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, 2006Or**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: 0-24804Featherlite,
                Inc.
              (Exact
                name of registrant as specified in its charter)Minnesota
              (State
                or other jurisdiction of incorporation or organization)
            41-1621676
              (I.R.S.
                Employer Identification No.)Highways
                63 and 9, P.O. Box 320, Cresco, IA 52136
              (Address
                of principal executive offices)563-547-6000
              (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.





Yes X  No
      ___





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the exchange act. (Check
      one):





Large
      accelerated filer [ ]  Accelerated filer [ ]  Non-accelerated filer [X]





Indicate
      by check mark whether the registrant is a shell company (as defined by Rule
      12b-2 of the Exchange Act).





Yes
      ___  No X





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.





11,060,160
      shares as of May 10, 2006


1
 Index


**FEATHERLITE,
      INC.**


**INDEX**


**Form
      10-Q**


**Quarter
      ended March 31, 2006**








Page
                No.Index
            2Part
                I.Financial
                InformationItem
                1.Condensed
                Consolidated Financial Statements (Unaudited)Condensed
                Consolidated Balance Sheets March 31, 2006 and
                December 31, 2005
            3Condensed
                Consolidated Statements of Income Three Month Periods EndedMarch
                31, 2006 and 2005
            4Condensed
                Consolidated Statements of Cash Flows Three Month Periods EndedMarch
                31, 2006 and 2005
            5Notes
                to Condensed Consolidated Financial
                Statements
            6Item
                2.Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            11Item
                3.Quantitative
                & Qualitative Disclosures about Market Risk
            16Item
                4.Controls
                and Procedures
            16Part
                II.Other
                InformationItem
                1A Risk Factors
            16Item
                6Exhibits
            17Signatures
            17Exhibit
                Index
            18

















2
 Index


**Part
      I: FINANCIAL INFORMATION**





**Item
      1:** **CONDENSEDCONSOLIDATED
      FINANCIAL STATEMENTS
      (UNAUDITED)**





**Featherlite,
      Inc.**


**Condensed
      Consolidated Balance Sheets**


**(Unaudited)**


**(In
      thousands)**


**March
                31,**
            
            **December
                31,****ASSETS**
            
            **2006**
            
            **2005**Current
                assetsCash
            
            $
            170
            
            $
            91Receivables
            
            
            8,331
            
            
            7,178Refundable
                income taxes
            
            
            337
            
            
            337InventoriesRaw
                materials
            
            
            8,231
            
            
            7,438Work
                in
                process
            
            
            13,641
            
            
            13,886Finished
                trailers/motorcoaches
            
            
            20,885
            
            
            21,536Used
                trailers/motorcoaches
            
            
            12,018
            
            
            12,854Total
                inventories
            
            
            54,775
            
            
            55,714Leased
                promotional trailers
            
            
            1,636
            
            
            1,550Prepaid
                expenses
            
            
            1,412
            
            
            1,820Deferred
                tax asset
            
            
            1,329
            
            
            1,329Total
                current assets
            
            
            67,990
            
            
            68,019Property
                and equipment, net
            
            
            16,555
            
            
            16,583Other
                assets
            
            
            3,920
            
            
            3,199$
            88,465
            
            $
            87,801**LIABILITIES
                AND SHAREHOLDERS’ INVESTMENT**Current
                liabilitiesWholesale
                financing and other notes payable
            
            $
            15,963
            
            $
            18,923Current
                maturities of long-term debt
            
            
            1,797
            
            
            1,791Checks
                issued, not yet presented
            
            
            3,170
            
            
            4,419Motorcoach
                shell costs payable
            
            
            4,358
            
            
            3,142Accounts
                payable
            
            
            6,212
            
            
            4,384Accrued
                liabilities
            
            
            9,183
            
            
            8,194Customer
                deposits
            
            
            2,702
            
            
            2,832Total
                current liabilities
            
            
            43,385
            
            
            43,685Long-term
                debtBank
                line of credit
            
            
            2,419
            
            
            2,418Other
                long-term debt, net of current maturities
            
            
            9,717
            
            
            10,168Total
                long-term debt
            
            
            12,136
            
            
            12,586Deferred
                income taxes
            
            
            1,259
            
            
            1,259Deferred
                grant income
            
            
            27
            
            
            30Minority
                interest in subsidiary
            
            
            5
            
            
            5Commitments
                and contingenciesShareholders’
                investment
            
            
            31,653
            
            
            30,236$
            88,465
            
            $
            87,801





See
      notes
      to unaudited condensed consolidated financial statements


3
 Index


**Featherlite,
      Inc.**


**Condensed
      Consolidated Statements of Income**


**(Unaudited)**


**(In
      thousands, except for per share data)**








**Three
                Months Ended****March
                31,****2006**
            
            **2005**Net
                sales
            
            $
            60,433
            
            $
            58,587Cost
                of sales
            
            
            51,156
            
            
            48,835Gross
                profit
            
            
            9,277
            
            
            9,752Selling
                and administrative expenses
            
            
            6,417
            
            
            6,782Income
                from operations
            
            
            2,860
            
            
            2,970Other
                income (expense)Interest
            
            
            (644
            )
            
            (631
            )Other,
                net
            
            
            34
            
            
            28Total
                other expense
            
            
            (610
            )
            
            (603
            )Income
                before income taxes
            
            
            2,250
            
            
            2,367Minority
                interest in subsidiary income
            
            
            -
            
            
            (11
            )Provision
                for income taxes
            
            
            (878
            )
            
            (895
            )Net
                income
            
            $
            1,372
            
            $
            1,461Net
                income per share -Basic
            
            $
            0.12
            
            $
            0.13Diluted
            
            $
            0.12
            
            $
            0.13Average
                common shares outstanding-Basic
            
            
            11,040
            
            
            10,879Diluted
            
            
            11,680
            
            
            11,435














See
      notes
      to unaudited condensed consolidated financial statements











4
 Index


**Featherlite,
      Inc.**


**Condensed
      Consolidated Statements of Cash Flows**


**(Unaudited)**


**(In
      thousands)**








**Three
                Months Ended****March
                31,****2006**
            
            **2005**Cash
                provided by (used for) operating activitiesNet
                income
            
            $
            1,372
            
            $
            1,461Depreciation
                and amortization
            
            
            510
            
            
            609Other
                non cash adjustments, net
            
            
            (17
            )
            
