specifications to the
subcontractor.


                                       15
<PAGE>


5. The Company builds a significant number of luxury motorcoaches on a
speculative basis. While it is the Company's expectation that substantially all
of these motorcoaches will be sold to specific customers before production is
completed, or shortly thereafter, there is no assurance this will occur. Failure
to sell these motorcoaches on a timely basis at prevailing prices could further
decrease the liquidity of the Company.

6. The Company takes trade-ins on both new and used motorcoach sales. These
trade-in units are marketed on a retail basis to other customers. In the fourth
quarter of 2001, the Company experienced a significant decline in the market
value of trade-in units and wrotedown the carrying value of the used inventory
by $2.5 million in order to facilitate their sale. There is a risk that
additional write-downs of this inventory will occur if these trade-in units are
not sold at current selling prices, which could adversely impact the Company's
future operating results.

7. The accompanying consolidated condensed unaudited financial statements have
been prepared assuming that the Company will continue as a going concern.
However, the Report of Independent Public Accountants on the December 31, 2001
financial statements states that the Company is unable to ascertain whether it
will have sufficient liquidity available under its existing lines of credit to
fund operations or whether the Company will meet various covenant requirements
contained in its financing agreements. These matters raised substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

8. In 2001, the Company was notified by The Nasdaq Stock Market, Inc. (Nasdaq)
that its common stock had failed to maintain the minimum market value of public
float required for continued listing on the Nasdaq National Market . In August
2001, the Company transferred to The Nasdaq Smallcap Market. Nasdaq has also
expressed concern that the Company may not be able to sustain compliance with
the continued listing requirements of The Nasdaq Stock Market because of the
"going concern" opinion expressed in the Report of Independent Accountants on
the Company's December 31, 2001 and 2000 consolidated financial statements.
There is no assurance the Company will be able to satisfy Nasdaq regarding its
ability to meet these continued listing requirements, and the Company's common
stock may be delisted from Nasdaq.


Critical Accounting Policies

Inventories: Inventories are stated at the lower of cost, as determined on a
first-in, first-out (FIFO) basis, or market and include materials, labor and
overhead costs. Raw materials consist of the cost of materials required to
produce trailers and complete motorcoach conversions and to support parts sales
and service. Work in process consists of costs related to materials, bus
conversion shells, labor and overhead related to the production process.

In 2001 and 2000, the Company evaluated the carrying value of its motorcoach
inventories and recorded total charges of $3.0 and $1.7 million, respectively,
to cost of sales to reduce the carrying cost of this inventory to its estimated
market value. This write-down in 2001 was required as a result of a substantial
decrease in the market value of used motorcoaches in light of the reduced demand
and a general downturn in the motorcoach market, particularly following the
events of September 11.


                                       16
<PAGE>


Revenue Recognition: The Company recognizes revenue from the sale of trailers
and motorcoaches when title and risks of ownership are transferred to the
customer, which generally is upon shipment or customer pick-up. A customer may
be invoiced for and receive title prior to taking physical possession when the
customer has made a fixed, written commitment to purchase, the trailer or
motorcoach has been completed and is available for pick-up or delivery, and the
customer has requested the Company to hold the trailer or motorcoach until the
customer determines the most economical means of taking physical possession.
Upon such a request, the Company has no further obligation except to segregate
the trailer or motorcoach, issue its Manufacturer's Statement of Origin, invoice
the customer under normal billing and credit terms and hold the trailer or
motorcoach for a short period of time as is customary in the industry, until
pick-up or delivery. Products are built to customer specification and no rights
of return or exchange privileges are granted. Accordingly, no provision for
sales allowances or returns is recorded.

Long-lived Assets: The Company assesses long-lived assets for impairment under
SFAS Statement No. 121, "Accounting for the Impairment of Long-lived Assets and
for Long-lived Assets to Be Disposed Of." Under those rules, property and
equipment, goodwill associated with assets acquired in purchase business
combinations, and any other long-lived assets are included in the impairment
evaluations when events or circumstances exist that indicate the carrying amount
of those assets many not be recoverable. In the fourth quarter of 2000, the
Company determined that unamortized goodwill in the amount of $8.3 million
associated with the acquisitions of Vogue in 1998 and Vantare in 1996 was
impaired, and wrote it off. The write-off of the goodwill was based on an
analysis of projected undiscounted cash flows, which were no longer deemed
adequate to support the goodwill associated with these businesses. Impairment
reviews of the long-lived assets of certain business units in the trailer
segment also resulted in the write-down of goodwill and other long lived assets
by $431,000 in 2001. These write-downs were based on projected cash flows that
were not adequate to support goodwill associated with an acquired business and
the reduction of the net book value of related land and buildings to an amount
deemed realizable based on previous experience.


