<PAGE>



                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20569

                            ------------------------------

                                      FORM 10-K

---    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 FOR THE FISCAL YEAR ENDED ___________ OR

 X
---    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 1997 TO
       JUNE 30, 1997.

                           COMMISSION FILE NUMBER 33-82650

                                GENMAR HOLDINGS, INC.
                (Exact name of Registrant as specified in its charter)

          DELAWARE                                          41-1778106
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                        Identification No.)


    100 SOUTH FIFTH STREET                                   55402
          SUITE 2400                                       (Zip Code)
    MINNEAPOLIS, MINNESOTA
(Address of Principal Executive Offices)


          Registrant's telephone number, including area code: (612) 339-7900

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

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

    Indicate by check mark whether the Registrant (1) has filed reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Company was required to file such reports), and (2) has been subject to such
filing requirements for the past ninety days:  Yes X  No
                                                  ---   ---

    The aggregate market value of the Common Stock of Genmar Holdings, Inc.
held on October 10, 1997 by persons other than officers, directors, and other
persons considered by management to be affiliates of the Company is zero.

    On October 10, 1997, there were 1,779,415 shares of Common Stock, $.01 par
value, of Genmar Holdings, Inc. outstanding.

    Documents incorporated by reference: None

                     --------------------------------------------


                                GENMAR HOLDINGS, INC.
                                      FORM 10-K

<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES

                                      FORM 10-K

                        FOR THE SIX MONTHS ENDED JUNE 30, 1997

                                        PART I

                   FISCAL YEAR 1997 REFERS TO THE SIX MONTHS ENDED

                                    JUNE 30, 1997


ITEM 1.  BUSINESS.

DEVELOPMENT OF BUSINESS

    Genmar Holdings, Inc., a Delaware corporation (the "Company"), through its
subsidiaries, operates within a single industry segment, the manufacture and
marketing of motorized pleasure boats. The Company was organized in March 1994
to combine the operations of Minstar, Inc. ("Minstar") and Miramar Marine
Corporation ("Miramar"), each of which had been under the control of investor
groups led by Irwin L. Jacobs, as part of a strategic and comprehensive
financial restructuring aimed at combining their resources under a single
centralized and integrated corporate structure (the "Restructuring"). References
herein to the "Company" mean the Company and its subsidiaries, unless the
context otherwise requires. References to activities of, and financial
information with respect to, the Company prior to its formation are to the
corresponding activities of Minstar and Miramar and their respective
subsidiaries, unless the context otherwise requires.

    Minstar was incorporated in Minnesota in 1962 and was subsequently
reincorporated in Delaware in September 1985. Minstar expanded its businesses
through several major acquisitions during 1983 through 1985, including the
acquisition of AMF Incorporated ("AMF") in 1985.  Subsequently, Minstar disposed
of all of the business operations originally obtained in these acquisitions
other than those engaged in the manufacture and sale of motorized pleasure
boats. In November 1988, Minstar was acquired in a leveraged buyout transaction
by IJ Holdings Corp. ("IJ Holdings"), which was owned by an investor group led
by Irwin L. Jacobs. Since 1988, Minstar's operations have consisted primarily of
its wholly-owned boat manufacturing subsidiary, Genmar Industries, Inc. ("Genmar
Industries"), a principal operating subsidiary of the Company. In December 1994,
Minstar was merged into IJ Holdings and IJ Holdings changed its name to Minstar,
Inc.

    Miramar was incorporated in Texas in 1985 and was reincorporated in
Delaware in 1991.  Miramar was formed to acquire Carver Boat Corporation
("Carver"), which originally began operations in 1954 as a small, closely-held
boat manufacturer. In July 1987, Miramar acquired Wood Manufacturing Company,
Inc. ("Wood"), which manufactures the RANGER line of fishing boats, and which
had been founded in 1968 by two prominent figures in the tournament bass fishing
industry. Miramar was acquired in 1991 by Jacobs Management Corporation ("JMC"),
a corporation affiliated with Irwin L. Jacobs. In December 1994, Miramar was
merged into Carver and Wood became a wholly-owned subsidiary of Carver.

    Effective June 2, 1997, the Company changed its fiscal year end from
December 31 to June 30. Accordingly, all general references to years relate to
fiscal years unless otherwise noted.


                                          2
<PAGE>

PRODUCTS

    The Company is a leading manufacturer of motorized pleasure boats. The
Company markets a complete product line of luxury yachts, recreational
powerboats and fishing boats through a network of more than 1,000 independent
authorized dealers. Based on industry and Company information, management
believes the Company is one of the largest domestic manufacturers in the
industry. The Company markets its boats under such well-established trade names
as HATTERAS, CARVER, TROJAN, WELLCRAFT, LARSON, GLASTRON, EXCEL, RANGER, LUND,
CRESTLINER AND AQUASPORT. The Company's principal operating subsidiaries are
Genmar Industries and Carver.

    The following table provides a brief description of the Company's products
by category, including product line and trade name, number of models
manufactured, overall length, retail price range, and description of boats
manufactured:


<TABLE>
<CAPTION>


  PRODUCT LINE AND
  ----------------            NUMBER      OVERALL
    TRADE NAME                OF MODELS   LENGTH             RETAIL PRICE RANGE                DESCRIPTION
    ----------                ---------  ---------    --------------------------------     -----------------------------------
<S>                            <C>     <C>            <C>          <C>    <C>               <C>
LUXURY YACHTS:
 Hatteras                       39     82' -130'      $3,100,000    to    $9,200,000        Custom yachts.
                                        40' -74'         400,000    to     2,200,000        Motor and cockpit motor yachts.
                                        39' -90'         375,000    to     4,200,000        Sportfishing convertibles.

 Carver                         17      25' -53'          50,000    to       750,000        Motor yachts and wide-beam cruisers
 Trojan                          4      32' -44'         100,000    to       450,000        Express yachts.

RECREATIONAL POWERBOATS:
 Wellcraft                      24      20' -45'          22,000    to       300,000        Runabouts, wide-beam
                                                                                            sport and performance cruisers,
                                                                                            and performance boats
 Larson                         27      16' -31'           5,000    to        95,000        Runabouts, wide-beam and narrow-beam
                                                                                            cruisers and deckboats.
 Glastron                       22      16' -24'           5,000    to        49,000        Runabouts, narrow-beam cruisers and
                                                                                            performance boats.
 Excel                          12      17' -26'          14,000    to        47,000        Runabouts and narrow-beam cruisers.

FISHING BOATS:
 Lund                           50      12' -24'           1,000    to        35,000        Premium aluminum fishing boats and
                                                                                            narrow-beam cruisers.
 Ranger                         45      16' -25'          12,000    to        60,000        Fiberglass and aluminum bass,
                                                                                            multi-species and saltwater fishing
                                                                                            boats.
 Crestliner                     43      12' -24'             850    to        33,000        Aluminum fish'n ski, narrow-beam
                                                                                            sportfishing cruisers, fishing boats,
                                                                                            pontoons and deckboats.
 Wellcraft                      10      16' -33'          10,000    to       193,000        Fiberglass offshore fishing boats.

 Aquasport                       9      16' -25'          10,000    to        49,000        Fiberglass offshore fishing boats.

</TABLE>

                                          3
<PAGE>

     From 12 foot aluminum fishing boats to 130 foot custom luxury yachts, the
Company distinguishes itself by offering products to the luxury market, the
family recreational market and the fishing boat market, as well as many smaller
niche markets.

LUXURY YACHTS

     The Company's line of luxury yachts includes ocean-going luxury motor
yachts, cockpit motor yachts, custom yachts, cabin cruisers and sportfishing
convertibles sold under the trade names HATTERAS, CARVER and TROJAN.

     LUXURY MOTOR YACHTS AND CABIN CRUISERS. The Company's products in the
luxury category of the marine market provide complete, self-contained living
accommodations. Products in this market provide the affluent consumer with
accommodations so complete that they may serve as a residence on water.

     HATTERAS products serve the "prestige" market of experienced boat owners
seeking a "top of the line" luxury yacht. Priced at retail between $400,000 and
$9,200,000 and ranging in size from 40 to 130 feet, HATTERAS yachts are marketed
by yacht dealers worldwide.

     CARVER manufactures motor yachts ranging in length from 25 to 53 feet
designed to appeal to both experienced boating enthusiasts and first-time
buyers. CARVER yachts range from aft cabin and cockpit models to fly bridge
sedan cruisers, at retail prices ranging from $50,000 to $750,000, and are
targeted to consumers who desire luxury yachts with superior accommodations and
value.

     TROJAN express yachts emphasize style and individualism and are targeted
toward younger buyers in the Euro-inspired luxury express yacht market. TROJAN
yachts are offered in four models, ranging from 32 to 44 feet in length, and
ranging in price at retail from $100,000 to $450,000.

      SPORTFISHING CONVERTIBLES. Sportfishing convertibles (boats designed for
deep-sea fishing and equipped with many of the features and accommodations of a
luxury yacht) are currently sold under the HATTERAS trade name. HATTERAS
sportfishing convertibles range in length from 39 to 90 feet, and in retail
price from $375,000 to $4,200,000. The sportfishing convertibles have the same
name recognition and reputation as HATTERAS motor yachts and are sold and
marketed by yacht dealers worldwide.

RECREATIONAL POWERBOATS

     The Company's line of recreational powerboats includes runabouts,
sportboats, performance boats, narrow-beam and wide-beam cruisers and deckboats
sold under the tradenames WELLCRAFT, LARSON, GLASTRON and EXCEL.

     RUNABOUTS, SPORTBOATS, CRUISERS AND DECKBOATS. The Company's runabouts,
sportboats, narrow-beam and wide-beam cruisers and deckboats are aimed at the
family recreational market. From WELLCRAFT, which markets a wide range of boats,
to LARSON, with its 84 year tradition of boat building experience, to the EXCEL
product line, the Company believes that its lineup of model offerings give
buyers performance and dependability at an affordable price for family fun.

     WELLCRAFT manufactures 24 models of fiberglass powerboats designed to
appeal to both experienced boating enthusiasts and first-time buyers.
WELLCRAFT'S wide-beam sport cruisers range in length from 28 to 36 feet and are
priced at retail from approximately $65,000 to $150,000, while its sportboats
and runabouts range from 20 to 26 feet in length and are priced at retail from
$22,000 to $37,000. LARSON boats are offered in 27 models ranging from 16 to 31
feet in length, at retail prices ranging from $5,000 to $95,000. GLASTRON
features entry-level and mid-priced runabouts, narrow-beam cruisers and
performance boats. GLASTRON boats are offered in 22 models ranging from 16 to 24
feet in length, and retail at prices from $5,000 to $49,000. EXCEL is a
family-oriented product line built around


                                          4
<PAGE>

the concept of affordability, style, quality and features. EXCEL offers complete
packages which consist of a boat, motor and trailer that target the
value-conscious buyer. EXCEL runabouts and narrow-beam cruisers are offered in
12 models ranging from 17 to 26 feet in length and are priced at retail from
$14,000 to $47,000. The Company annually introduces several new models under the
WELLCRAFT, LARSON, and GLASTRON trademarks.

     PERFORMANCE SPORTBOATS AND CRUISERS. The Company's SCARAB fiberglass
performance boats, manufactured by WELLCRAFT, are market leaders in their class.
SCARAB boats are targeted at the serious boating enthusiast and include models
with cabins and limited live-aboard capability. SCARAB boats are used in the
performance boat racing circuit and have set numerous time and speed records.
Offerings in this product category range in length from 19 to 43 feet and are
priced at retail from $20,000 to $243,000. The Company's line of performance
cruisers are manufactured by Riviera Marine in Australia and are marketed
through Wellcraft to dealers worldwide.  These models are designed to appeal to
customers desiring both offshore performance characteristics and full cruising
amenities.  Current offerings range in length from 38 to 45 feet and are priced
at retail from approximately $225,000 to $300,000.

FISHING BOATS

     The Company's fishing boats include both aluminum and fiberglass inland
freshwater and fiberglass offshore saltwater fishing boats sold under the brand
names RANGER, LUND, CRESTLINER, WELLCRAFT, AQUASPORT and CAJUN. Products in this
market are aimed at the serious fishing enthusiast and more casual fisherman
seeking a high-quality product designed with the features desired and demanded
by customers. RANGER, which manufactures and markets its fiberglass bass boats
to those who enjoy serious bass fishing, also offers a line of aluminum fishing
boats. Management believes, based on the use of RANGER boats in major national
bass fishing tournaments, that the Company's RANGER boats enjoy wider use among
professional bass tournament fishermen than any other brand.  RANGER fishing
boats range in length from 16 to 25 feet and are priced at retail from $12,000
to $60,000.

     LUND has manufactured aluminum fishing boats since 1948. Lund's product
offerings include premium quality fishing boats ranging from basic utility
models to tournament fishing models, and narrow beam fishing cruisers.  LUND
offers 50 models ranging from 12 to 24 feet in length, at retail prices ranging
from $1,000 to $35,000.

     CRESTLINER offers aluminum boats in 43 models ranging from 12 to 24 feet in
length. CRESTLINER boats are priced at retail from $850 to $33,000. AQUASPORT
boats are offered in 9 models ranging in length from 16 to 25 feet, at retail
prices ranging from $10,000 to $49,000. WELLCRAFT fishing boats are available in
10 models ranging from 16 to 33 feet in length, at retail prices ranging from
$10,000 to $193,000.

MARKETING AND SALES

     The Company's products are sold primarily in the United States
(approximately 92% of fiscal year 1997 net revenues). The Company also
manufactures certain LUND products and distributes LARSON, GLASTRON, WELLCRAFT,
EXCEL and LUND boats in Canada through Genmar Boats Canada, Inc., an indirect
wholly-owned subsidiary of the Company.

     The Company's products are generally marketed worldwide through independent
dealer networks. Independent dealers are primarily responsible for marketing
motorized pleasure boats to the retail consumer. The Company augments its
dealers' marketing efforts, among other methods, by advertising in
international, national and regional boating and other recreation magazines, by
furnishing promotional assistance at international, national or regional boat
shows, by participating in special promotional programs with other producers of
consumer goods and certain retailers and by providing Company-sponsored retail
finance and other programs designed to assist its dealers in selling and
marketing Company products.