            18Changes
                in other working capital items, net
            
            
            3,228
            
            
            (1,616
            )Net
                cash provided by operating activities
            
            
            5,093
            
            
            472Cash
                provided by (used for) investing activitiesPurchase
                of Sanford, Florida facility
            
            
            -
            
            
            (1,006
            )Purchases
                of other property and equipment
            
            
            (480
            )
            
            (425
            )Proceeds
                from equipment sales
            
            
            87
            
            
            36Net
                cash used for investing activities
            
            
            (393
            )
            
            (1,395
            )Cash
                provided by (used for) financing activitiesProceeds
                from wholesale financing/bank line of credit
            
            
            78,722
            
            
            67,492Repayment
                of wholesale financing/bank line of credit
            
            
            (81,379
            )
            
            (67,052
            )Borrowings
                for Sanford facility repurchase
            
            
            -
            
            
            5,280Settlement
                of Sanford facility lease obligation
            
            
            -
            
            
            (4,435
            )Repayment
                of other short-term debt
            
            
            (302
            )
            
            (297
            )Repayment
                of other long-term debt
            
            
            (468
            )
            
            (387
            )Proceeds
                from issuance of common stock upon exercise of options
            
            
            55
            
            
            88Increase
                (decrease) in checks issued not yet presented
            
            
            (1,249
            )
            
            206Net
                cash provided by (used for) financing activities
            
            
            (4,621
            )
            
            895Net
                cash increase (decrease) for period
            
            
            79
            
            
            (28
            )Cash
                balance, beginning of period
            
            
            91
            
            
            179Cash
                balance, end of period
            
            $
            170
            
            $
            151Supplemental
                disclosure, non-cash:Trailers
                exchanged for advertising
            
            $
            668
            
            $
            -




















See
      notes
      to unaudited condensed consolidated financial statements





5
 Index


**FEATHERLITE,
      INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**





Note
      1: Basis of Presentation





The
      accompanying unaudited condensed consolidated financial statements of
      Featherlite, Inc. (“Company”) 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 complete presentation of financial position,
      results of operations and cash flows in conformity with generally accepted
      accounting principles. Financial information as of December 31, 2005 has been
      derived from the audited consolidated financial statements of the Company,
      but
      does not include all disclosures required by accounting principles generally
      accepted in the United States of America.





The
      preparation of financial statements requires management to make decisions based
      upon estimates, assumptions, and factors it considers as relevant to the
      circumstances. Such decisions include the selection of applicable accounting
      principles and the use of judgment in their application, the results of which
      impact reported amounts and disclosures. The Company’s significant accounting
      policies with respect to these estimates are discussed more fully in its Annual
      Report on Form 10-K for the year ended December 31, 2005. Changes in economic
      conditions or other business circumstances may affect the outcomes of
      management’s estimates and assumptions. Accordingly, actual results could differ
      from those anticipated.





It
      is the
      opinion of management that the unaudited condensed consolidated financial
      statements include all adjustments, consisting of normal recurring accruals,
      necessary to fairly state the results of operations for the three month periods
      ended March 31, 2006 and 2005. The results of interim periods may not be
      indicative of results to be expected for the year.





The
      unaudited condensed consolidated financial statements include the accounts
      of
      Featherlite, Inc., and its wholly owned subsidiaries, Featherlite Aviation
      Company and Featherlite Chemicals Holdings, LLC (FCH). FCH owns a 51 percent
      interest in Featherlite Chemicals LLC, which discontinued operating activities
      in the fourth quarter of 2005.





Certain
      prior year information has been reclassified to conform to the presentation
      in
      the Company’s 2005 annual report on Form 10-K. These reclassifications had no
      affect on net income or shareholders’ investment as previously
      reported.





Note
      2:
      Other Assets





Other
      assets included in the accompanying condensed consolidated balance sheets as
      of
      March 31, 2006 and December 31, 2005 are as follows (in thousands):








2006
            
            2005Aircraft
                held for resale
            
            $
            2,340
            
            $
            2,340Deposits
            
            
            532
            
            
            532Leased
                promotional trailers
            
            
            389
            
            
            242Advertising
                and promotion
            
            
            659
            
            
            85Total
            
            $
            3,920
            
            $
            3,199








There
      were no aircraft purchases or sales during the three-month periods ended March
      31, 2006 and 2005. The aircraft is recorded at its estimated net realizable
      value. The Company did not record any market value write-down on the aircraft
      as
      the market for used business class aircraft has stabilized.





Advertising
      and promotion has increased as a result of the Company extending a sponsorship
      agreement through 2012 and the recording of certain obligations and benefits
      related to the extension.


6
 Index


Note
      3:
      Debt Financing Arrangements





***Wholesale
      Financing and Other Notes Payable*** :
      At
      March 31, 2006 and December 31, 2005, wholesale financing and other notes
      payable consisted of the following (in thousands):








2006
            
            2005GE
                Commercial Distribution Finance Company (GE) $25 million wholesale
                finance
                agreement, interest rate of prime plus 0.25% when the prime is less
                than
                6.25%, otherwise prime
              (7.50%
                at March 31, 2006 and 7.00% at December 31, 2005); secured by financed
                motorcoaches and other assets of the Company
            
            $
            15,358
            
            $
            17,447Regions
                Bank (Regions) $2 million floor plan financing agreement, monthly
                interest
                at the prime rate plus 0.5% (8.25% at March 31, 2006 and 7.75% at
                December
                31, 2005); secured by financed motorcoaches and Coachmen
                trailers
            
            
            93
            
            
            662Note
                payable with an insurance premium finance company
            
            
            512
            
            
            814$
            15,963
            
            $
            18,923








At
      March
      31, 2006, the Company was in compliance with the covenants contained in the
      financing agreements governing the above facilities and notes.