New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued Statements
of Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and
SFAS No. 142, "Goodwill and Other Intangible Assets", effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill (and intangible
assets deemed to have indefinite lives) will no longer be amortized but will be
subject to annual impairment tests in accordance with SFAS No. 142. Other
intangible assets will continue to be amortized over their useful lives. The
amortization provisions of SFAS No. 142 apply to goodwill and intangible assets
acquired after June 30, 2001. We adopted SFAS No. 142 effective January 1, 2002.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"). SFAS No. 144 supersedes previous guidance for financial accounting and
reporting for the impairment or disposal of long-lived assets and for segments
of a business to be disposed of. SFAS No. 144 is effective for the Company
beginning on January 1, 2002. Adoption of the statement is not expected to have
a material impact.


Item 3. Quantitative and Qualitative Disclosures about Market Risks

The Company is exposed to market risks related to changes in the cost of
aluminum. Aluminum is a commodity that is traded daily on the commodity markets
and fluctuates in price. The average Midwest delivered cash price per pound for
ingot aluminum during the three years ended December 31, 2001, as reported to
the Company by its suppliers was $0.69 in 2001, $0.75 in 2000, and $0.66 in
1999. The Company's cost of aluminum varies from these market prices due to
vendor processing charges, timing of purchases, and contractual commitments with
suppliers for specific prices and other factors. The Company has obtained
commitments from suppliers to provide, at an agreed upon fixed price, about 65
percent of its anticipated requirements for 2002 which reduces a portion of the
risk of aluminum cost fluctuations for the year. If the Company is unable to
obtain such commitments from suppliers or otherwise reduce the price risk
related to the balance of the purchases to meet its requirements in 2002 and in
the years beyond 2002, this could have an adverse impact on the Company's
operating results if the cost of aluminum increases significantly above levels
in 2001.


                                       17
<PAGE>


The Company is exposed to market risks related to changes in U.S and
international interest rates. Substantially all of the Company's debt bears
interest at a variable rate. To a limited extent, the Company manages its
interest rate risk through the use of interest rate swaps. At March 31, 2002,
the fair value of the interest rate swap with a notional amount of $4.0 million
was a loss of approximately $122,000. This swap will be terminated on June 28,
2002 when the mortgage with First Union National Bank must be paid in full. An
interest rate increase by one percentage point would reduce the Company's future
annual net income by approximately $300,000 at current debt levels.

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds.

In February 2002, the Company borrowed $1.5 million from Bulk Resources, Inc.
and issued a subordinated convertible note to Bulk Resources. This note is due
December 31, 2002 or may be converted to common stock of the Company at $3.00
per share or the average closing price of the Company's common stock between
April 30, 2002 and October 30, 2002. The option must be excercised by January
15, 2003. The Company relied on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.

The Company's debt facilities with U.S. Bank and Deutsche are subject to
compliance with certain covenants, including the following: maintain a ratio of
debt to tangible net worth of 4.5:1 as of December 31, 2001 and as of any fiscal
year thereafter; attain minimum annual earnings before interest, taxes,
depreciation and amortization (EBIDTA) of $10 million for fiscal year ended
December 31, 2001 and each fiscal year ending thereafter; achieve minimum
defined fixed charge coverage of 1.3:1 in the third and fourth quarters of 2001,
with an annual requirement for 2001 of 1.0:1 and 1.25:1 for each quarter ended
thereafter; and maintain a ratio of current tangible assets to liabilities of
1.5:1 beginning June 30, 2001. In addition, the Company's mortgage debt with
Wachovia Bank, National Association (Wachovia), formerly First Union National
Bank requires the Company to maintain a minimum defined funds flow coverage
based on the past four quarters of 1.3 to 1. Failure to comply with these
covenants constitutes an event of default under each facility, and the existence
of a default under any of the facilities results in a cross-default under the
other facilities.