                                          5
<PAGE>

     The Company's sales are made through more than 1,000 independent,
authorized dealers. Many of these dealers carry the products of only one or two
of the Company's operating units and most are not exclusive to the Company.
Although the Company has long-standing relationships with many of its dealers,
dealer agreements generally are for a term of one year. No single dealer
accounted for more than 10% of the Company's net revenues in fiscal year 1997.

     The Company sponsors various programs to provide its dealers with marketing
and financial assistance and to encourage them to offer broader lines of the
Company's products. In addition, the Company's dealer incentive programs
encourage dealers to purchase inventory during the off-season, which helps
minimize seasonal fluctuations in the Company's manufacturing operations. The
Company has continued its dealer assistance and other marketing programs in an
effort to strengthen its dealer base, increase market penetration and facilitate
dealers in obtaining wholesale and retail financing.

     The Company offers various credit terms to qualified dealers who buy the
Company's products, including floor plan financing through third party lending
sources. In most cases, boats are sold to dealers under third-party floor plan
financing arrangements or cash on delivery.  Foreign sales are financed
primarily under letter of credit terms.  In a typical floor plan financing
arrangement, an institutional lender agrees to provide to a dealer a line of
credit in a specified amount for the purchase of inventory which secures such
credit. The Company, in turn, agrees to indemnify the lender against loss up to
a specified aggregate amount arising from defaults by dealers financed by such
lender. Such indemnification is generally made through limited recourse
liability and the repurchase by the Company of boats which have been repossessed
by the lender. For the six months ended June 30, 1997, approximately $136
million of the Company's net revenues were financed through such floor plan
financing arrangements. The Company incurred $.6 million in recourse losses
under these arrangements in the six months ended June 30, 1997 and $.4 million
in 1996. No recourse losses were incurred during 1995 and 1994.  As of June 30,
1997, subsidiaries of the Company were contingently liable to repurchase
inventory in the aggregate maximum amount of $41.7 million, and had contingent
recourse liability in the aggregate maximum amount of $12.3 million.

     Each of the Company's operating units holds an annual dealer meeting, at
which the operating unit promotes its line for the new model year (which
commences on July 1st) and offers special programs to give dealers an incentive
to order boats for delivery during certain off-season months of the fall and
winter. These programs facilitate earlier movement of the Company's inventory
into distribution and enable each operating unit to manufacture at a relatively
constant rate throughout the year, thereby reducing the impact of seasonal
factors on the Company's operations.  All operating units have ongoing programs
aimed at maintaining inventories at the lowest possible levels. Sales are made
to dealers by the Company's own sales personnel and by independent
manufacturers' representatives.

INVENTORY AND BACKLOG

     Although the Company encourages dealers to place orders for products on a
consistent and continuous basis throughout the year, thereby eliminating the
Company's need to maintain a large stock of products in inventory, each
operating unit's backlog of dealer orders generally peaks shortly after its
annual dealer meeting and is at its lowest levels at calendar year-end and
shortly before the annual dealer meeting.

     With certain exceptions, the Company generally avoids producing boats for
its inventory. As of September 1997, the Company's backlog of orders, net of
estimated cancellations, was approximately $235 million, a decrease of
approximately 17% from the same measurement date one year ago. Approximately $8
million of the September 1997 backlog is for shipments scheduled in July 1998 or
later, while approximately $30 million of the September 1996 backlog was for
shipments scheduled in July, 1997 or later.  Dealer orders are subject to
cancellation at any time prior to shipment.


                                          6
<PAGE>

MANUFACTURING OPERATIONS

     The Company's motorized pleasure boats are manufactured at 10 principal
locations in Arkansas, Florida, Minnesota, North Carolina, Wisconsin and
Manitoba, Canada. The Company continues to focus on increasing operating
efficiency and improving product quality by consolidating and redeploying its
manufacturing capacity and by utilizing new and improved manufacturing
techniques. Over the past several years, the Company has taken steps to close
certain inefficient facilities, including the closure of its Cajun boat
manufacturing facility, located in Louisiana, during the six months ended June
30, 1997, and the planned closure and production relocation of one of its
Hatteras manufacturing facilities located in High Point, North Carolina,
announced as of September 29, 1997. The Company has also sought to gain further
cost-savings and improve plant capacity utilization by gearing certain of its
plants to manufacture boat models under several different trade names, where
appropriate. The Company's use of automation in manufacturing certain of its
boats has also increased in recent years.

     The Company does not manufacture the engines installed in its boats. The
engines installed in the Company's boats are generally specified by dealers at
the time of ordering, usually on the basis of anticipated retail customer
preference. The Company has entered into agreements with Mercury Marine
("Mercury Marine"), a division of Brunswick Corp. ("Brunswick"), and Volvo North
America Corporation ("Volvo"), respectively, whereby the Company has agreed to
purchase inboard and inboard/outdrive engines from Mercury Marine and Volvo. If
the Company fails to purchase certain unit volumes as specified in the
agreements with Mercury Marine and Volvo, loss of certain purchase discounts
and/or penalties may result. Based on the Company's past experiences and current
purchases of engines, management believes that any loss of purchase discounts
and/or penalties will not have a material effect on the Company's operations.
The agreements with Mercury Marine and Volvo expire on June 30, 1998 and August
31, 1999, respectively, unless terminated earlier for specific cause. The
Company also has an agreement with Mercury Marine for the purchase of outboard
engines. The agreement, which will expire on December 31, 2002, contains minimum
annual purchase requirements in order for the Company to earn certain discounts
and/or receive certain rebates. As of June 30, 1997, the Company has received
$1.7 million, as an advance discount against future outboard engine purchases
which is subject to refund if certain minimum purchases are not obtained. The
Company also has an agreement with Outboard Marine Corporation ("OMC") to
pre-rig certain of its products for outboard engines sold by OMC to the
Company's dealers. The Company receives a fee from OMC based on the volume of
pre-rigged products sold to the Company's dealers, subject to penalties if
certain minimum annual purchase requirements are not achieved.

     Although inboard, inboard/outdrive and outboard engines of comparable
quality and cost are available from other manufacturers, should there be a
sudden interruption in the supply of engines from the Company's principal
suppliers (due to any reason, including a protracted strike or other event
affecting production at a supplier's manufacturing facility), the Company might
not be able to obtain engines from other suppliers in sufficient quantities to
meet its near-term production schedules.

COMPETITION

     Competition within the motorized pleasure boat manufacturing industry is
intense, with several hundred manufacturers operating at the national and
regional levels.  The nationally recognized domestic manufacturers competing
with the Company include, among others, Brunswick (through its U.S. Marine,
Boston Whaler and Sea Ray operations), and OMC (through its Chris Craft, Four
Winns and Stratos operations).  Both Brunswick and OMC are vertically
integrated, manufacturing engines as well as boats. Manufacturers also compete
directly with the used boat market and indirectly with other competing
recreational products and activities.


                                          7
<PAGE>

     The Company trademarks of HATTERAS, CARVER, TROJAN, WELLCRAFT, EXCEL,
LARSON, GLASTRON, RANGER, LUND, CRESTLINER and AQUASPORT are well-established
and enjoy international, national and regional recognition. The Company believes
its HATTERAS product line is the market leader in the over 50-foot luxury yacht
segment and that its LUND and RANGER fishing boats are unparalleled in their
reputation and brand loyalty among serious fishing enthusiasts in their markets.
The Company's boats compete with those of other manufacturers primarily on the
basis of their reputation for performance, durability and stability, as well as
their styling and price. Pricing of boats at retail is determined solely by the
dealer.

PATENTS AND TRADEMARKS

     Generally, patents are not significant in the motorized pleasure boat
industry. Trademarks and tradenames do carry importance, and are generally
associated with the name of a particular company or product. The HATTERAS,
CARVER, TROJAN, WELLCRAFT, EXCEL, LARSON, GLASTRON, RANGER, LUND, CRESTLINER and
AQUASPORT trademarks, among others, are owned by the Company and most of the
Company's principal trademarks are registered with the U.S. Patent Office. Other
registered trademarks, such as SCARAB, together with certain styling features
associated with them, are licensed exclusively to the Company. The Company also
is a licensee of certain hull designs developed and/or patented by others.

REGULATION AND ENVIRONMENTAL

     The Company's operations are subject to numerous federal, state and local
laws and regulations relative to the safety and protection of the environment.
Certain materials used in boat manufacturing which are toxic, flammable,
corrosive or reactive are classified by federal and state governments as
"hazardous materials." Control of these substances is regulated by the
Environmental Protection Agency ("EPA") and state environmental protection
agencies.  These government agencies require reports and inspect facilities to
monitor compliance. In addition, under the Comprehensive Environmental Response
Compensation and Liability Act, as amended ("CERCLA"), any generator of
hazardous waste sent to a hazardous waste disposal site is potentially
responsible for the clean-up, remediation and response costs required for such
site in the event the site is not properly operated or closed by the owner or
operator, irrespective of the amount of hazardous waste which the generator sent
to the site.

     Although the Company believes that it is in substantial compliance with all
existing environmental laws and regulations, the Company has, with respect to
its Wellcraft facility in Florida, been assessed certain penalties for alleged
environmental law violations and has agreed to conduct certain remedial action.
In 1995, the Company signed a final consent order with the Florida Department of
Environmental Protection to settle all outstanding issues with respect to an
acetone leak at its plant in Sarasota, Florida, and recorded additional
provisions of $2.2 million to cover the estimated cost of remediation activities
required at this site.  Based on available information, the Company believes
reserves as of June 30, 1997 are adequate to cover such estimated costs.

     Historically, the Company's facilities have used underground storage tanks
("USTs") for storage of certain materials associated with the Company's
operations, including petroleum, acetone, and resins. The Company is currently
in the process of removing the remaining USTs on its properties. As in the past,
in the course of removing such USTs, contamination of soils and groundwater may
be discovered, in which case environmental laws generally would require a
contamination assessment and the implementation of a cleanup plan. The costs
associated with any such necessary remedial action could be significant, but are
not expected to be significant because the Company has no evidence that there
have been material releases from the USTs. In addition, many of the states in
which these tanks are located have state funds available to reimburse owners for
the cost of remedial action associated with petroleum releases from USTs.
However, until the tanks are removed in compliance with environmental laws, the
Company cannot predict with any certainty the nature or extent of contamination,
if any, or potential remedial costs associated therewith.


                                          8
<PAGE>

     In addition to its current regulatory obligations, the Company faces
substantial risks that the practices of some of its current and divested
operations may have created conditions which give rise to liability under
CERCLA, and comparable state statutes. With respect to these potential
liabilities, the Company has been identified as a potentially responsible party
at approximately 10 active sites. In certain instances, the Company also has a
duty to indemnify the current owners for environmental matters related to
operations divested by AMF, including operations divested by AMF prior to its
acquisition by Minstar. The Company currently anticipates total
environmental-related costs associated with its divested operations to range
from approximately $5 million to $6 million, which include CERCLA-type
liabilities, and which costs are likely to be incurred over a period of up to 10
years. The Company made payments relating to environmental matters in connection
with divested businesses of approximately $.3 million for the six months ended
June 30, 1997, and $1.9 million and $.6 million during the years ended December
31, 1996 and 1995 respectively. As of June 30, 1997, based on available
information, the Company has reserves of $7.8 million to account for such
potential exposure with respect to divested operations, and believes that such
reserves are adequate to cover such potential costs. Nevertheless, the nature
and extent of CERCLA proceedings is such that cleanup estimates, the allocated
financial responsibilities of potentially responsible parties, and the degree of
regulatory scrutiny may change over time, and therefore there can be no
certainty that such estimates will ultimately reflect the Company's exposure
with respect to such matters.

     Although capital expenditures related to compliance with environmental laws
are expected to increase in the coming years, the Company does not currently
anticipate that any material expenditures will be required to continue to comply
with existing environmental or safety laws or regulations in connection with the
Company's ongoing operations. However, future costs for compliance cannot be
predicted with precision and there can be no certainty with respect to any costs
the Company may be forced to incur in connection with its historical on-site or
off-site waste disposal. Laws and regulations protecting the environment have
become more stringent in recent years, and may in certain circumstances impose
"strict liability," rendering a person liable for environmental damage without
regard to negligence or fault on the part of such person. In addition,
modifications of existing regulations or the adoption of new regulations in the
future, or unanticipated enforcement actions, particularly with respect to
environmental standards, could require material capital expenditures or
otherwise have a material adverse effect on the Company's operations.

     Motorized pleasure boats must be certified by the manufacturer as meeting
United States Coast Guard specifications. In addition, boat safety is subject to
federal regulation under the Boat Safety Act of 1971, as amended, pursuant to
which boat manufacturers may be required to recall products for replacement of
parts or components that have demonstrated defects affecting safety. The Company
has conducted product recalls in the past to correct safety-related defects.
None of the recalls has had a material adverse effect on the Company and the
Company believes its recall experience has been consistent with the prevailing
industry experience.

EMPLOYEES

     At August 31, 1997, the Company had approximately 4,700 employees, none of
whom were subject to a collective bargaining agreement. Approximately 4,100 of
these employees were engaged in the manufacturing operations. The Company
considers its employee relations to be satisfactory. The Company does not
conduct significant manufacturing operations outside the United States.

ITEM 2.   PROPERTIES

     The Company's boat manufacturing facilities, together with associated boat
storage and office space, aggregate approximately 3.6 million square feet,
substantially all of which are owned by the Company. The following table
summarizes these manufacturing facilities:


                                          9
<PAGE>


<TABLE>
<CAPTION>

           PLANT/LOCATION                                   PRODUCT LINES MANUFACTURED
           --------------                                   --------------------------

<S>                                         <C>
  New Bern, North Carolina                  HATTERAS motor and cockpit motor yachts, sportfishing convertibles over 55 feet and
                                            custom yachts.