***Line
      of Credit:*** Under
      the terms of a Revolving Loan and Security Agreement, the Company has a $17
      million asset-based line of credit with U.S Bank. As of March 31, 2006 this
      credit facility had outstanding borrowings of $2.4 million, outstanding letters
      of credit of $2.3 million and remaining borrowing availability of $12.3 million.
      Advance rates are based upon 70-85% of the Company’s eligible accounts
      receivable and 30-70% of the Company’s eligible inventory. Interest is equal to
      the prime interest rate. The Company was in compliance with all of the covenants
      of this credit agreement, which also covers the term notes included in “other
      long-term debt” as of March 31, 2006.





**Other
      Long-Term Debt** :
      Other
      long-term debt consisted of the following at March 31, 2006 and December 31,
      2005 (in thousands):








2006
            
            2005U.S.
                Bank term notes payable; interest at prime (7.50% at March 31, 2006
                and
                7.00% at December 31, 2005) payable in monthly installments of $106,000
                plus interest; until October 31, 2008 when remaining balance of $115,000
                then due; contains same collateral and covenant provisions as Revolving
                Loan and Security Agreement.
            
            $
            3,874
            
            $
            4,212Mortgage
                note with GE Commercial Finance Business Property Corporation on
                Florida
                real estate, with a fixed annual interest rate of 6.49% and payable
                over a
                12 year term by monthly principal and interest payments of $53,000.
            
            
            4,953
            
            
            5,031Bank
                notes payable; interest at 6.5%; $26,600 payable monthly including
                interest; balance of $2.4 million due May 2007; collateralized by
                aircraft
            
            
            2,568
            
            
            2,606Notes
                and capitalized leases to banks and others, interest at average of
                6.0%,
                payable in varying monthly installments through 2007; collateralized
                by
                real estate and vehicles
            
            
            119
            
            
            110Total
            
            
            11,514
            
            
            11,959Less
                current maturities
            
            
            (1,797
            )
            
            (1,791
            )$
            9,717
            
            $
            10,168





7
 Index


Note
      4:
      Commitments and Contingencies





*Inventory
      Repurchase Agreements* -Pursuant
      to inventory floor plan financing arrangements available to Featherlite trailer
      dealers, the Company may be required, in the event of default by a financed
      dealer, to repurchase trailers from certain 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 $18.2 million at March 31, 2006. During the three months ended
      March 31, 2006, the Company made no repurchases under these arrangements. No
      reserve has been provided for this contingency because, in the opinion of
      management, there is sufficient historical evidence to support that 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 except as may arise from
      time to time as a result of litigation or related settlements in the ordinary
      course of business.





*Self
      Insurance* -
      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 $150,000 per claim but no aggregate loss limit. For workers
      compensation claims, there is a $250,000 per occurrence limit and an aggregate
      annual loss limit of $2.2 million. At March 31, 2006, $1.4 million and $0.5
      million was accrued for estimated unpaid workers compensation and health claims,
      respectively, and is classified in accrued liabilities in the unaudited
      condensed consolidated balance sheet. The Company has obtained irrevocable
      standby letters of credit in the amount of approximately $2.3 million in favor
      of the certain workers’ compensation claim administrators to guarantee
      settlement of claims they process. These letters of credit have reduced amounts
      available for borrowing under the U.S. Bank Credit Facility discussed in Note
      3.





*Litigation-* The
      Company, in the ordinary course of its business, is periodically 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 its
      self-insurance program or third-party insurance (subject to applicable
      deductibles). The ultimate outcome of such claims cannot be ascertained or
      reasonably estimated at this time. However, it is the opinion of management,
      after consulting with legal counsel handling such matters, it is unlikely that
      the resolution of such suits will have a material adverse effect on the
      financial position of the Company or its operating results for any particular
      period.





*Aluminum
      and other purchase commitments-* **** The
      Company has not obtained any fixed price commitments from suppliers for any
      part
      of its expected aluminum requirements in 2006. In certain prior years the
      Company has obtained commitments for a substantial portion of its estimated
      production requirements to reduce the risk related to fluctuations in the cost
      of aluminum, the principal commodity used in the Company’s trailer segment. At
      March 31, 2006, the Company had a firm commitment to purchase motorcoach shells
      in an aggregate amount of $5.1 million in 2006, which the Company expects to
      fulfill.





*Warranty* -
      The
      Company is not a guarantor of any obligations that would require it to recognize
      a liability for the fair value of the underlying obligation at its inception.
      However, it does have product warranty liabilities that are provided for as
      described in Note 2 to the consolidated financial statements included in the
      Company’s 2005 annual report on Form 10-K. Following is a summary of the changes
      in these liabilities during the three and month periods ended March 31, 2006
      and
      2005 (in thousands):








--Three
                months--2006
            
            2005Balance
                beginning of period
            
            $
            1,198
            
            $
            1,221Provision
                for units sold during period
            
            
            489
            
            
            423Claims
                paid during the period
            
            
            (377
            )
            
            (397
            )Balance,
                end of period
            
            $
            1,310
            
            $
            1,247








*Operating
      leases* -
      The
      Company leases certain office and production facilities under various operating
      leases that expire at varying dates through 2011. Rent expense for the three
      month periods ended March 31, 2006 and 2005 was $285,000 and $267,000,
      respectively. As of March 31, 2006, aggregate rental payments under these
      operating leases are estimated to be $1.1 million over the next 12 months.





8
 Index


Note
      5:
      Shareholders’ Investment





The
      components of shareholders’ investment are detailed as follows (in
      thousands):








Mar.
                31,
            
            Dec.
                31,2006
            
            2005Common
                Stock - without par valueAuthorized40,000
                shares;Issued11,060
                shares at Mar. 31, 200611,021 shares
                at Dec. 31, 2005
            
            $
            18,607
            
            $
            18,562Additional
                paid-in capital
            
            
            4,403
            
            
            4,403Retained
                earnings
            
            
            8,643
            
            
            7,271Total
                Shareholders’ Investment
            
            $
            31,653
            
            $
            30,236








On
      April
      9, 2005, the Board of Directors approved a three-for-two split of the Company’s
      common stock with a proportional increase in the number of issued and
      outstanding shares. All shares and per share amounts in this Form 10-Q have
      been
      restated to reflect the retroactive effect of the stock split.