The Company is not in compliance with the following covenants: US Bank's minimum
fixed charge coverage ratio requirement in the third quarter and fourth quarters
of 2001; U.S. Bank's minumum EBITDA requirement for 2001 and U.S. Bank's ratio
of debt to tangible net worth requirement for 2001; Deutsche's ratio of debt to
tangible net worth requirement at December 31, 2001 and Deutsche's requirement
to attain a tangible current ratio of 1.5:1 in the third and fourth quarters of
2001 and the first quarter of 2002, and Wachovia's requirement to maintain a
defined funds flow of 1.3 to 1 in the third quarter of 2001.

On January 31, 2002, the Company signed a Standstill Agreement that waived all
of the defaults described above until April 30, 2002 when the entire outstanding
balance of the line of credit and term notes must be paid in full. In February
2002, U.S. Bank also presented the Company with a proposal that would extend the
existing credit agreement for three year and provide financing as described in
Item 2 above. It was expected this proposal, if approved after the bank has
completed its review and due diligence, would be in place by April 30, 2002 or
shortly thereafter. On April 30, 2002 the Standstill agreement was modified to
extend its maturity to June 30, 2002 to allow the Bank sufficient time to
complete all aspects of its review and documentation of the new agreement. The
financial covenants related to this proposal have not yet been defined. The Bank
is continuing to honor requests for advances of the line of credit received from
the Company in accordance with the existing credit agreement.


                                       18
<PAGE>


In March 2002, Deutsche presented the Company with a two year proposal which
would waive the financial covenant defaults at December 31, 2001 and amend the
agreement to reduce the existing credit line from $30 million to $25 million. It
would also reduce the advance rates on eligible new motorcoaches from 100
percent of cost to 90 percent and would establish a formula based line of credit
of 70 percent of cost for eligible used units. In April, the proposed financial
covenants for 2002 were modified and are as follows: maintain a minimum tangible
current ratio of 1.0 to 1 through June 30, 2002 and 1.2 to 1 thereafter,
evaluated quarterly; maintain a minimum tangible net worth of $13 million
through June 30, 2002 and $15 million thereafter; maintain a ratio of debt to
tangible net worth not to exceed 6.0 to 1 through June 30, 2002 and 5.0 to 1
thereafter; and maintain a trailing three month net income greater than zero,
measured monthly, and quarterly net income of 80 percent of the Company's
projected quarterly net income beginning with the quarter ending June 30, 2002.
The Company has accepted this proposal and Deutsche is moving forward to
finalize the proposed transaction. The Company was in compliance with these
revised covenants as of March 31, 2002.

On October 1, 2001 the Company entered into a Loan Modification and Forbearance
Agreement with First Union National Bank (First Union), now Wachovia Bank,
National Association (Wachovia). This agreement accelerated the maturity of this
debt to March 30, 2002, and increased the interest rate by 300 basis points
during the forbearance period. First Union waives the existing default during
the forbearance period. On April 1, the Forbearance Agreement was modified to
extend the forbearance period to June 28, 2002. The Company is still pursuing a
lender to refinance this amount and is also considering a proposal to sell and
then leaseback the facility. There is no assurance this refinancing will be
accomplished.


Item 6. Exhibits and Reports on Form 8-K.

         (a) Exhibits. See Exhibit Index on page following signatures.

         (b) Form 8-K. The Registrant filed no Form 8-K reports during the three
months ended March 31, 2002.



                                   SIGNATURES


Pursuant to the requirements 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.


                                        FEATHERLITE, INC.
                                        (Registrant)


Date: May 15, 2002                      /S/ CONRAD D. CLEMENT
                                        ---------------------
                                        Conrad D. Clement
                                        President & CEO



Date: May 15, 2002                      /S/ JEFFERY A. MASON
                                        --------------------
                                        Jeffery A. Mason
                                        Chief Financial Officer


                                       19
<PAGE>


                                  EXHIBIT INDEX
                                    Form 10-Q
                          Quarter ended March 31, 2002

Exhibit No.                        Description

--------------------------------------------------------------------------------
10.1     First Amendment to Standstill Agreement as of April 30, 2002, between
         the Company and U.S. Bank
--------------------------------------------------------------------------------


                                       20