  High Point, North Carolina                HATTERAS motor and cockpit motor yachts, sportfishing convertibles 60 feet and under.

  Pulaski, Wisconsin                        CARVER yachts, certain TROJAN express yachts and certain LARSON wide-beam cruisers.

  Sarasota, Florida                         WELLCRAFT larger runabouts, offshore fishing boats, performance boats, narrow and
                                            wide-beam cruisers, AQUASPORT offshore fishing boats and EXCEL cruisers.

  Avon Park, Florida                        WELLCRAFT and EXCEL runabouts and WELLCRAFT and AQUASPORT offshore fishing boats.

  Little Falls, Minnesota                   LARSON runabouts and narrow beam cruisers, GLASTRON runabouts and narrow-beam cruisers.

  Flippin, Arkansas                         RANGER bass boats and fishing boats.

  New York Mills, Minnesota                 LUND aluminum fishing boats and narrow-beam cruisers.

  Little Falls, Minnesota                   CRESTLINER aluminum fishing boats, narrow-beam cruisers and pontoons, RANGER aluminum
                                            bass boats and RANGER pontoons.

  Steinbach, Manitoba (Canada)              Certain LUND and CRESTLINER aluminum fishing boats.

</TABLE>


    The Company believes that its properties are well maintained and are in
good operating condition. Generally, its plants are of reasonably modern,
single-story construction providing for efficient manufacturing and distribution
operations. The properties are deemed to be suitable and of adequate capacity to
serve the Company's near term needs.


ITEM 3.  LEGAL PROCEEDINGS

    The Company and its subsidiaries are parties to legal proceedings,
including product liability claims, that are considered to be either ordinary,
routine litigation incidental to their business or not material to the Company's
consolidated financial position or results of operations. For a discussion of
administrative proceedings involving environmental laws and regulations, see the
section titled "Regulation and Environmental" in Item 1.


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

    The Company did not submit any matter to a vote of its security holders
during the second quarter of the fiscal year covered by this Annual Report.


                                          10
<PAGE>

                                       PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
         MATTERS

    The Company's common stock is not publicly traded and no cash or stock
dividends have been declared or paid. The Company's current credit agreement,
pursuant to which The Bank of New York acts as agent, and the indenture
governing the Company's 13.5% Subordinated Notes (the "Indenture"), restrict the
payment of dividends by the Company. Any future payment of dividends will depend
on applicable contractual restrictions, as well as the financial condition,
capital requirements and earnings of the Company and other factors that the
Company's Board of Directors may deem relevant. As of October 10, 1997,
1,779,415 shares of Company Common Stock were outstanding and held by 27 record
holders.


                                          11
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
         (Dollars in Thousands)

    The Company was formed through the merger and capital restructuring
involving Minstar and Miramar, all entities under the common control of Irwin L.
Jacobs and his affiliates, and has been accounted for essentially as a pooling
of interests and accordingly, the following selected historical financial data
includes the Statements of Operations Data and Balance Sheets Data of Minstar
and Miramar for all periods presented. The selected historical consolidated
financial data presented below under the captions "Statements of Operations
Data" and "Balance Sheets Data at Year End" for the six months ended June 30,
1997 and all years presented have been derived from the audited consolidated
financial statements of the Company.


<TABLE>
<CAPTION>

                                  For the Six
                                  Months Ended
                                    June 30,                          For the Years Ended December 31,
                                                 ----------------------------------------------------------------------
                                      1997           1996          1995            1994           1993           1992
                                  ----------     ----------     ----------     ----------     ----------     ----------

<S>                               <C>            <C>            <C>            <C>            <C>            <C>
STATEMENTS OF OPERATIONS DATA:
 Net revenues                     $  260,848     $  618,056     $  548,559     $  499,435     $  408,822     $  346,505
 Cost of products and services       227,460        530,200        479,617        426,014        356,806        307,408
 Selling and administrative
  expenses                            31,888         64,653         66,171         58,829         53,361         54,821
 Provision for restructuring of
  operations                              --             --             --             --         10,900             --
                                  ----------     ----------     ----------     ----------     ----------     ----------

 Operating profit (loss)               1,500         23,203          2,771         14,592        (12,245)       (15,724)

 Interest expense                    (11,026)       (22,190)       (23,862)       (22,674)       (21,449)       (22,311)
 Investment and other
  income (loss), net (1)                (176)           122         15,477         (8,834)         1,445          3,926
                                  ----------     ----------     ----------     ----------     ----------     ----------

 Income (loss) before income
  taxes and extraordinary item        (9,702)         1,135         (5,614)       (16,916)       (32,249)       (34,109)
 Provision for income taxes             (246)          (860)        (2,090)        (1,040)        (2,949)        (1,749)
                                  ----------     ----------     ----------     ----------     ----------     ----------

 Income (loss) before
  extraordinary item                  (9,948)           275         (7,704)       (17,956)       (35,198)       (35,858)

 Extraordinary loss on
  extinguishment of debt (2)              --             --             --         (6,624)            --             --
                                  ----------     ----------     ----------     ----------     ----------     ----------

 Net income (loss) (3)            $   (9,948)    $      275     $   (7,704)    $  (24,580)    $  (35,198)    $  (35,858)
                                  ----------     ----------     ----------     ----------     ----------     ----------
                                  ----------     ----------     ----------     ----------     ----------     ----------

BALANCE SHEETS DATA AT YEAR END:
 Working capital                  $   47,764     $   48,418     $   75,267     $   73,568     $   38,431     $   51,423
 Total assets                        258,279        271,203        306,678        345,572        257,693        256,463
 Long-term debt, net of current
  maturities                         135,238        124,552        151,445        164,161        174,255        211,429
 Stockholders' (deficit) equity       (3,133)         6,869          6,618         14,232        (65,078)       (77,269)
                                  ----------     ----------     ----------     ----------     ----------     ----------
                                  ----------     ----------     ----------     ----------     ----------     ----------


</TABLE>

                                          12
<PAGE>

(1) Investment and other income (loss), net in 1995, included $11.2 million of
gains recognized on sales and dividend income related to Amway Japan Limited
shares ("Amway Shares") and a $2.9 million gain on the sale of beneficial
interest in a litigation trust. Included in 1994 were $2.4 million of realized
losses on sales of Amway Shares and a $20.2 million loss to adjust the carrying
value of Amway Shares to fair value, offset in part by the gain recognized in
connection with the $13 million Brunswick litigation settlement, net of related
legal fees and expenses.

(2) In July 1994, the Company issued $100 million aggregate principal amount of
13 1/2% Senior Subordinated Notes due 2001 (the "Notes") and concurrently
arranged an $85 million bank credit facility (the "Old Credit Facility"). The
net proceeds to the Company from the issuance of the Notes and from borrowings
under the Old Credit Facility (aggregating approximately $147.5 million) were
utilized to extinguish Minstar's then outstanding bank credit facility and the
Minstar Variable Rate Subordinated Debentures due 2000. In connection with such
extinguishment, the Company realized an extraordinary loss on extinguishment of
debt of approximately $6.6 million.

(3) During the year ended December 31, 1996, the Company retroactively changed
its method of recognizing revenue and costs for long-term construction contracts
from the completed contract method to the percentage of completion method.  The
new method of accounting for long-term contracts was adopted to more accurately
reflect periodic recognition of income and costs on certain custom yachts sold
directly to consumers under contract.  Such contracts normally include
significant progress payments and the final completion of the yacht typically is
subject to a variety of customer enhancement requests.  The effect of this
change on net revenues and the net loss as previously reported for 1995 and
prior years is as follows:

<TABLE>
<CAPTION>

                                            1995          1994           1993           1992
                                            ----          ----           ----           ----

    <S>                                  <C>           <C>            <C>            <C>
    Net loss as previously reported      $  (9,059)    $ (21,858)     $ (36,565)     $ (35,858)
    Adjustment for effect of change in
    accounting principle applied
    retroactively                            1,355        (2,722)         1,367             --
                                         ---------     ---------      ---------      ---------

    Net loss as adjusted                 $  (7,704)    $ (24,580)     $ (35,198)     $ (35,858)
                                         ---------     ---------      ---------      ---------
                                         ---------     ---------      ---------      ---------

</TABLE>


                                          13
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND
         LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW -

    The Company, through its subsidiaries, operates within a single industry
segment, the manufacture and marketing of motorized pleasure boats.

RESULTS OF OPERATIONS OF THE COMPANY

    The following table illustrates the impact of certain income and expense
items on net revenues by presenting such items as a percentage of net revenue
for the six months ended June 30, 1997 and years ended December 31, 1996, 1995
and 1994:

<TABLE>
<CAPTION>

                                            For the
                                          Six Months
                                             Ended
                                            June 30,         For the Years Ended December 31,
                                                          ---------------------------------------
                                             1997           1996           1995           1994
                                           ----------     ---------      ---------      ---------
<S>                                        <C>            <C>            <C>            <C>
Net revenues                               100.0%         100.0%         100.0%         100.0%

Cost of products and services               87.2%          85.8%          87.4%          85.3%
                                           ------------------------------------------------------

Gross profit                                12.8%          14.2%          12.6%          14.7%

Selling and administrative
  expenses                                  12.2%          10.4%          12.1%          11.8%
                                           ------------------------------------------------------

Operating profit                              .6%           3.8%            .5%           2.9%

Interest expense                            (4.2%)         (3.6%)         (4.3%)         (4.5%)

Investment and other income (loss),
  net                                        (.1%)           .0%           2.8%          (1.8%)
                                           ------------------------------------------------------

(Loss) income before income
   taxes and extraordinary item             (3.7%)           .2%          (1.0%)         (3.4%)

Provision for income taxes                   (.1%)          (.2%)          (.4%)          (.2%)
                                           ------------------------------------------------------

Net (loss) income before
   extraordinary item                       (3.8%)           .0%          (1.4%)         (3.6%)

Extraordinary item                            .0%            .0%            .0%          (1.3%)
                                           ------------------------------------------------------

Net (loss) income                           (3.8%)           .0%          (1.4%)         (4.9%)
                                           ------------------------------------------------------
                                           ------------------------------------------------------
</TABLE>

SIX MONTHS ENDED JUNE 30, 1997 (STUB FISCAL YEAR) COMPARED TO SIX MONTHS ENDED
JUNE 30, 1996

    Consolidated net revenues for the six months ended June 30, 1997 were
$260.8 million, a decrease of 14.2% from the Company's net revenues for the six
months ended June 30, 1996. This decline in net revenues reflected decreases in
each product segment, particularly the recreational power and motor yacht
segments. Overall unit shipments for the period decreased approximately 11% from
comparable prior year period levels, primarily due to unit decreases both in the
recreational power and the fishboat segments. According to available
information, retail unit deliveries of the Company's products were down
approximately 4% from comparable prior year period levels, with this decrease
largely attributable to a decrease in the fishboat segment. Management believes
that the above


                                          14
<PAGE>

combination of factors are representative of a correction of dealer inventory
levels following particularly heavy shipments of product during the fourth
quarter of fiscal 1996. Domestic sales for the six months ended June 30, 1997
decreased approximately 14% as compared to the same period in 1996, while
foreign sales decreased approximately 10%. The Company's backlog of orders at
June 30, 1997 was down approximately 20% from backlog at June 30, 1996, with
most of the decrease attributable to a decrease in the backlog of orders for the
Company's custom motor yacht products.

    Gross profit for the six months ended June 30, 1997 was $33.4 million
(12.8% of net revenues) as compared to $41.1 million (13.5% of net revenues) for
the six months ended June 30, 1996. The Company benefited during the six months
ended June 30, 1997 from improved margins achieved on sales in the recreational
power product group, and a trend in the Company's overall sales mix toward
fishboat product group sales, which generally produce higher gross margins than
sales of the Company's other product offerings. The impact of these factors were
offset, however, by decreased sales and production levels at certain operating
units resulting in decreased coverage of fixed manufacturing costs. In addition,
during 1997, the Company discontinued its Cajun product line and provided for
certain costs associated with the close down of the Cajun manufacturing
facility. Certain of these costs were reflected as a component of cost of
products and services during 1997.

    Selling and administrative expenses for the six months ended June 30, 1997
totaled $31.9 million (12.2% of net revenues) as compared to $29.9 million (9.8%
of net revenues) for the six months ended June 30, 1996. The increased spending
was primarily attributable to an acceleration in the timing and recognition of
certain administrative expenses and additional costs associated with the product
line discontinuation mentioned above.

    The Company's operating profit for the six months ended June 30, 1997 was
$1.5 million (0.6% of net revenues) as compared to operating profit of $11.2
million (3.7% of net revenues) for the six months ended June 30, 1996. The
decrease in operating profit was the result of the factors discussed above.

    Interest expense for the six months ended June 30, 1997 totaled $11.0
million as compared to $11.3 million for the six months ended June 30, 1996. The
reduction in interest expense was principally the result of a reduction in
borrowings outstanding under the Company's senior bank credit facility.

    Investment and other income for the six months ended June 30, 1997 totaled
a net loss of $0.2 million as compared to income of $0.2 million for the six
months ended June 30, 1996. Investment and other income for 1997 included a
charge related to the write-down to anticipated net realizable value of the
Cajun manufacturing and office facilities, a gain related to certain insurance
recoveries and interest earned on short-term investments, notes and other
receivables. Investment and other income for the six months ended June 30, 1996
consisted principally of interest earned on short-term investments, notes and
other receivables.

    The provision for income taxes for the six months ended June 30, 1997
consisted primarily of state income taxes.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

    Consolidated net revenues for the year ended December 31, 1996 were $618.1
million, an increase of 12.7% from the Company's net revenues for the year ended
December 31, 1995.  This increase in net revenues reflected growth in each
product segment, particularly the recreational power and motor yacht segments.
Overall unit shipments increased approximately 3% in 1996 over 1995 levels.
Domestic sales in 1996 increased approximately 12% as compared to 1995, while
foreign sales increased approximately 21%.  The Company's backlog of orders at
December 31, 1996 was down approximately 5% from backlog at December 31, 1995,
primarily due to a reduction in backlog for large custom yachts.