On
      March
      31, 2006, the Company cancelled 1,905 shares of common stock that had been
      issued in 1998 under the earn-out provision of the agreement to acquire the
      assets of Mitchell Motorcoach Company. The earn-out provision expired in 2001
      and these shares remained unearned.








Note
      6:
      Stock Option Plans





Under
      the
      Company’s 1994 Stock Option Plan (the 1994 Plan) the Company reserved 1,650,000
      million shares of common stock for issuance as options until July 31, 2004
      when
      the Plan terminated and the granting of options under the 1994 Plan ended.
      In
      2004, the shareholders approved the 2004 Equity Incentive Plan, which reserved
      900,000 shares of common stock for issuance as options after that date. All
      options granted under the 1994 Plan remain in effect until the expiration date
      specified when granted.





At
      March
      31, 2006 and December 31, 2005, respectively, an aggregate of 960,951 options
      and 1,001,651 options were outstanding under these plans. These options were
      granted at prices ranging from $0.74-$4.07 per share, and are exercisable at
      various dates not to exceed 10 years from the date of grant. During the three
      month period ended March 31, 2006, options totaling 40,700 at an average price
      of $1.35 were redeemed with proceeds of $55,000 being received by the Company.
      There were no options granted or forfeited during the three month period ended
      March 31, 2006. ****





In
      December 2004, the Financial Accounting Standards Board (FASB) released its
      final revised standard, Statement of Financial Accounting Standards (SFAS)
      No.
      123(R), Share-Based Payments. SFAS 123(R) requires that an entity measure the
      cost of equity based service awards based on the grant-date fair value of the
      award. That cost will be recognized over the period during which an employee
      is
      required to provide service in exchange for the award or the vesting period.
      No
      compensation cost is recognized for equity instruments for which employees
      do
      not render the requisite service. An entity will initially measure the cost
      of
      liability based service awards based on its current fair value; the fair value
      of that award will be remeasured subsequently at each reporting date through
      the
      settlement date. Changes in fair value during the requisite service period
      will
      be recognized as compensation cost over that period. We have no outstanding
      liability based service awards. SFAS 123(R) also requires that the benefits
      of
      tax deductions in excess of recognized compensation cost to be reported as
      a
      financing cash flow, rather than as an operating cash flow as is currently
      required. This requirement will reduce net operating cash flows and increase
      net
      financing cash flows in periods after the effective date. Adoption of SFAS
      123(R) is required for annual periods beginning after December 15, 2005. We
      adopted the fair value based method of SFAS 123 in January, 2003 through the
      provisions allowed in SFAS 148, Accounting for Stock-Based Compensation -
      Transition and Disclosure. The adoption of SFAS 123(R) in the third quarter
      of
      2005 did not have a material impact on our consolidated financial position,
      results of operations, or cash flow.





9
 Index


Note
      7:
      Net Income per Share




Following
      is a reconciliation of the weighted average shares outstanding, including the
      effect of the 3 for 2 stock split described in Note 5, which was used to
      determine basic and diluted net income per share for the three-month periods
      ended March 31, 2006 and 2005 (in thousands, except per share
      data):








Three
                months2006
            
            2005Net
                income
            
            $
            1,372
            
            $
            1,461Weighted
                average number of basic shares outstanding
            
            
            11,040
            
            
            10,879Dilutive
                effect ofStock
                options
            
            
            477
            
            
            647Warrants
            
            
            163
            
            
            146Weighted
                average number of diluted shares outstanding
            
            
            11,680
            
            
            11,672Net
                income per share - basic
            
            $
            0.12
            
            $
            0.13Net
                income per share - diluted
            
            $
            0.12
            
            $
            0.13








A
      total
      of 0 shares and 57,000 shares at March 31, 2006 and 2005, respectively, 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.





Note
      8:
      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” in the table below includes the accounts of Featherlite
      Chemicals, LLC, unallocated aircraft operating costs, certain corporate
      officers’ salaries and other administration costs.





Management
      evaluates the performance of each segment based on income (loss) before income
      taxes. Management has a policy of not charging interest to the segments on
      intercompany borrowing balances and retains all interest expense related to
      the
      U.S. Bank line of credit in the “Corporate and other” segment.





Information
      on business segment net sales, income (loss) before income taxes and
      identifiable assets are as follows for the three-month periods ended March
      31,
      2006 and 2005 (in thousands):








Trailers
            
            Motorcoaches
            
            Corporate
                and other
            
            Total**Three
                month period ended March 31,**2006Net
                sales to external customers
            
            $
            39,783
            
            $
            20,650
            
            $
            -
            
            $
            60,433Income
                (loss) before income taxes *
            
            
            3,136
            
            
            (114
            )
            
            (772
            )
            
            2,250Identifiable
                assets
            
            
            41,449
            
            
            42,925
            
            
            4,091
            
            
            88,4652005Net
                sales to external customers
            
            $
            37,711
            
            $
            20,759
            
            $
            117
            
            $
            58,587Income
                (loss) before income taxes *
            
            
            3,197
            
            
            285
            
            
            (1,126
            )
            
            2,356Identifiable
                assets
            
            
            39,683
            
            
            49,155
            
            
            4,479
            
            
            93,317








*Minority
      interest in subsidiary income of $0 and $11 is included in “Corporate and Other”
and in “Total” for the three months ended March 31, 2006 and 2005, respectively.


10
 Index


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, 2006 and 2005.
      The Company has rounded its results to the nearest $0.1 million increment in
      the
      narratives discussing the Company’s operating results.