                                          15
<PAGE>

    Gross profit for 1996 was $87.9 million (14.2% of net revenues) as compared
to $68.9 million (12.6% of net revenues) for 1995.  This increase in gross
profit was attributable to margin improvements achieved across all product
segments, particularly the recreational power and motor yacht segments.  These
margin improvements resulted primarily from increased volume, improved
manufacturing efficiencies and reductions in overhead spending and other
manufacturing costs as a percentage of net revenues.  During 1995, the Company
provided for additional reserves of $2.2 million for remediation activities
related to certain EPA matters.  This charge was reflected as a component of
cost of products and services during 1995.

    Selling and administrative expenses for 1996 totaled $64.7 million (10.4%
of net revenues) as compared to $66.2 million (12.1% of net revenues) for 1995.
The decrease in selling and administrative expenses resulted primarily from
expense reduction initiatives implemented throughout the Company in these areas
during 1996.  Spending in the coordination of corporate-wide marketing programs,
including the Company's SAM's Club Boat Buying Program, decreased substantially
during 1996, as 1995 results reflected various start-up costs related to these
programs.  Selling and administrative expenses for 1995 also reflected the
favorable impact of a $2.2 million excess restructuring reserve reversal, offset
by a $1.2 million provision for the shutdown and sale of the Company's retail
boat dealership and marina operation.

    The Company's operating profit for 1996 was $23.2 million (3.8% of net
revenues) as compared to operating profit of $2.8 million (.5% of net revenues)
for 1995.  The improvement in operating profit was the result of the factors
discussed above.

    Interest expense for 1996 totaled $22.2 million as compared to $23.9
million for 1995.  The reduction in interest expense was principally the result
of a reduction in borrowings outstanding under the Company's Credit Facility.

    Investment and other income for 1996 totaled $.1 million as compared to
$15.5 million for 1995.  Investment and other income for 1996 consisted
principally of interest earned on short-term investments, notes and other
receivables.  Investment and other income for 1995 consisted principally of
gains on sales of and dividend income related to the Company's investment in
Amway Shares ($11.2 million), a gain on the sale of beneficial interest in a
litigation trust ($2.9 million), and interest earned on short-term investments,
notes and other receivables.

    The provision for income taxes for 1996 consisted primarily of state and
foreign income taxes.


YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

    Consolidated net revenues for the year ended December 31, 1995 were $548.6
million, an increase of 9.8% from the Company's net revenues for the year ended
December 31, 1994. This increase in net revenues reflected the continuing
improvement in the domestic market, as domestic sales in 1995 increased
approximately 14% as compared to 1994. Foreign sales in 1995 decreased
approximately 13% as compared to 1994. This decrease was attributable to the
continued weakness in the international marketplace, particularly in the
European and Japanese markets.  Acceptance of new model offerings and redesigns
of existing models have resulted in an improvement in the Company's backlog of
orders, especially relating to its mid-size cruisers, runabouts and smaller
fishing boats.

    Gross profit for 1995 was $68.9 million (12.6% of net revenues) as compared
to $73.4 million (14.7% of net revenues) for 1994. This decrease in gross profit
was attributable to a less favorable product mix, increased materials costs
resulting from increases in the costs of certain commodity raw materials and
increased costs associated with accelerated levels of new model design and
tooling. During 1995, the Company provided for additional reserves of $2.2
million for remediation activities related to


                                          16
<PAGE>

certain EPA matters. This charge was reflected as a component of cost of
products and services during 1995.

    Selling and administrative expenses for 1995 totaled $66.2 million (12.1%
of net revenues) as compared to $58.8 million (11.8% of net revenues) for 1994.
The increase in selling and administrative expenses was primarily due to
increased sales levels and to selling and marketing expenses associated with the
start up and administration of the Company's SAM's Club Boat Buying Program.
Selling and administrative expenses for 1995 also included a provision of $1.2
million for the shutdown and sale of the Company's retail boat dealership and
marina operation.  During 1995, the Company determined that certain remaining
reserves related to the charge for restructuring of operations recorded in 1993
were in excess of reserves required.  Accordingly, these excess reserves of $2.2
million were reversed and were reflected as an offset to selling and
administrative expenses during 1995.

    The Company's operating profit for 1995 was $2.8 million (.5% of net
revenues) as compared to operating profit of $14.6 million (2.9% of net
revenues) for 1994. The decline in operating profit was the result of the
factors discussed above.

    Interest expense for 1995 totaled $23.9 million as compared to $22.7
million for 1994. The reduction in borrowings outstanding under the Company's
Credit Facility, and the resulting reduction in related interest expense, was
offset by an overall higher average interest rate on outstanding borrowings.

    Investment and other income for 1995 totaled $15.5 million as compared to a
loss of $8.8 million for 1994. Investment and other income for 1995 consisted
principally of gains on sales of and dividend income related to the Company's
investment in Amway Shares ($11.2 million), a gain on the sale of beneficial
interest in a litigation trust ($2.9 million), and interest earned on short-term
investments, notes and other receivables. Investment and other income for 1994,
aggregating a net loss of $8.8 million, consisted principally of noncash losses
of approximately $2.4 million realized in connection with sales of certain of
the Company's Amway Shares and a charge of approximately $20.2 million to write
down the Company's investment in Amway Shares to fair value at December 31,
1994. Such amounts for 1994 were offset by the $13 million settlement of the
Brunswick litigation net of related legal fees and expenses, dividend income
earned on Amway Shares and interest earned on short-term investments, notes and
other receivables.

    The provision for income taxes for 1995 consisted primarily of alternative
minimum taxes associated with the sales of Amway Shares and state and foreign
income taxes.

LIQUIDITY AND CAPITAL RESOURCES

    Cash used by operating activities for the six months ended June 30, 1997
totaled $22.9 million as compared to cash provided by operations totaling $1.8
million for the six months ended June 30, 1996. The net cash use for the 1997
period consisted of a $3.9 million use generated by the Company's operating
results, net of non-cash charges and other items, and a $19.0 million net cash
use resulting from changes in working capital items. Working capital at June 30,
1997 totaled $47.8 million, including cash and cash equivalents of $4.4 million,
as compared working capital of $48.4 million at December 31, 1996, including
cash and cash equivalents of $23.1 million.

    Capital expenditures of the Company for the six months ended June 30, 1997
totaled $5.1 million, as compared to $1.4 million for the six months ended June
30, 1996. Proceeds from sales of property and equipment for the six months ended
June 30, 1997 totaled $0.3 million, and included proceeds from the sale of an
idle manufacturing facility located in North Carolina. Terms of this sale
agreement call for proceeds aggregating $5.5 million to be received over a three
year period. No material gain or loss was recognized in connection with this
sale. Proceeds from sales of property and equipment for the six months ended
June 30, 1996 totaled $4.2 million, and included proceeds of $3.8 million


                                          17
<PAGE>

related to the sale of certain land, buildings and equipment formerly used by
the Company in the operation of a retail marine dealership and marina facility.
No material gain or loss was recognized in connection with this sale. The
Company anticipates that capital expenditures over the next several years will
be in the range of $8.0 to $10.0  million per year, including approximately $2.0
million per year related to certain large tooling projects. The remaining
expenditures will principally be for the purchase of manufacturing and
transportation equipment, and are expected to be funded through operations and
available bank borrowings.

    The Company, through its subsidiaries, generally follows a strategy of
voluntarily complying with existing and/or new regulations and requirements
regarding environmental matters prior to mandated dates of compliance. The
Company is currently conducting site remediation, underground tank removal and
replacement, and site investigations, where necessary. The Company has provided
reserves, where appropriate, to cover estimated costs related to such regulatory
compliance.

    The Company also incurs expense from time to time for environmental claims
relating to its current and divested operations. During the six months ended
June 30, 1997 and during fiscal 1996, the Company made cash payments relating to
environmental matters (including environmental related costs incurred with
respect to divested operations) of approximately $.5 million and $2.7 million,
respectively. The Company anticipates total environmental-related costs
associated with its divested operations to range from approximately $5.0 million
to $6.0 million (which include CERCLA-type liabilities), which costs are likely
to be incurred over a period of up to 10 years. With respect to these potential
liabilities, the Company has been identified as a potentially responsible party
at approximately 10 active sites. Based on available information, the Company
believes adequate reserves have been provided to cover such potential costs as
of June 30, 1997.

    The Company and its subsidiaries are parties to certain dealer inventory
floor plan financing arrangements with various financial institutions pursuant
to which each may be required, in the event of default by a financed dealer, to
repurchase products previously sold to such dealer. Under certain of these
arrangements, the Company also has recourse liability in the event of dealer
default. The Company repurchased $1.4 million of such dealer inventory in the
six months ended June 30, 1997 and $3.2 million, $1.9 million and $.8 million of
such dealer inventory in 1996, 1995 and 1994, respectively. The Company incurred
$.6 million in recourse losses under these arrangements during the six months
ended June 30, 1997 and $.4 million in 1996. As of June 30, 1997, the Company
and certain subsidiaries were contingently liable under these agreements for
repurchase and recourse in the amounts of $41.7 million and $12.3 million,
respectively.

    The Company generally has not provided reserves, other than immaterial
reserves at certain subsidiaries, for losses and costs which may result should
the Company be required to repurchase product from a defaulting dealer. Although
the ultimate loss which might be incurred as a result of such contractual
obligation is uncertain, the Company believes that any such losses that may be
incurred would not have a material effect on its consolidated operating results
or financial position.

    At June 30, 1997, the Old Credit Facility, as amended and restated,
consisted of a $29.2 million revolving credit facility and a $30.8 million
letter of credit facility. Weighted average borrowings outstanding under the
revolving credit facility during 1997 were $8.2 million. Aggregate borrowings
and outstanding letters of credit under the Old Credit Facility were limited to
eligible receivables and eligible inventories, as defined. At June 30, 1997, the
Company had $19.2 million of availability under the revolving credit facility,
and outstanding letters of credit aggregating $22.2 million. Approximately $15.7
million of such letters of credit collateralized insurance programs; the
remainder principally related to dealer floor plan financing arrangements with
certain financial institutions and to liabilities retained by the Company in
connection with divested operations.


                                          18
<PAGE>

    Effective July 1, 1997, the Company arranged a $73 million senior bank
credit facility (the "Credit Facility"), expiring in June, 2000, consisting of a
$35.0 million revolving credit facility, a $15.0 million term loan facility and
a $23.0 million letter of credit facility. Aggregate borrowings and outstanding
letters of credit under the Credit Facility are limited to eligible receivables
and eligible inventories, as defined. Borrowings under the revolving credit
facility are intended for general corporate and working capital purposes and,
subject to the achievement of certain target financial performance measures, for
the purchase of up to $10 million aggregate principal amount of the Notes.
Borrowings under the term loan facility are designated solely for the purchase
of up to $15 million aggregate principal amount of the Notes. The Credit
Facility replaces the Old Credit Facility, which was to expire in July, 1997.

    The Credit Facility and the indenture governing the Company's notes
("Indenture"), contain restrictive covenants which, among other things, limit
the ability of the Company to incur other indebtedness, engage in transactions
with affiliates, incur liens, make certain restricted payments, and enter into
certain business combination and asset sale transactions. The Credit Facility
also requires the Company to satisfy certain financial tests and ratios and
restricts capital expenditures. In addition, the Credit Facility contains
provisions which may require accelerated repayment of the Credit Facility and/or
limit the Company's access to the facility upon the incurrence of specific
obligations or significant changes in the financial condition, business,
properties, prospects or operations of the Company. As of June 30, 1997, the
Company was in compliance with all covenants under the Credit Facility and the
Indenture.

    On January 21, 1997, the Company entered into an option agreement (the
"Option"), with a shareholder, pursuant to which the Company was granted an
option to purchase up to $25 million aggregate principal amount of the Notes at
par.  The Option is exercisable at any time or from time to time, in whole or in
part, through January 19, 1998.  The Company paid $.8 million for the Option.

    Subsequent to June 30, 1997, the Company entered into an agreement (the 
"Tender Agreement"), with an unrelated third party, pursuant to which the 
third party has agreed to tender certain of the Notes held by such party, 
with an aggregate face value of $32.0 million, for purchase by the Company at 
a price equal to 99.0% of par. In consideration of entering into the 
agreement, the Company paid such third party a fee of $960,000 (3% of par).  
As a condition to the Tender Agreement the holder has also agreed to provide 
their consent with respect to certain proposed amendments to the Indenture. 
The Tender Agreement, as extended, expires October 15, 1997.

    On July 10, 1997, the Company commenced an offer to purchase and a consent
solicitation (the "Tender Offer and Consent"), for to up to $75 million
aggregate principal amount of the Notes, including those subject to the Tender
Agreement but excluding those subject to the Option. Terms of the Tender Offer
and Consent provide for the purchase of all validly tendered Notes, as defined
and subject to certain conditions, at a price equal to 99.0% of par. In
addition, holders submitting valid tenders of Notes will have, as a condition to
tendering, provided their consent with respect to certain proposed changes to
the Indenture, for which consent the holder will receive a fee equal to 3.0% of
par (the "Consent Fee"), of the Notes tendered by such holder.  The Company has
commenced this offering with the intent of reducing the Company's interest
expense burden and increasing the Company's financial flexibility. The Company
has been engaged in negotiations with various financial institutions and other
parties with regard to securing new financing to fund the purchase of the Notes
under the Option and the Tender Offer and Consent. Negotiations with certain of
these parties recently were terminated, and the Company is currently pursuing
alternate means to finance the repurchase of the Notes. There can be no
assurance, however, that the Company will be able to obtain, on terms acceptable
to the Company, the financing necessary to consummate the Tender Offer and
Consent.


                                          19
<PAGE>

    The Company continues the process of evaluating and pursuing, as
appropriate, the sale of various non-operating assets and certain land and
facilities in order to further improve its working capital. In this regard,
effective May 15, 1997, the Company completed the sale of an idle manufacturing
facility located in North Carolina.  Terms of the agreement call for proceeds
aggregating $5.5 million to be received over a three year period. The Company
continues to evaluate from a strategic viewpoint other alternatives relative to
strengthening the Company's financial position including the potential further
sales of non-operating assets and possible joint venture considerations.

    The Company requires substantial cash flow to meet its interest obligations
under the Notes and fund the seasonal working capital requirements necessary for
its operations. The Company's operating performance continues to be critical in
meeting such cash flow requirements. As of June 30, 1997, the Company's working
capital was $47.8 million, including cash and cash equivalents of $4.4 million.
The Company believes that available working capital, borrowing capacity under
the Credit Facility and cash flow generated from operations will provide
sufficient liquidity to fund its cash operating expenses, capital expenditures
and meet its interest and principal obligations until the Credit Facility and
Notes become due.

    The Company continuously evaluates its existing operations and investigates
possible acquisitions to expand its business in order to maximize profits and
increase its share of the motorized pleasure boat market. Accordingly, while the
Company does not have any material arrangement, commitment or understanding with
respect thereto, further acquisitions, investments and changes in operations are
possible.

EFFECTS OF INFLATION ON THE COMPANY

    Inflation generally affects the Company by increasing the interest expense
related to floating rate indebtedness and by increasing the cost of labor and
material. In recent years, the Company has experienced pricing volatility from
inflation and other factors on certain raw materials the Company utilizes,
particularly plywood, plastic resins, fiberglass and aluminum ("Commodities").
The price of these Commodities is generally based on global supply and demand
conditions and the volume of purchases. The Company has utilized various
management techniques to limit the impact of material and labor cost increases
to date, however, changing economic conditions may cause demand to further
increase and there can be no assurances that the Company will be able to
continue to limit the impact of raw material price pressures on its future
operating results.

EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENT

    The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("SFAS No. 121"), effective January 1, 1996.  SFAS No. 121 had
no significant impact on the Company's financial position or results of
operations.

    The Financial Accounting Standards Board issued Statements of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income" (SFAS No. 130) and
No. 131, "Disclosures about Segments of An Enterprise and Related Information"
(SFAS No. 131). Both SFAS No. 130 and SFAS No. 131 are effective for financial
statements for fiscal years beginning after December 15, 1997. The Company
anticipates implementing the reporting provisions required under SFAS No. 130
and SFAS No. 131 for the fiscal year ending June 30, 1999.


                                          20
<PAGE>

                 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
            AND SUPPLEMENTAL SCHEDULE TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                           Page
                                                                           ----
    CONSOLIDATED FINANCIAL STATEMENTS

    Report of Independent Public Accountants                                22
    Consolidated Balance Sheets as of June 30, 1997 and
      December 31, 1996 and 1995                                            23
    Consolidated Statements of Operations for the six
      months ended June 30, 1997 and the years ended
      December 31, 1996, 1995 and 1994                                      24
    Consolidated Statements of Stockholders' Equity for
      the six months ended June 30, 1997 and the years ended
      December 31, 1996, 1995 and 1994                                      25
    Consolidated Statements of Cash Flows for the six months
      ended June 30, 1997 and the years ended December 31,
      1996, 1995 and 1994                                                   26
    Notes to Consolidated Financial Statements                              28



    SUPPLEMENTAL SCHEDULE TO CONSOLIDATED FINANCIAL STATEMENTS

    Schedule II       Valuation and Qualifying Accounts                     41

      All other schedules are omitted as the required information is
      inapplicable or the information is presented in the consolidated
      financial statements or related notes.

                                          21
<PAGE>

                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To Genmar Holdings, Inc.:

    We have audited the accompanying consolidated balance sheets of Genmar
Holdings, Inc. (a Delaware corporation) and Subsidiaries as of June 30, 1997,
December 31, 1996 and 1995, and the related consolidated statements of
operations, stockholders' equity and cash flows for the six months ended June
30, 1997 and years ended December 31, 1996, 1995 and 1994. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Genmar
Holdings, Inc. and Subsidiaries as of June 30, 1997 and December 31, 1996 and
1995, and the results of their operations and their cash flows for the six
months ended June 30, 1997 and years ended December 31, 1996, 1995 and 1994, in
conformity with generally accepted accounting principles.

    Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in the
index to consolidated financial statements is presented for purposes of
complying with the Securities and Exchange Commissions rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.



                                                      ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,
August 29, 1997


                                          22
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                    (IN THOUSANDS)
<TABLE>
<CAPTION>
                                        ASSETS
<S>                                                                                  <C>            <C>            <C>
                                                                                     JUNE 30,       DECEMBER 31,   DECEMBER 31,
                                                                                        1997           1996           1995
                                                                                    ----------     -------------  -------------
Current Assets:
  Cash and cash equivalents                                                         $    4,433     $   23,137     $   18,091
  Accounts receivable, net of allowances of $4,249,                                     37,337         36,648         44,877
    $4,108  and  $3,488
  Inventories                                                                          103,610         97,314        119,335
  Prepaid expenses                                                                       2,735          3,152          4,958
                                                                                    ----------     -------------  -------------
    Total current assets                                                               148,115        160,251        187,261
                                                                                    ----------     -------------  -------------
Property and Equipment, at cost:
  Land                                                                                   8,896          9,529         11,190
  Buildings                                                                             64,213         66,881         71,745
  Operating equipment                                                                   52,465         48,878         45,832
  Accumulated depreciation                                                             (70,510)       (66,470)       (65,434)
                                                                                    ----------     -------------  -------------
    Net property and equipment                                                          55,064         58,818         63,333
Other Assets                                                                             9,250          5,296          7,415
Goodwill                                                                                45,850         46,838         48,669
                                                                                    ----------     -------------  -------------
                                                                                    $  258,279     $  271,203     $  306,678
                                                                                    ----------     -------------  -------------
                                                                                    ----------     -------------  -------------

                                               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Accounts payable                                                                  $   42,084     $   41,766      $  45,882
  Accrued liabilities                                                                   55,065         61,649         60,478
  Customer deposits                                                                      2,801          7,565          3,953
  Accrued income taxes                                                                     247            544            788
  Current maturities of long-term debt                                                     154            309            893
                                                                                    ----------     -------------  -------------
    Total current liabilities                                                          100,351        111,833        111,994

Long-term Debt                                                                         135,238        124,552        151,445
Other Noncurrent Liabilities                                                            25,823         27,949         36,621
                                                                                    ----------     -------------  -------------

Commitments and Contingencies (Note 7)

Stockholders' Equity (Deficit):
  Common stock, $.01 par, 2,000 shares authorized;
    1,779 issued and outstanding                                                            18             18             18
  Paid-in capital                                                                      116,233        116,233        116,233
  Accumulated deficit                                                                 (119,059)      (109,111)      (109,386)
  Cumulative translation adjustment                                                       (325)          (271)          (247)
                                                                                    ----------     -------------  -------------

    Total stockholders' (deficit) equity                                                (3,133)         6,869          6,618
                                                                                    ----------     -------------  -------------
                                                                                    $  258,279     $  271,203     $  306,678
                                                                                    ----------     -------------  -------------
                                                                                    ----------     -------------  -------------

</TABLE>


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


                                          23
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       FOR THE SIX
                                                                       MONTHS ENDED
                                                                       JUNE 30,          FOR THE YEARS ENDED DECEMBER 31,
                                                                                     ---------------------------------------
                                                                         1997           1996           1995           1994
                                                                      ---------      ---------      ---------      ---------

<S>                                                                    <C>            <C>            <C>            <C>
Net revenues                                                          $ 260,848      $ 618,056      $ 548,559      $ 499,435

Cost of products and services                                           227,460        530,200        479,617        426,014
                                                                      ---------      ---------      ---------      ---------

    Gross profit                                                         33,388         87,856         68,942         73,421

Selling and administrative expenses                                      31,888         64,653         66,171         58,829
                                                                      ---------      ---------      ---------      ---------

    Operating profit                                                      1,500         23,203          2,771         14,592

Interest expense                                                        (11,026)       (22,190)       (23,862)       (22,674)

Investment and other (loss) income, net                                    (176)           122         15,477         (8,834)
                                                                      ---------      ---------      ---------      ---------

    (Loss) income before income taxes and
      Extraordinary item                                                 (9,702)         1,135         (5,614)       (16,916)

Provision for income taxes                                                 (246)          (860)        (2,090)        (1,040)
                                                                      ---------      ---------      ---------      ---------

    (Loss) income before extraordinary item                              (9,948)           275         (7,704)       (17,956)

Extraordinary loss on extinguishment of debt                                 --             --             --         (6,624)
                                                                      ---------      ---------      ---------      ---------

    Net (loss) income                                                 $  (9,948)     $     275      $  (7,704)     $ (24,580)
                                                                      ---------      ---------      ---------      ---------
                                                                      ---------      ---------      ---------      ---------
 </TABLE>

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

                                          24
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996;
                          AND SIX MONTHS ENDED JUNE 30, 1997
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
 

                                                              Common Stock                                         Cumulative
                                                      -------------------------       Paid-In      Accumulated     Translation
                                                        Shares         Amount         Capital        Deficit       Adjustment
                                                      ----------     ----------     ----------    ------------     -----------

<S>                                                   <C>            <C>            <C>           <C>              <C>
Balance, December 31, 1993                                 1,228       $  12        $  12,186     $  (78,469)      $     (174)

Cumulative effect on prior years of
 change in accounting (Note 2)                                --          --               --          1,367               --

 Net loss                                                     --          --               --        (24,580)              --
 Issuance of common stock in
  exchange for cash, marketable
  securities and note payable, net
  of debt assumed                                            551           6          105,249             --               --
 Restructuring fees and expenses                              --          --             (914)            --               --
 Purchase of minority interests in
  Miramar                                                     --          --             (288)            --               --
 Translation adjustment                                       --          --               --             --             (163)
                                                      ----------     ----------     ----------    ------------     -----------

Balance, December 31, 1994                                 1,779          18          116,233       (101,682)            (337)

 Net loss                                                     --          --               --         (7,704)              --
 Translation adjustment                                       --          --               --             --               90
                                                      ----------     ----------     ----------    ------------     -----------

Balance, December 31, 1995                                 1,779          18          116,233       (109,386)            (247)
                                                      ----------     ----------     ----------    ------------     -----------

 Net income                                                   --          --               --            275               --
 Translation adjustment                                       --          --               --             --              (24)
                                                      ----------     ----------     ----------    ------------     -----------

Balance, December 31, 1996                                 1,779          18          116,233       (109,111)            (271)
                                                      ----------     ----------     ----------    ------------     -----------

 Net loss                                                     --          --               --         (9,948)              --
 Translation adjustment                                       --          --               --             --              (54)
                                                      ----------     ----------     ----------    ------------     -----------

Balance, June 30, 1997                                     1,779       $  18        $ 116,233     $ (119,059)      $     (325)
                                                      ----------     ----------     ----------    ------------     -----------
                                                      ----------     ----------     ----------    ------------     ----------- 
</TABLE>


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

                                          25
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)
<TABLE>
<CAPTION>
 

                                                                    FOR THE SIX
                                                                   MONTHS ENDED              FOR THE YEARS ENDED DECEMBER 31
                                                                       JUNE 30,       --------------------------------------
                                                                           1997           1996           1995           1994
                                                                       --------       --------       --------       --------
<S>                                                                     <C>            <C>            <C>            <C>
OPERATING ACTIVITIES:
 Net (loss) income                                                     $ (9,948)      $    275       $ (7,704)      $(24,580)
 Adjustments to reconcile net (loss) income to net
 cash (used in) provided by operating activities:
  Depreciation and amortization                                           6,211         11,618         11,213          9,281
  Write-down of property and trademark                                    1,124             --             --             --
  Extraordinary loss on extinguishment of debt                               --             --             --          6,624
  Net (gain) loss on sale of marketable securities
    and write-down in carrying value                                         --             --         (9,452)        21,915
  Litigation settlement                                                      --             --             --        (13,000)
  Net changes in operating assets and
    liabilities, per accompanying schedule                              (19,025)        27,707         13,662        (30,391)
  Other                                                                      88            398             31            185
Payment of noncurrent liabilities                                        (1,326)        (3,900)        (5,822)        (5,039)
                                                                       --------       --------       --------       --------
  Net cash (used in) provided by operating
    activities                                                          (22,876)        36,098          1,928        (35,005)
                                                                       --------       --------       --------       --------
INVESTING ACTIVITIES:
 Property and equipment additions                                        (5,088)        (5,511)       (12,987)        (3,879)
 Proceeds from the sale of property                                         306          3,966             --             --
 Proceeds from sale of marketable securities                                 --             --         58,770         13,610
 Sales of debentures                                                         --             --             --          2,367
 Sales of restricted cash and investments                                    --             --             --         14,500
  Net cash (used in) provided by investing
                                                                       --------       --------       --------       --------
    activities                                                           (4,782)        (1,545)        45,783         26,598
                                                                       --------       --------       --------       --------
FINANCING ACTIVITIES:
 Proceeds from revolving credit facility                                 50,000         59,000         25,000         66,000
 Repayment of revolving credit facility                                 (40,000)       (87,231        (56,285)        (6,484)
 Proceeds from the notes                                                     --             --             --        100,000
 Repayments of other long-term debt, net                                   (221)          (916)        (2,988)      (108,577)
 Repayment of debentures                                                     --             --             --        (49,064)
 Purchase of bond option                                                   (825)            --             --             --
 Issuance of common stock                                                    --             --             --          5,000
 Deferred financing costs                                                    --           (360)          (450)        (7,474)
 Other                                                                       --             --            404         (1,061)
                                                                       --------       --------       --------       --------
    Net cash provided by (used in) financing
    activities                                                            8,954        (29,507)       (34,319)        (1,660)
                                                                       --------       --------       --------       --------