Results
      of Operations





**Three-month
      periods ended March 31, 2006 and 2005 (first quarter)**





The
      following table summarizes changes in the Company’s consolidated and segment
      results of operations (in millions) and as a percentage of net sales for the
      first quarter ended March 31, 2006 and 2005:








CONSOLIDATED
                DATA
            
            1st
                Quarter 2006 vs. 2005
              Increase
              (Decrease)
            
            Percent
                of Net SalesAmount
              (mil)
            
            Percent
              Change
            
            2006
            
            2005Net
                sales
            
            $
            1.8
            
            
            3.1
            
            
            100.0
            %
            
            100.0
            %Gross
                profit
            
            
            (0.5
            )
            
            (4.9
            )
            
            15.4
            
            
            16.6Selling
                and administrative expenses
            
            
            (0.4
            )
            
            (5.4
            )
            
            (10.6
            )
            
            (11.6
            )Interest
                expense
            
            
            -
            
            
            -
            
            
            (1.1
            )
            
            (1.1
            )Other
                income (expense)
            
            
            -
            
            
            -
            
            
            0.1
            
            
            0.1Income
                before income taxes
            
            
            (0.1
            )
            
            (4.9
            )
            
            3.8
            
            
            4.0Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            (1.5
            )
            
            (1.5
            )Minority
                interest in subsidiary
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                income
            
            $
            (0.1
            )
            
            (6.1
            )
            
            2.3
            %
            
            2.5
            %





SEGMENT
                DATA
            
            1st
                Quarter 2006 vs. 2005
              Increase
              (Decrease)
            
            Percent
                of Net SalesAmount
              (mils)
            
            Percent
              Change
            
            2006
            
            2005Net
                SalesTrailers
            
            $
            2.1
            
            
            5.5
            
            
            65.8
            %
            
            64.4
            %Motorcoach
            
            
            (0.1
            )
            
            (0.5
            )
            
            34.2
            
            
            35.4Corporate
                and other
            
            
            -
            
            
            NM
            
            
            -
            
            
            0.2Income
                before income taxesTrailers
            
            $
            (0.1
            )
            
            (1.9
            )
            
            5.2
            %
            
            5.5
            %Motorcoach
            
            
            (0.4
            )
            
            NM
            
            
            (0.2
            )
            
            0.5Corporate
                and other
            
            
            0.4
            
            
            31.4
            
            
            (1.3
            )
            
            (1.9
            )


*
      NM
      means change not quantitatively significant








On
      a
      consolidated basis, the Company’s net income for the first quarter ended March
      31, 2006 was $1.4 million or $0.12 cents per diluted share, compared with net
      income of $1.5 million, or $0.13 cents per diluted share for the first quarter
      of 2005. The lower first quarter net income results in 2006 were primarily
      a
      result of decreased gross profit in the motor coach division due to changes
      in
      the mix of new and used coach sales, partially offset by decreased operating
      expenses due to reduced bonus accruals compared to the same period of 2005.





Consolidated
      net sales for the first quarter of 2006 increased 3.1 percent ($1.8 million)
      to
      $60.4 million compared to net sales of $58.6 million for the first quarter
      of
      2005. For the trailer segment, net sales of specialty trailers and transporters
      increased by 5.5 percent ($2.1 million) in 2006 compared to the first quarter
      of
      2005 even though total unit sales in 2006 were flat compared to 2005. There
      were
      increases in unit sales in some product categories, while others decreased
      in
      unit volume. The increase in sales was the result of an increase in average
      net
      revenue per unit sold, which increased by 5.8 percent in 2006 compared to 2005.
      The average net revenue increase reflects primarily the favorable impact from
      the 4 percent price increase


11
 Index


effective
      January 1, 2006 and the 4.5 percent aluminum surcharge effective January 17,
      2006, as well as changes in product mix. Motorcoach segment net sales decreased
      by 0.5 percent ($0.1 million) in the first quarter of 2006 compared to the
      same
      quarter of 2005. New unit sales were unchanged and used unit sales increased
      by
      5.6 percent. While total unit sales volume increased by 3.4 percent, the average
      net revenue per motorcoach unit sold in 2006 decreased by 3.3 percent compared
      with the same quarter of 2005. This was due to lower revenue per unit on new
      motorcoach sales.





Consolidated
      gross profit margin decreased by 4.9 percent ($0.5 million) to $9.3 million
      for
      the first quarter of 2006 from $9.8 million for the same quarter in 2005 as
      slightly increased gross profit in the trailer segment was more than offset
      by a
      decreased gross profit in the motorcoach segment. As a percentage of net sales,
      consolidated gross profit margin for the quarter was 15.4 percent in 2005
      compared to 16.6 percent in 2005 due to increased material cost and lower
      average selling prices for new motorcoaches. Total trailer segment gross profit
      increased by less than $0.1 million in 2006, as increased material and other
      costs largely offset the increased net sales revenue. Trailer segment gross
      profit as a percent of sales decreased by 0.8 percentage points in the first
      quarter of 2006 compared to 2005. Motorcoach segment total gross margin
      decreased by $0.4 million in 2006, primarily the result of lower average selling
      prices and margins for new units compared to 2005. Motorcoach segment gross
      profit margin as a percentage of sales decreased by 2.1 percentage points in
      the
      first quarter of 2006 compared to 2005. In the first quarter of 2005, $0.1
      million was contributed by the operations of Featherlite Chemicals, LLC, which
      was discontinued at the end of 2005.





Consolidated
      selling and administrative expenses decreased by $0.4 million (5.4 percent)
      in
      the first quarter of 2006, to $6.4 million from $6.8 million in the first
      quarter of 2005. As a percentage of sales, these expenses decreased to
      10.6 **** percent
      in 2006 from 11.6 percent in 2005. Trailer segment expenses increased by $0.1
      million compared to 2005 and motorcoach segment expenses decreased $0.1 million
      in 2006 compared to 2005. Corporate and other expenses decreased by $0.4 million
      in 2006 compared to the first quarter of 2005, primarily reflecting a reduced
      accrual of executive management performance bonuses and a market value
      write-down of the Company aircraft in 2005 that was unnecessary in 2006.