 (DECREASE) INCREASE IN CASH AND CASH
  EQUIVALENTS                                                           (18,704)         5,046         13,392        (10,067)
CASH AND CASH EQUIVALENTS:
 Balance, beginning of year                                              23,137         18,091          4,699         14,766
                                                                       --------       --------       --------       --------
 Balance, end of year                                                  $  4,433       $ 23,137       $ 18,091       $  4,699
                                                                       --------       --------       --------       --------
                                                                       --------       --------       --------       --------
 
</TABLE>


                                          26
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)
                                     (CONTINUED)


<TABLE>
<CAPTION>
 
                                                                    FOR THE SIX
                                                                   MONTHS ENDED           FOR THE YEARS ENDED DECEMBER 31
                                                                       JUNE 30,       --------------------------------------
                                                                           1997           1996           1995           1994
                                                                      ---------      ---------      ---------      ---------

<S>                                                                    <C>            <C>            <C>            <C>
Changes in operating assets and liabilities consist of:
 Accounts receivable                                                  $    (689)     $   5,742      $  17,481      $ (23,036)
 Inventories                                                             (6,296)        20,895        (24,386)       (22,529)
 Prepaid expenses and other                                                 417          1,806         15,740           (147)
 Accounts payable, accrued liabilities and accrued
    income taxes                                                         (7,693)        (4,348)         6,917         17,288
 Customer deposits                                                       (4,764)         3,612         (2,090)        (1,967)
                                                                      ---------      ---------      ---------      ---------

      Net changes                                                     $ (19,025)     $  27,707      $  13,662      $ (30,391)
                                                                      ---------      ---------      ---------      ---------
                                                                      ---------      ---------      ---------      ---------

Supplemental cash flow information:
 Interest paid during the year                                        $   8,315      $  18,608      $  20,666      $  18,785
 Income taxes paid during the year                                          587          1,108          1,494            493
                                                                      ---------      ---------      ---------      ---------
                                                                      ---------      ---------      ---------      ---------

Schedule of noncash financing and investing activities:
 Common stock issued in the restructuring in
    exchange for marketable securities and notes
    payable, net of debt assumed                                             --      $      --      $      --      $ 100,254
 Property and equipment additions from capital leases                        --            362             --            301
 Sale of property in exchange for notes receivable                        4,594             --             --          1,800
                                                                      ---------      ---------      ---------      ---------
                                                                      ---------      ---------      ---------      ---------
 
</TABLE>


                                          27
<PAGE>


                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  BACKGROUND

    Genmar Holdings, Inc. (the "Company") was organized in March 1994 to
combine the operations of IJ Holdings Corp. ("IJ Holdings") including its
wholly-owned subsidiary, Minstar, Inc. ("Minstar"), and Miramar Marine
Corporation ("Miramar"), each of which had been under the control of investor
groups led by Irwin L. Jacobs, as part of a strategic and comprehensive
financial restructuring (the "Restructuring") aimed at combining their resources
under a single centralized and integrated corporate structure. The merger and
capital restructuring, involving IJ Holdings, Minstar and Miramar, have
essentially been accounted for as a pooling of interests and, accordingly, the
accompanying consolidated financial statements and notes thereto include the
results and balances of IJ Holdings, Minstar and Miramar for all periods
presented.

    The Company operates in the recreational powerboat industry which has been
subject to periodic cyclical industry downturns. The Company's ability to meet
its debt service and other obligations depends on its future performance, which,
in turn, is subject to general economic conditions, financial performance and
business factors, including factors beyond the Company's control.  If the
Company is unable to generate sufficient cash flows from operations or otherwise
to comply with the terms of its bank credit facility ("Credit Facility") or the
indenture governing the Company's notes ("Indenture"), it may be required to
refinance all or a portion of its existing debt or obtain additional financing,
although there can be no assurance that the Company will be able to obtain such
refinancing or additional financing.


2.  SIGNIFICANT ACCOUNTING POLICIES

    PRINCIPLES OF CONSOLIDATION:

    The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned. Significant intercompany
accounts and transactions have been eliminated.

    FISCAL YEAR:

    Effective June 2, 1997, the Company changed its fiscal year end from
December 31 to June 30. Accordingly, all general references to years relate to
fiscal years unless otherwise noted.

    CHANGE IN ACCOUNTING POLICY:

    During the year ended December 31, 1996, the Company retroactively changed
its method of recognizing revenue and costs for long-term construction contracts
from the completed contract method to the percentage of completion method. The
new method of accounting for long-term contracts was adopted to more accurately
reflect periodic recognition of income and costs on certain custom yachts sold
directly to consumers under contract. Such contracts normally include
significant progress payments and the final completion of the yacht typically is
subject to a variety of customer enhancement requests.  As a result of the
change, net income for the year ended December 31, 1996, was approximately
$1.1 million higher than it would have been had the change not been made. The
financial statements for the years ended December 31, 1995 and 1994, have been
retroactively restated for this change, which decreased the previously reported
net loss by $1.4 million in 1995, increased the previously reported net loss by
$2.7 million in 1994 and reduced the 1994 beginning balance of accumulated
deficit by $1.4 million.


                                          28
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    REVENUE RECOGNITION:

    Revenue for products and services, reported net of dealer and other
discounts, is generally recognized at the time of shipment or when services have
been performed. Revenue on certain custom yachts sold directly to consumers
under contract is recognized using the percentage-of-completion method, using
costs incurred to date in relation to estimated total costs of the contracts to
measure the stage of completion. The cumulative effects of revisions of
estimated total contract costs and revenues are recorded in the period in which
the facts requiring the revision become known. When a loss is anticipated on a
contract, the full amount thereof is provided currently. Change orders are
reflected at estimated recoverable amounts. Trade receivables at June 30, 1997
and December 31, 1996 and 1995 include revenue recognized in excess of customer
progress payments received on long-term contracts of $1.9 million, $2.1 million
and $2.5 million, respectively.

    Through its dealers, the Company warrants its products under normal use and
maintains warranty reserves pursuant to this policy. Components, including
engines, drive units and appliances, are generally warranted by their suppliers
and not the Company.

    USE OF ESTIMATES:

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Estimates are used for such items as depreciable lives,
uncollectible accounts, environmental and legal loss contingencies,
self-insurance reserves and future warranty costs. As better information becomes
available or actual amounts are determinable, the recorded estimates are
revised. Consequently, operating results can be affected by revisions to prior
accounting estimates.

    EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENT:

    The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("SFAS No. 121"), effective January 1, 1996.  SFAS No. 121 had
no significant impact on the Company's financial position or results of
operations.

    The Financial Accounting Standards Board issued Statements of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income" (SFAS No. 130) and
No. 131, "Disclosures about Segments of An Enterprise and Related Information"
(SFAS No. 131). Both SFAS No. 130 and SFAS No. 131 are effective for financial
statements for fiscal years beginning after December 15, 1997. The Company
anticipates implementing the reporting provisions required under SFAS No. 130
and SFAS No. 131 for the fiscal year ending June 30, 1999.

    CASH AND CASH EQUIVALENTS:

    Cash includes cash equivalents consisting principally of short-term
investments in commercial paper with original maturities of three months or less
and are recorded at cost, which approximates fair value.


                                          29
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    INVENTORIES:

    Inventories are stated at the lower of cost or market and include
materials, labor and overhead costs. The Company uses the first-in, first-out
cost method in determining cost for substantially all its inventories.
Inventories consist of the following (in thousands):

                             JUNE 30,       DECEMBER 31,        DECEMBER 31,
                              1997             1996                1995
                            -----------    -------------        ------------
Raw materials               $  35,806       $   34,589          $   40,006
Work in process                37,863           35,770              39,492
Finished goods                 29,941           26,955              39,837
                            -----------    -------------        ------------
                            $ 103,610       $   97,314          $  119,335
                            -----------    -------------        ------------
                            -----------    -------------        ------------

    PRODUCTION TOOLING:

    The costs associated with the development of molds used in the production
of certain custom yachts are capitalized as operating equipment and amortized
over three years using the straight-line method. The costs associated with mold
maintenance and the development of all other molds and production tooling are
charged  to cost of products and services as incurred.

    PROPERTY AND EQUIPMENT:

    Property and equipment are stated at cost. Depreciation and amortization
for financial reporting purposes are generally provided on the straight-line
method over the estimated useful lives of the respective assets. Major repairs
and improvements are capitalized and depreciated. Maintenance, supplies and
accessories are charged to expense as incurred. The cost and accumulated
depreciation of property and equipment retired or otherwise disposed of are
removed from the related accounts; any residual balances are charged or credited
to earnings.

    GOODWILL:

    Goodwill is being amortized on a straight-line basis over various periods 
not exceeding 40 years. The company periodically evaluates whether events and 
circumstances have occurred that indicate the remaining estimated useful life 
of goodwill may warrant revision or that the remaining balance of goodwill 
may not be recoverable. Factors considered include, among others, 
deterioration of its dealer organization, adverse changes to or lack of 
acceptance of an individual product line, the marketplace's continuing 
adverse perception of a trade name, adverse changes in governmental and tax 
regulations, adverse and permanent changes in the competitive environment 
affecting a product line and continuing poor operating results deemed by 
management to result from other than the cyclical nature of the marine 
industry. When factors indicate that goodwill should be evaluated for 
possible impairment, the company follows the undiscounted operating cash 
flows method, whereby the unamortized goodwill amount will be written down if 
it is significantly greater than the estimated undiscounted operating cash 
flows for the entity or product lines for which the goodwill is applicable. 
Accumulated amortization was $19.3 million, $18.5 million and $16.6 million 
at June 30, 1997 and December 31, 1996 and 1995, respectively.

                                          30
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    ACCRUED LIABILITIES:

    Accrued liabilities consist of the following (in thousands):

                                    JUNE 30,     DECEMBER 31,     DECEMBER 31,
                                      1997           1996             1995
                                    ----------    ------------    ------------
Warranty                           $  13,378      $  13,407       $  9,361
Sales incentives                       7,720         11,105          9,121
Payroll related                        9,342         11,493          8,263
Interest                               7,185          6,330          7,002
Insurance                              7,939          7,501          6,142
Other                                  5,751          8,063         14,589
                                    ----------    ------------    ------------
                                      51,315         57,899         54,478
Accrued liabilities related to
   divested operations                 3,750          3,750          6,000
                                    ----------    ------------    ------------
       Total accrued liabilities   $  55,065      $  61,649      $  60,478
                                    ----------    ------------    ------------
                                    ----------    ------------    ------------

    ENVIRONMENTAL MATTERS:

    Environmental expenditures which relate to the Company's boat manufacturing
operations are charged to expense or capitalized in accordance with generally
accepted accounting principles. Environmental matters that relate to conditions
arising from previously divested businesses were generally recorded as
liabilities prior to or at the time of divestiture and are periodically
reassessed for adequacy based on current information. Liabilities relating to
environmental matters are generally recorded when environmental assessments
and/or remedial efforts are probable and the related costs can be reasonably
estimated. Generally, the timing of these accruals coincides with the completion
of a feasibility study or the Company's commitment to a formal plan of action.


3.  INVESTMENT IN MARKETABLE SECURITIES

    During 1995, certain contractual restrictions were waived, and the Company
was permitted to sell its remaining 1,617,000 Amway Japan Limited shares ("Amway
Shares").  The Company received proceeds of $58.8 million and realized a gain of
$9.5 million in 1995 on the sale of the Amway Shares. The Company no longer
holds any equity interest in Amway Japan Limited.



                                          31
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.  DEBT

    At the year end dates indicated below, long-term debt, net of related
discounts, consisted of the following (in thousands):

<TABLE>
<CAPTION>
 
                                            JUNE 30,     DECEMBER 31,     DECEMBER 31,
                                              1997           1996             1995
                                           ------------   -------------   ------------
<S>                                        <C>            <C>             <C>
Revolving credit facility, at a
    weighted average interest rate
    of 9.2% at June 30, 1997 and
    9.1% at December 31, 1995.            $     10,000   $         --    $    28,231
The Notes, at an interest rate of at
    13.5%, due 2001                            100,000        100,000        100,000
Miramar Acquisition Note,
    Industrial Development Revenue
    Bonds, and other, net of
    unamortized discount of $6.3
    million at June 30, 1997 and
    $7.0 and $8.3 million at
    December 31, 1996 and 1995,
    respectively, at stated interest
    rates of 4.7% to 13.1%, due in
    varying installments through
    2005                                        25,392         24,861         24,107
                                           -----------   ------------    -----------
       Total debt                              135,392        124,861        152,338
Less-current maturities                           (154)          (309)          (893)
                                           -----------   ------------    -----------
       Total long-term debt                $   135,238   $    124,552    $   151,445
                                           -----------   ------------    -----------
                                           -----------   ------------    -----------

</TABLE>
 
    Aggregate maturities of long-term debt are approximately $.2 million in the
fiscal year ending June 30, 1998 (fiscal 1998), $.1 million in fiscal 1999,
$11.1 million in fiscal 2000, $122.9 million in fiscal 2001, none in fiscal 2002
and $1.1 million thereafter. At June 30, 1997, the fair value of long-term debt
was approximately $133.5 million.

    In July 1994, the Company arranged a senior bank credit facility (the "Old
Credit Facility"), consisting of a $60 million revolving credit facility and a
$25 million letter of credit facility, and expiring in July, 1997.
Concurrently, the Company also issued $100 million aggregate principal amount of
13 1/2% Senior Subordinated Notes due 2001 (the "Notes").

    At June 30, 1997, the Old Credit Facility, as amended and restated,
consisted of a $29.2 million revolving credit facility and a $30.8 million
letter of credit facility. Weighted average borrowings outstanding under the
revolving credit facility during 1997 were $8.2 million. Aggregate borrowings
and outstanding letters of credit under the Old Credit Facility were limited to
eligible receivables and eligible inventories, as defined. At June 30, 1997, the
Company had $19.2 million of availability under the revolving credit facility,
and outstanding letters of credit aggregating $22.2 million. Approximately $15.7
million of such letters of credit collateralized insurance programs; the
remainder principally related to dealer floor plan financing arrangements with
certain financial institutions and to liabilities retained by the Company in
connection with divested operations (see Note 7).

                                          32
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.  DEBT (CONTINUED)

    Effective July 1, 1997, the Company arranged a $73 million senior bank
credit facility (the "Credit Facility"), consisting of a $35.0 million revolving
credit facility, a $15.0 million term loan facility and a $23.0 million letter
of credit facility, and expiring in June, 2000. Aggregate borrowings and
outstanding letters of credit under the Credit Facility are limited to eligible
receivables and eligible inventories, as defined. Borrowings under the revolving
credit facility are intended for general corporate and working capital purposes
and, subject to the achievement of certain target financial performance
measures, for the purchase of up to $10 million aggregate principal amount of
the Notes. Borrowings under the term loan facility are designated solely for the
purchase of up to $15 million aggregate principal amount of the Notes. The
Credit Facility replaces the Old Credit Facility, which was to expire in July,
1997.

    The borrowings under the Credit Facility and the Notes are collateralized
by substantially all of the assets of the Company and its subsidiaries and are
guaranteed by substantially all of the Company's subsidiaries ("Subsidiary
Guarantors"). The following is summary financial information pertaining to the
Subsidiary Guarantors as of and for the six months ended June 30, 1997 (in
thousands):


    Current assets                                    $  142,994
    Noncurrent assets                                    101,194
    Current liabilities                                   79,324
    Noncurrent liabilities                                30,671

    Net revenues                                         252,045
    Gross profit                                          32,110
    Operating profit                                       6,149
    Net loss                                               (390)
                                                      ----------
                                                      ----------

    At June 30, 1997, the aggregate combined net assets, net revenues, earnings
and equity of the Subsidiary Guarantors were substantially equivalent to the net
assets, net revenues, earnings and equity of the Company, except for certain
obligations and operating, interest and other expenses pertaining to
non-guarantor entities. In addition, the Subsidiary Guarantors are jointly and
severally liable with respect to the Notes, and such guarantees are full and
unconditional (except as subject to a fraudulent conveyance savings clause).
Each of the Subsidiary Guarantors is a wholly-owned subsidiary of the Company.
The Company has no operations independent of those of the Subsidiary Guarantors,
and the non-guaranteeing subsidiaries of the Company, individually and in the
aggregate, are  inconsequential. Management believes that separate financial
statements of the Subsidiary Guarantors are inconsequential to investors and
such financial statements are not included herein.

    The Credit Facility and the Indenture contain restrictive covenants which,
among other things, limit the ability of the Company to incur other
indebtedness, engage in transactions with affiliates, incur liens, make certain
restricted payments, and enter into certain business combination and asset sale
transactions. The Credit Facility also requires the Company to satisfy certain
financial tests and ratios and restricts capital expenditures. In addition, the
Credit Facility contains provisions which may require accelerated repayment of
the Credit Facility and/or limit the Company's access to the facility upon the
incurrence of specific obligations or significant changes in the financial
condition, business, properties, prospects or operations of the Company. As of
June 30, 1997, the Company was in compliance with all covenants under the Credit
Facility and the Indenture.


                                          33
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.  DEBT (CONTINUED)

    On January 21, 1997, the Company entered into an option agreement (the
"Option"), with a shareholder, pursuant to which the Company was granted an
option to purchase up to $25 million aggregate principal amount of the Notes at
par.  The Option is exercisable at any time or from time to time, in whole or in
part, through January 19, 1998.  The Company paid $.8 million for the Option.

    Subsequent to June 30, 1997, the Company entered into an agreement (the 
"Tender Agreement"), with an unrelated third party, pursuant to which the 
third party has agreed to tender certain of the Notes held by such party, 
with an aggregate face value of $32.0 million, for purchase by the Company at 
a price equal to 99.0% of par. In consideration of entering into the 
agreement, the Company paid such third party a fee of $960,000 (3% of par). 
As a condition to the Tender Agreement the holder has also agreed to provide 
their consent with respect to certain proposed amendments to the Indenture. 
The Tender Agreement, as extended, expires October 15, 1997.

    On July 10, 1997, the Company commenced an offer to purchase and a consent
solicitation (the "Tender Offer and Consent"), for to up to $75 million
aggregate principal amount of the Notes, including those subject to the Tender
Agreement but excluding those subject to the Option. Terms of the Tender Offer
and Consent provide for the purchase of all validly tendered Notes, as defined
and subject to certain conditions, at a price equal to 99.0% of par. In
addition, holders submitting valid tenders of Notes will have, as a condition to
tendering, provided their consent with respect to certain proposed changes to
the Indenture, for which consent the holder will receive a fee equal to 3.0% of
par (the "Consent Fee"), of the Notes tendered by such holder.  The Company has
commenced this offering with the intent of reducing the Company's interest
expense burden and increasing the Company's financial flexibility. The Company
has been engaged in negotiations with various financial institutions and other
parties with regard to securing new financing to fund the purchase of the Notes
under the Option and the Tender Offer and Consent. Negotiations with certain of
these parties recently were terminated, and the Company is currently pursuing
alternate means to finance the repurchase of the Notes. There can be no
assurance, however, that the Company will be able to obtain, on terms acceptable
to the Company, the financing necessary to consummate the Tender Offer and
Consent.

5.  INCOME TAXES

    The Company utilizes the liability method to account for income taxes. The
liability method requires that deferred assets and liabilities be recognized for
the expected future tax effects of the temporary differences between the tax and
book bases of the assets and liabilities.

    Components of the provision for income taxes were as follows for the six
months ended June 30, 1997 and for the years ended December 31, 1996, 1995 and
1994 (in thousands):

                       JUNE 30,      DECEMBER 31,   DECEMBER 31,  DECEMBER 31,
                         1997            1996           1995          1994
                        --------     ------------   ------------   ------------
CURRENT:
  Federal              $   --       $     --       $  1,050       $     --
  State and foreign       246            860          1,040            522
                        --------     ------------   ------------   ------------
       Total current      246            860          2,090            522
Deferred                   --             --             --            518
                        --------     ------------   ------------   ------------
       Total           $  246       $    860       $  2,090       $  1,040
                        --------     ------------   ------------   ------------
                        --------     ------------   ------------   ------------


                                          34
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.  INCOME TAXES (CONTINUED)

    At June 30, 1997, the Company had total net operating loss carryforwards of
approximately $177 million. Realization of $28 million of certain net operating
loss carryforwards is limited annually under Section 382 of the Internal Revenue
Code, as amended.  These net operating loss carryforwards can only be used to
offset taxable income of certain companies. The Company also had unused minimum
tax credits that may be available to offset future federal income tax
liabilities.

    The reconciliation of the federal statutory provision to the income tax
provision for financial reporting purposes for the six months ended June 30,
1997 and for the years ended December 31, 1996, 1995 and 1994 was as follows (in
thousands):

<TABLE>
<CAPTION>
 
                                          JUNE 30,      DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                            1997           1996           1995            1994
                                          ---------     ------------   ------------   ------------
<S>                                       <C>           <C>            <C>            <C>
Tax expense (benefit) at
  FEDERAL STATUTORY RATES                $ (3,300)      $    386       $ (1,909)      $ (5,751)
Losses without income tax benefit           3,300           (386)         2,959          6,269
Foreign and state income taxes                246            860          1,040            522
                                          ---------     ------------   ------------   ------------
      Total provision                    $    246       $    860       $  2,090       $  1,040
                                          ---------     ------------   ------------   ------------
                                          ---------     ------------   ------------   ------------

    Temporary differences and carryforwards which give rise to deferred tax assets and liabilities at June 30, 1997 and
December 31, 1996, 1995 and 1994 were as follows (in thousands):

                                          JUNE 30,      DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                            1997           1996           1995            1994
                                          ---------     ------------   ------------   ------------
Loss carryforwards                       $ 67,145       $ 69,320       $ 66,696       $ 72,675
Liabilities retained related to
  previously divested businesses            4,718          5,474          9,543         12,924
Other                                      21,392         23,218         20,902         19,300
Valuation allowance                       (91,690)       (94,883)       (92,446)       (74,761)
                                          ---------     ------------   ------------   ------------
  Deferred tax assets                       1,565          3,129          4,695         30,138
Deferred tax liabilities                   (1,565)        (3,129)        (4,695)       (30,138)
                                          ---------     ------------   ------------   ------------
  Net deferred taxes                     $     --       $     --       $     --       $     --
                                          ---------     ------------   ------------   ------------
                                          ---------     ------------   ------------   ------------

</TABLE>
 
    The company has determined that the realization of the loss carryforwards
and net deferred tax assets do not meet the recognition criteria under SFAS NO.
109, "Accounting for Income Taxes," and accordingly, valuation allowances have
been established for the tax benefit of these loss carryforwards and the net
deferred tax assets.


6.  EMPLOYEE BENEFIT PLANS

    The Company and certain of its subsidiaries maintain defined contribution
retirement plans covering substantially all full-time employees. Under certain
of these plans, eligible participants may make voluntary contributions up to 25%
of their compensation, as permitted by plan provisions.  The plans provide for
the Company to make matching and other contributions to eligible participants.
The Company made contributions to these plans aggregating $.4 million for the
six months ended June 30, 1997 and $1.1 million, $1.0 million and $.5 million
during the years 1996, 1995 and 1994, respectively.

                                          35
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.  COMMITMENTS AND CONTINGENCIES

    DEALER INVENTORY FLOOR PLAN FINANCING:

    The Company and its subsidiaries are parties to certain dealer inventory
floor plan financing arrangements with various financial institutions pursuant
to which each may be required, in the event of default by a financed dealer, to
repurchase products previously sold to such dealer. Under certain of these
arrangements, the Company also has recourse liability in the event of dealer
default. The Company repurchased $1.4 million of such dealer inventory in the
six months ended June 30, 1997 and $3.2 million, $1.9 million and $.8 million in
1996, 1995 and 1994, respectively. The Company incurred $.6 million in recourse
losses under these arrangements in the six months ended June 30, 1997 and $.4
million in 1996. As of June 30, 1997, the Company and certain subsidiaries were
contingently liable under these agreements for repurchase and recourse in the
amounts of $41.7 million and $12.3 million, respectively.

    The Company generally has not provided reserves, other than immaterial
reserves at certain subsidiaries, for losses and costs which may result should
the Company be required to repurchase product from a defaulting dealer. Although
the ultimate loss which might be incurred as a result of such contractual
obligation is uncertain, the Company believes that any such losses that may be
incurred would not have a material effect on its consolidated operating results
or financial position.

    EMPLOYEE MATTERS:

    The Company and its subsidiaries have insurance for workers' compensation,
health, general and auto liability losses in excess of predetermined loss
limits. Provision has been made in the consolidated financial statements for
estimated losses resulting from claims incurred prior to the balance sheet date,
which were below the amounts of the predetermined loss limits.

    LEASES AND COMMITMENTS:

    The Company, through its subsidiaries, leases certain facilities and
equipment under operating lease arrangements which expire at various dates
through 2001. These leases generally contain renewal options and require the
Company to pay the maintenance, insurance, taxes and other expenses in addition
to the minimum annual rentals. Rent expense related to operating leases was $1.0
million for the six months ended June 30, 1997, and $2.2 million, $2.1 million
and $1.9 million for the years ended December 31, 1996, 1995 and 1994,
respectively. The Company has no material future lease commitments.

    Wood Manufacturing Company, Inc. ("Wood") sponsors fishing tournaments and
maintains advertising contracts which require cash payments. Wood has also
agreed to provide certain products as tournament prizes. Aggregate future
commitments under these arrangements approximate $1.0 million for the fiscal
years 1998-2000.

    The Company has an agreement with Mercury Marine, a division of Brunswick
Corporation ("Brunswick"), for the purchase of outboard engines. The agreement,
which will expire December 31, 2002, contains minimum annual purchase
requirements in order for the Company to earn certain discounts and/or receive
certain rebates. As of June 30, 1997, the Company has received $1.7 million as


                                          36
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

an advance discount against future outboard engine purchases which is subject to
refund if certain minimum purchases are not obtained.

    LEGAL AND ENVIRONMENTAL:

    The Company and its subsidiaries are defendants in legal proceedings
arising in the ordinary course of business. Although the outcome of these
matters cannot be determined, in the opinion of management and outside counsel,
disposition of these proceedings will not have a material effect on the
Company's consolidated financial position or results of operations.

    In 1995, the Company signed a final consent order with the Florida
Department of Environmental Protection to settle all outstanding issues with
respect to an acetone leak at its plant in Sarasota, Florida, and recorded
additional provisions of $2.2 million to cover the estimated cost of remediation
activities required at this site.  Based on available information, the Company
believes reserves of $2.0 million as of June 30, 1997 are adequate to cover such
estimated costs.  The Company made payments for penalties and remediation
activities of $.2 million for the six months ended June 30, 1997, and $.8
million, $1.0 million and $.3 million during the years ended December 31, 1996,
1995 and 1994, respectively.

    Historically, the Company's facilities have used underground storage tanks
("USTs") for storage of certain materials associated with the Company's
operations, including petroleum, acetone and resins. The Company is currently in
the process of removing the remaining USTs on its properties. As in the past, in
the course of removing such USTs, contamination of soils and groundwater may be
discovered, in which case environmental laws generally would require a
contamination assessment and the implementation of a cleanup plan. The costs
associated with any such necessary remedial action could be significant, but are
not expected to be significant because the Company has no evidence that there
have been material releases from the USTs. In addition, many of the states in
which these tanks are located have state funds available to reimburse owners for
the cost of remedial action associated with petroleum releases from USTs.
However, until the tanks are removed in compliance with environmental laws, the
Company cannot predict with any certainty the nature or extent of such
contamination, if any, or potential remedial costs associated therewith.

    DIVESTED BUSINESSES:

    In connection with certain previously divested businesses, the Company
retained certain obligations and remains contingently liable under limited
indemnities related to such matters as taxes, insurance, environmental claims,
litigation and postretirement medical benefits. Cash expenditures related to
such obligations are expected to be payable over an extended period of time.
Where appropriate, the Company has established reserves in response to these
matters.