Consolidated
      interest expense increased **** by
      less
      that $0.1 million **** in
      the
      first quarter of 2006 compared to the same quarter in 2005 as higher interest
      rates in 2006 were offset by lower average borrowings. Other income, net, was
      unchanged in the first quarter of 2006 compared to the same quarter in 2005.





Minority
      interest in the Company’s 51 percent owned subsidiary’s income was $0 in the
      first quarter of 2006 compared to $11,000 in the same quarter in 2005. This
      amount represents the equity interest of the 49 percent minority owned share
      of
      pre-tax losses in Featherlite Chemicals, LLC (FCC) that was formed in 2003
      to
      market car care products. The accompanying condensed consolidated statement
      of
      operations for the quarter includes the accounts of FCC, which reflected a
      total
      pre-tax operating income of $0 for the first quarter of 2006 compared to income
      of $24,000 in 2005. This activity has been discontinued due to lack of
      profitable operations at the end of 2005.





Consolidated
      income before taxes (IBT) decreased by approximately $0.1 million in the first
      quarter of 2006 to $2.3 million compared to $2.4 million the same quarter in
      2005. This decrease in 2006 compared to 2005 reflects decreases of less than
      $0.1 million and $0.4 million in trailer and motorcoach segment IBT,
      respectively, offset by a decrease of $0.3 million in corporate and other
      expenses for the reasons discussed above.





Income
      tax provision rates of approximately 39 and 38 percent were used in 2006 and
      2005, respectively, reflecting the federal corporate tax rate and effective
      state tax rates estimated for each year. A higher rate is being used for 2006
      because of the reduced availability of state loss carryforwards were used
      previously.








**Outlook**





The
      Company remains cautiously optimistic about the level of sales for the remainder
      of 2006. At March 31, 2006, the trailer order backlog was $16.3 million compared
      to $18.1 million at December 31, 2005 and $12.0 million at March 31, 2005.
      At
      March 31, 2006, the motorcoach backlog was $1.1 million compared to $2.3 million
      at December 31, 2005 and $5.7 million at March 31, 2005. While trailer backlog
      has decreased slightly from December 31, 2005, order levels have remained strong
      in 2006. The motorcoach backlog has decreased from both December 31, 2005 and
      March 31, 2005 levels. While fluctuations in motorcoach backlog and inventory
      levels will occur with variations in customer preferences in buying completed
      coaches rather than ordering custom coaches for future delivery, management
      expects that demand for new coaches during the remainder of 2006 to be similar
      to the demand experienced in 2005. If the rise in gasoline prices or other
      future events harm the general economy, the Company may experience reduced
      demand for its products. There is continuing focus by the


12
 Index


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 generating orders sufficient to meet management’s expectations.





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 equestrian events, 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 intends
      to continue introducing new models and models with enhanced features. It also
      continues to expand its trailer dealer organization in unserved or underserved
      markets.








**Liquidity
      and Capital Resources**





***General***





The
      Company’s liquidity is primarily affected by its cash flow from operations
      together with changes in amounts available to borrow on its approved lines
      of
      credit with U.S. Bank and GE. During the three months ended March 31, 2006,
      the
      Company’s operating activities provided net cash of $5.1 million, as net income
      and non-cash depreciation and amortization charges provided $1.9 million and
      working capital changes provided $3.2 million. At March 31, 2006, the Company
      had approximately $14.2 million available to borrow under its credit lines
      compared to $12.3 million at December 31, 2005, an increase of $1.9 million
      as
      availability under both lines increased due to changes in eligible inventories
      and reduced borrowings.





The
      Company’s liquidity can be measured by two key indicators, its current ratio and
      its ratio of debt to shareholders’ investment. The Company’s ratio of current
      assets to current liabilities was 1.57 to 1 at March 31, 2006, compared with
      a
      ratio of 1.56 to 1 at December 31, 2005. **** Both
      current assets and current liabilities were substantially unchanged. The ratio
      of total debt to shareholders’ investment decreased to 0.94 to 1 at March 31,
      2006 from 1.10 to 1 at December 31, 2005. This ratio improved as stockholders’
investment increased during 2006 as a result of additional net income for the
      year and reduced use of credit lines.





To
      maintain an efficient level of trailer production, increased expenditures for
      working capital items have been and may continue to be required from time to
      time to support production levels in excess of sales. Production levels in
      excess of new order levels during the first quarter of 2006 have resulted in
      the
      growth of finished trailer inventories by $0.4 million from December 31, 2005.
      It is the Company’s expectation that a substantial portion of these additional
      trailers will be sold to dealers in the coming months. However, there is no
      assurance this will occur, which could adversely impact the liquidity of the
      Company.





To
      maintain a level motorcoach production schedule, production may begin on coaches
      before an order has been received from a specific buyer. As of March 31, 2006,
      approximately 93 percent of the coaches in production and to be completed over
      the next four months have not been sold to specific customers as compared to
      78
      percent at March 31, 2005 and 86 percent at December 31, 2005. For the three
      months ended March 31 2006, total units sold equaled units produced and new
      coach inventory valuation increased slightly. While it is the Company’s
      expectation that substantially all of these motorcoaches will be sold to
      specific customers, there is no assurance this will occur. Accordingly, this
      could adversely impact the liquidity of the Company.





During
      the second quarter of 2006, the Company has scheduled payments for debt
      principal and interest, expiring motorcoach shell consignment agreements, and
      other fixed obligations that will require cash flows of $7.9 million in addition
      to amounts required to cover checks not yet presented for payment, which at
      March 31, 2006 was $3.2 million. At March 31, 2006 the Company had availability
      on its credit lines of approximately $14.2 million. Additional payments may
      be
      required for the commitments and contingencies referred to in Note 4 of the
      unaudited condensed consolidated financial statements included in this quarterly
      report on Form 10-Q. These payments are expected to be funded by cash generated
      from operations, including reductions in receivable and inventory levels, as
      well as availability on existing lines of credit.





13
 Index


***Credit
      Facilities and Other Financing Activities***





The
      following, read in conjunction with Note 3 to the unaudited condensed
      consolidated financial statements included in this quarterly report on Form
      10-Q, is a summary of the Company’s agreements with its principal
      lenders:





1.
      The
      Company’s Amended and Restated Loan Agreement with U.S. Bank is in an aggregate
      amount of $27.8 million, including $17.0 million in an asset-based revolving
      credit commitment, $8.1 million in term loans on existing real estate and
      equipment and $2.7 million as a term loan for new equipment purchases. As of
      March 31, 2006, asset-based availability on the revolving credit line was $16.8
      million with outstanding borrowings of $2.4 million, outstanding letters of
      credit of $2.3 million and remaining borrowing availability of $12.1 million.
      The $8.1 million term notes are repayable over varying terms ending October
      31,
      2008 with aggregate monthly principal payments of $106,000 plus interest until
      maturity. Monthly principal payments are required on the outstanding principal
      balance on the new equipment term loan based on a 60 month amortization schedule
      and will be determined as borrowings are made on this note with the unpaid
      balance due on October 31, 2008. The Company was in compliance with all the
      covenants of this agreement at March 31, 2006.








2.
      The
      Company’s Amended Wholesale Financing Agreement with GE provides for aggregate
      financing of $25 million on new and used motorcoaches held as inventory by
      the
      Company. As of March 31, 2006, the aggregate availability under this agreement
      based upon motorcoach inventory levels and composition was $17.5 million with
      $15.4 million outstanding and $2.1 million available to borrow. The Company
      was
      in compliance with all the covenants of this agreement at March 31, 2006.








3.
      In
      2003, the Company entered into a Floor Plan Financing Agreement with Regions
      Bank, for aggregate financing of $3.0 million to fund 100 percent of the cost
      of
      new motorcoaches purchased for resale from Foretravel, the manufacturer. During
      2004, the Agreement was amended to provide for use of this line to also fund
      purchases of travel trailers from Coachmen, Inc. In December 2005, this
      agreement was amended to reduce the available line from $3.0 million to $2.0
      million, as the Company’s need for this financing has been reduced as the
      Foretravel dealership was discontinued. As of March 31, 2006, $0.1 million
      was
      outstanding under this agreement. The Company was in compliance with the
      financial covenants of this agreement at March 31, 2006.





4.
      The
      Company’s motorcoach shell manufacturer provides shells to the Company on a four
      month consignment basis. Payment is required at the time a motorcoach is sold
      or
      at the end of the consignment period, whichever occurs first. At March 31,
      2006,
      the amount due to the Company’s shell manufacturer for consigned shells was $4.4
      million and there were no shells with an expired consignment term.





5.
      On
      January 21, 2005, the Company entered into a Mortgage Agreement with GE
      Commercial Finance Business Property Corporation (GE Property) whereby the
      Company borrowed the funds to purchase for $5.3 million the Sanford, Florida
      property it uses as a sales and service center for the motorcoach division.
      The
      mortgage note matures on February 1, 2017, bears interest at 6.49 percent per
      annum and requires monthly principal and interest payments of $52,874.








***Certain
      Other Obligations***





As described in Note 4 to the unaudited condensed consolidated financial
      statements included in this annual report on Form 10-Q, the Company is subject
      to a number of commitments and contingencies that may affect its
      liquidity.








***Statement
      of Cash Flows***





Following
      is a discussion of the principal components of the Company’s cash flow for the
      three months ended March 31, 2006, as reflected in the condensed consolidated
      statements of cash flow:




Operating
      activities generated net cash of $5.1 million. The Company’s net income of $1.4
      million included non-cash depreciation and amortization of $0.5 million. Changes
      in working capital items provided an additional $3.2 million in cash flow.
      Net
      changes in receivables, inventories and prepaid assets was cash neutral, with
      a
      decrease in inventory providing $0.9


14
 Index


million
      and a decrease in prepaid assets providing $0.4, that was offset by an increase
      of $1.1 million in accounts receivable and $0.2 million in leased trailers.
      Net
      changes in accounts payable, accrued liabilities and other current liabilities
      provided net cash of $3.2 million. Changes in these liabilities included: an
      increase of $1.8 million in accounts payable as a result of higher purchasing
      activity and raw material inventory levels at the trailer division, an increase
      of $1.2 million in motorcoach shells payable as the number of shells in process
      increased; a decrease of $0.1 million in customer deposits and a $0.3 million
      increase in accrued liabilities.





The
      Company’s investing activities used cash of $0.4 million. Purchases of plant and
      equipment items totaled $0.5 million and have been financed with cash provided
      by operating activities, while sales of retired equipment provided proceeds
      of
      $0.1 million.





The
      Company’s financing activities used net cash of $4.6 million. Wholesale
      financing borrowings were reduced by $3.0 million and other long term borrowings
      were reduced by $0.5 million. Checks issued but not presented for payment
      decreased by $1.2 million. Borrowings on the U.S. Bank line of credit are used
      to fund these checks as they are presented for payment at the bank. Issuance
      of
      common stock for exercised options provided $0.1 million.





The
      Company believes that its current sources of liquidity will be sufficient to
      fund continued operations and capital requirements for the next twelve months.
      As described above, the Company has agreements with its two major lenders to
      continue funding for the remainder of 2006, assuming ongoing compliance with
      applicable covenants. ****





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 lenders’
consent.








**Off-balance
      sheet arrangements**





As
      of
      March 31, 2006, the Company had no off-balance sheet arrangements or
      transactions with unconsolidated, limited purpose entities.








**Forward-looking
      statements**





We
      have
      made, and may continue to make, various written or verbal forward-looking
      statements with respect to our business, including statements contained in
      this
      quarterly report on Form 10-Q, other filings with the Securities and Exchange
      Commission, and reports to stockholders. Forward looking statements are those
      involving the outcome of future events that are based upon current expectations,
      estimates, forecasts and projections as well as the current beliefs and
      assumptions of our management. Any statement that is not a historical fact,
      including any statement regarding estimates, projections, future trends and
      the
      outcome of events that have not occurred, is a forward-looking statement. The
      Company’s forward-looking statements generally relate to its growth strategy,
      adequacy of and ability to implement price increases to address rising aluminum
      prices, its industry outlook, product development programs, effectiveness of
      sales efforts and marketing affiliations and sufficiency of capital and ability
      to comply with respective debt covenants. Our forward-looking statements
      generally relate to The Private Securities Litigation Reform Act of 1995 which
      provides a safe harbor for forward-looking statements made by up or on our
      behalf.





The
      words
“believe,” “estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,”
“anticipate,” and similar words and expressions are intended to identify
      forward-looking statements. Forward-looking statements speak only as of the
      date
      made, are based on current expectations, are inherently uncertain and should
      be
      viewed with caution. 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 that required by law.





Featherlite
      wishes to caution readers that the factors described in “Risk Factors” in the
      Company’s Annual Report on Form 10-K, among others, in some cases have affected,
      and in the future could affect, Featherlite’s actual results and could cause
      Featherlite’s actual consolidated results to differ materially from those
      expressed in any forward-looking statements made by, or on behalf of,
      Featherlite.


15
 Index


ITEM
      3.  QUANTITATIVE
      & QUALITATIVE DISCLOSURES ABOUT MARKET RISK





*Commodity
      Risk*




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, 2005, as reported
      to
      the Company by its suppliers was $0.92 in 2005 **,** $0.85 in
      2004, and $0.68 in 2003. The current average aluminum cost per pound for 2006
      delivery was $1.15 for the first three months of 2006. The Company’s cost of
      aluminum, which was approximately 15 percent of consolidated cost of sales
      in
      2005, varies from these market prices due to vendor processing charges, timing
      of purchases, and contractual commitments with suppliers for specific prices
      and
      other factors. In 2004, the Company obtained commitments from suppliers to
      provide, at an agreed upon fixed price, more than 90 percent of its anticipated
      requirements for 2004, which reduced substantially the risk of aluminum cost
      fluctuations for the year. The Company did not obtain such commitments for
      2005
      nor has it obtained such commitments for 2006.  In
      the
      event the Company elects to enter into fixed-price aluminum contracts, there
      is
      a potential risk of loss related to such contracts if there is a substantial
      drop in the actual cost of aluminum in relation to the contract price, which
      would affect the competitive price of the Company’s products.





The
      Company initiated a 4 percent price increase for substantially all trailer
      products other than interior packages that are invoiced after December 31,
      2005
      unless they were ordered and in backlog at December 31, 2005. The Company also
      initiated a 4.5 percent aluminum surcharge on all aluminum trailer models
      invoiced after January 17, 2006 unless they were ordered and in backlog at
      January 17, 2006. Management estimates that the price increase was effective
      for
      approximately 80 percent of eligible trailers and the surcharge was effective
      for approximately 40 percent of the eligible trailers shipped during the first
      quarter of 2006 and that these price increases should become fully effective
      for
      all shipments during the second quarter of 2006. Management believes this price
      increase and the surcharge will cover the higher aluminum costs in 2006 but
      may
      not cover other cost increases as well. If the cost of aluminum increases
      significantly above current levels and the Company cannot increase its product
      prices sufficiently to cover such increases, the Company’s results of operations
      may be harmed. Based upon 2005 annual pounds used, a price increase for aluminum
      of $0.01 per pound would reduce the Company’s future net income by approximately
      $132,000 per year.








*Interest
      Rate Risk*





The
      Company is exposed to market risks related to changes in U.S. and international
      interest rates. Approximately $22 million of the Company’s debt bears interest
      at a variable rate. An interest rate increase by one percentage point would
      reduce the Company’s future annual net income by approximately $135,000 at
      current debt levels.




Item
      4. CONTROLS
      AND PROCEDURES





(a)  Evaluation
      of disclosure controls and procedures. After evaluating the effectiveness of
      the
      design and operation of Company’s “disclosure controls and procedures” pursuant
      to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act)
      as
      of the end of the period covered by this report, our chief executive officer
      and
      chief financial officer, with the participation of the Company’s management,
      have concluded that the Company’s disclosure controls and procedures are
      effective to ensure that information that is required to be disclosed by the
      Company in reports that it files under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the rules of the
      Securities Exchange Commission.





(b)
      Changes in internal controls. There were no changes in our internal control
      over
      financial reporting that occurred during the period covered by this quarterly
      report that have materially affected, or are reasonably likely to materially
      affect the Company’s internal control over financial reporting.








**PART
      II. OTHER INFORMATION**





Item
      1A.  RISK
      FACTORS





In
      addition to the other information set forth in this report, including the
      important information in “Forward-looking statements,” you should carefully
      consider the factors discussed in our Annual Report on Form 10-K for the year
      ended December 31, 2005. Those factors, if they were to occur, could cause
      our
      actual results to differ materially from those


16
 Index


expressed
      in our forward-looking statements in this report, and materially adversely
      affect our financial condition or future results. Although we are not aware
      of
      any other factors that we currently anticipate will cause our forward-looking
      statements to differ materially from our future actual results, or materially
      affect the Company’s financial condition or future results, additional risks and
      uncertainties not currently known to us or that we currently deem to be
      immaterial might materially adversely affect our actual business, financial
      condition and/or operating results.








Item
      6.  EXHIBITS





See
      Exhibit Index on page following signatures.








**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)







**FEATHERLITE,
              INC.**Date: May
              10,
              2006
            By:
            /s/ CONRAD
              D.
              CLEMENTPresident
&
              CEO





**FEATHERLITE,
              INC.**Date: May
              10,
              2006
            By:
            /s/ JEFFERY
              A. MASONChief
              Financial Officer





17
 Index




**EXHIBIT
      INDEX**


Form
      10-Q


Quarter
      ended March 31, 2006





Exhibit
      No.         Description








**31.1**
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.**31.2**
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.**32.1**
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.**32.2**
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.





18
 Index