    The Company also incurs costs from time to time for environmental claims
relating to certain of its previously divested businesses. The Company made
payments relating to environmental costs incurred with respect to these
businesses of approximately $.3 million for the six months ended June 30, 1997,
and $1.9 million and $.6 million during the years ended December 31, 1996 and
1995, respectively. The Company anticipates total environmental-related costs
associated with its divested operations to range from approximately $5 million
to $6 million, which include Comprehensive Environmental Response Compensation
and Liability Act, as amended ("CERCLA") type liabilities, and which costs are
likely to be incurred over a period of up to 10 years. With respect to these
potential liabilities, the Company has


                                          37
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

been identified as a potential responsible party at approximately 10 active
sites. Based on available information, the Company believes adequate reserves
have been provided to cover such potential costs as
of June 30, 1997.

    Other noncurrent liabilities consist of the following (in thousands):

                                           JUNE 30,   DECEMBER 31, DECEMBER 31,
                                             1997         1996         1995
                                          ---------   -----------   ------------
    Liabilities related to previously
      Divested businesses:
      Postretirement medical benefits    $  1,378    $    2,487     $  10,358
      Insurance                             5,589         6,161         8,255
      Legal and environmental               7,769         8,058         9,960
      Other                                 7,261         7,326         6,567
                                          ---------   -----------   ------------
                                           21,997        24,032        35,140
      Less: Portion included in
      accrued liabilities                  (3,750)       (3,750)       (6,000)
                                          ---------   -----------   ------------
      Long-term portion                    18,247        20,282        29,140
    Other noncurrent liabilities
      related to current operations         7,576         7,667         7,481
                                          ---------   -----------   ------------
         Total other noncurrent
          liabilities                   $  25,823    $   27,949     $  36,621
                                          ---------   -----------   ------------
                                          ---------   -----------   ------------

    LETTERS OF CREDIT:

    At June 30, 1997, the Company had outstanding letters of credit aggregating
$22.2  million. Approximately $15.7 million of such letters of credit
collateralized insurance programs; the remainder principally related to dealer
floor plan financing arrangements with certain financial institutions and to
liabilities retained by the Company in connection with divested operations.


8.  LITIGATION SETTLEMENT

    In December 1994, the Company reached an agreement in principle to settle
an antitrust lawsuit it had filed against Brunswick. Under the terms of the
settlement, the Company signed a long-term engine contract and agreed to dismiss
its claims, with prejudice. The Company received $4 million as an advance
discount against future engine purchases and $13 million as a settlement,
including reimbursement for legal fees and expenses. The $13 million settlement
net of legal fees and expenses was included in investment and other income in
the accompanying consolidated statement of operations for the year ended
December 31, 1994.


9.  RELATED-PARTY TRANSACTIONS

    The Company pays a management fee to Jacobs Management Corporation ("JMC"),
a stockholder of the Company and an affiliate of Irwin L. Jacobs, for certain
consulting and management services and subleases certain office facilities to
JMC. Net payments under these arrangements


                                          38
<PAGE>


                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.  RELATED-PARTY TRANSACTIONS (CONTINUED)

aggregated approximately $.7 million during the six months ended June 30, 1997
and $1.5 million, $1.4 million and $1.0 million during the years 1996, 1995 and
1994, respectively.

    Effective January 21, 1997, the Company purchased for $.8 million, the
Option, as described in Note 4, from RDV Corporation, an affiliate of RDV
Holdings, Inc., a stockholder of the Company.

    Effective January 1, 1997, the Company sold, for a nominal amount, the
stock of a wholly-owned subsidiary engaged in the management of a newly
developed fishing tournament program, to Operation Bass, Inc., an affiliate of
Irwin L. Jacobs.  The subsidiary's assets were minimal and liabilities, both
existing and contingent, approximated $1.0 million at the time of the sale.

    During 1996 and 1995, the Company recorded revenues from boat sales to
affiliates of approximately $1.4 million and $5.4 million, respectively.
Management believes the terms of such sales were consistent with terms of sales
to non-affiliated parties. No such sales were recorded in the six months ended
June 30, 1997.

    In 1995, pursuant to a contract entered into at the time of the
Restructuring, the Company purchased a marina for $5.0 million from RDV
Properties, Inc., an affiliate of RDV Holdings, Inc., a stockholder of the
Company.

    In 1994, Miramar recognized a gain of approximately $0.7 million on the
sale of certain Minstar debentures.  Such gain has been included in investment
and other income in the accompanying consolidated statement of operations for
the year ended December 31, 1994.

    During 1989, Minstar entered into an agreement with Volvo North America
Corporation ("Volvo"), a minority stockholder of the Company (and previously a
stockholder of IJ Holdings), to supply Genmar Industries, Inc., a wholly-owned
subsidiary of Minstar, with certain percentages of its marine stern drive engine
requirements through August 1999.












                                          39
<PAGE>


                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10. SUPPLEMENTAL STATEMENTS OF OPERATIONS INFORMATION (UNAUDITED) (IN
THOUSANDS)

<TABLE>
<CAPTION>
 
                                        First         Second          Third         Fourth
                                       Quarter        Quarter       Quarter        Quarter          Total
                                   -------------   -----------    -------------  -----------     ---------

                                                                1997 (six months)
                                   -----------------------------------------------------------------------
    <S>                           <C>             <C>                 <C>             <C>       <C>
    Net revenues                  $  120,023      $ 140,825           --              --        $260,848
    Gross profit                      14,093         19,295           --              --          33,388
    Operating profit (loss)           (2,799)         4,299           --              --           1,500
    Net loss                          (9,220)          (728)          --              --          (9,948)
                                   -------------   -----------    -------------  -----------     ---------
                                   -------------   -----------    -------------  -----------     ---------
                                                                   1996
                                   -----------------------------------------------------------------------
    Net revenues                  $  150,492      $ 153,610      $ 145,562      $ 168,392       $618,056
    Gross profit                      19,817         21,273         18,931         27,835         87,856
    Operating profit                   3,711          7,525          3,256          8,711         23,203
    Net income (loss)                 (1,966)         1,692         (2,252)         2,801            275
                                   -------------   -----------    -------------  -----------     ---------
                                   -------------   -----------    -------------  -----------     ---------
                                                                   1995
                                   -----------------------------------------------------------------------
    Net revenues                  $  134,719      $ 140,737      $ 129,147      $ 143,956       $548,449
    Gross profit                      18,628         21,483         13,549         15,282         68,942
    Operating profit (loss)            2,182          5,400         (2,461)        (2,350)         2,771
    Net income (loss)                 (2,616)         7,381         (3,715)        (8,754)        (7,704)
                                   -------------   -----------    -------------  -----------     ---------
                                   -------------   -----------    -------------  -----------     ---------

</TABLE>
 


                                          40
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                   SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                    (In Thousands)

<TABLE>
<CAPTION>
 
                                                                            Charge for
                                                Balance      Provision    Purpose that       Balance
                                               Beginning    Charged to      Reserve was       End
                                                of Year      Operations    Established       of Year
                                              ----------    ------------   -------------   ----------

<S>                                           <C>           <C>            <C>             <C>
Reserve for doubtful accounts

For the year ended December 31, 1994          $  2,169      $     739      $    (452)      $  2,456
                                              ----------    ------------   -------------   ----------
                                              ----------    ------------   -------------   ----------

For the year ended December 31, 1995          $  2,456      $   1,373      $    (341)      $  3,488
                                              ----------    ------------   -------------   ----------
                                              ----------    ------------   -------------   ----------

For the year ended December 31, 1996          $  3,488      $   2,297      $  (1,677)      $  4,108
                                              ----------    ------------   -------------   ----------
                                              ----------    ------------   -------------   ----------

For the six months ended June 30, 1997        $  4,108      $     166      $     (25)      $  4,249
                                              ----------    ------------   -------------   ----------
                                              ----------    ------------   -------------   ----------

</TABLE>
 






                                          41





<PAGE>


ITEM 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The following table sets forth certain information with respect to the
executive Officers and Directors of the Company:
              NAME           AGE                   TITLE
    ---------------------    -------------------------------------------------
    Irwin L. Jacobs          56   Chairman of the Board and Director
    Grant E. Oppegaard       54   President, Chief Executive Officer and
                                  Director
    Roger R. Cloutier, II    44   Executive Vice President and Chief Financial
                                  Officer
    Mary P. McConnell        45   Senior Vice President, Secretary and General
                                  Counsel
    George E. Sullivan       53   Senior Vice President-Marketing
    David H. Vigdal          55   Senior Vice President-Operations
    Mark W. Peters           35   Vice President and Controller
    James B. Farrell         61   Director and President of Hatteras Yachts
    Bjorn Ahlstrom           63   Director
    Daniel G. DeVos          39   Director
    Daniel T. Lindsay        53   Director
    Robert B. Mercer         46   Director
    William W. Nicholson     54   Director
    Carl R. Pohlad           82   Director
    James O. Pohlad          44   Director
    Jerry L. Tubergen        44   Director

    Pursuant to the Stockholders' Agreement, the Board of Directors of the
Company will consist of eleven members, four of whom will be designated by Irwin
L. Jacobs, two by RDV (AJL) Holdings, Inc. (owned by Richard M. DeVos), two by
the Pohlad Group, two by certain other stockholders of the Company and the
President or the Chief Executive Officer. Carl R. Pohlad is the father of James
O. Pohlad and Daniel G. DeVos is the son of Richard M. DeVos.

    Mr. Jacobs has served as Chairman and a Director of the Company since April
1994. Mr. Jacobs was also Chief Executive Officer of the Company from April 1994
through December 1995. Mr. Jacobs also serves or has served as President and a
director of IJ Holdings from 1988 to 1994; Chairman and Chief Executive Officer
of Minstar from 1982 to 1992; Chairman and President of Jacobs Industries, Inc.
("JII"), a holding company (since 1977); President and a director of JMC, a
management company (since 1981); Chairman of Watkins, a company engaged in
direct marketing of household and health products (since 1978); Chairman of
Jacobs Trading Company, a company engaged in wholesale and retail sale of
close-out merchandise (since 1989); President and Chief Executive Officer of
Jacobs Investors, Inc., a management services company and of IMR General, Inc.,
which is the general partner of IMR Management Partners, L.P., the general
partner of the IMR Fund, L.P., an equity investment fund company (since 1990);
President and Director of Jacobs Realty II, Inc. (since 1993); Director of IPI,
Inc., a public company engaged in the franchising of business printing centers
(since March 1997); and Chairman of Operation Bass, Inc., a tournament fishing
management company (since July 1996).

    Mr. Oppegaard has served as President of the Company since November 1996,
and as Chief Executive Officer since January 1996. Prior to January 1996, Mr.
Oppegaard has served the Company in various capacities since 1995, the most
recent as Senior Vice President of Operations. Mr. Oppegaard has served as a
consultant and/or employee of various entities, including the Company, from 1994
to 1995. In December, 1993 Mr. Oppegaard was retained as a consultant by MEI
Salons Corp. ("MEI"), a company associated with the management of professional
beauty salons, to evaluate the company's operations.  In



                                          42
<PAGE>

January, 1994, he began serving MEI as Chief Operating Officer and in
February, 1994, MEI filed a petition under the federal bankruptcy laws. Mr.
Oppegaard resigned from his employment with MEI in July, 1994. From 1990 to
1992, Mr. Oppegaard was Executive Vice President and Senior Operations Officer
of Fingerhut, Inc., a direct marketing company.

    Mr. Cloutier has served as Executive Vice President and Chief Financial
Officer of the Company since February 1996. Since February 1992, Mr. Cloutier
has served as Vice President of Jacobs Investors, Inc. and IMR General, Inc.,
and is a limited partner in IMR Management Partners, L. P., the general partner
of IMR Fund, L. P. Related to IMR Fund's portfolio investments, since May 1994,
Mr. Cloutier has served as a Director, and since October 1996, as Chairman of
Accent Software International Ltd., a company which designs and develops
multilingual word processing and intelligent agent software products. From April
1990, Mr. Cloutier has served as Senior Vice President of Jacobs Management
Corporation. Mr. Cloutier began his career with Arthur Andersen & Co. and is a
certified public accountant.

     Ms. McConnell has served as Senior Vice President, Secretary and General
Counsel of the Company since November 1996 and as Vice President, Secretary and
General Counsel from December 1995 through October 1996. From January to
December 1995, Ms. McConnell was Vice President and Assistant General Counsel of
the Company. Prior to joining the Company in 1995, Ms. McConnell was a partner
with the law firm of Lindquist & Vennum, where she practiced since 1988.

     Mr. Sullivan has served as Senior Vice President-Marketing of the Company
since November 1996.  From May 1995 to November 1996, Mr. Sullivan served as
Vice President and General Manager of the Company's SAM's Club Boat Buying
Program.  From 1990 to May 1995, Mr. Sullivan served in various capacities at an
indirect subsidiary of the Company, Wellcraft Marine Corp., most recently as
Senior Vice President of Marketing and Planning. Prior to joining the Company,
Mr. Sullivan served at U.S. Marine Corp. (Bayliner) as Vice President of
Marketing and Communications, and in various other capacities, from 1973 to
1990.

     Mr. Vigdal has served as Senior Vice President-Operations of the Company
since joining the Company in July 1997. Prior to joining the Company, Mr. Vigdal
worked as Executive Vice President-Administration for Premier Salons from
1993-1996. From 1967 to 1993, Mr. Vigdal served in various capacities, including
Vice President-Administration for both Cable Value Network (CVN) and Fingerhut
Companies, Inc.

     Mr. Peters has served as Vice President and Controller of the Company since
July 1997. From December 1995 to July 1997, Mr. Peters served as Controller of
the Company. Prior thereto, Mr. Peters served the Company in a number of
management/finance capacities since 1984.

    Mr. Farrell has served as President of the Company's Hatteras Yachts
division since November, 1996.  Prior to that, Mr. Farrell served as President
and Chief Operating Officer of the Company since December 1995. Mr. Farrell
served as Vice President, Secretary and General Counsel of the Company from
April 1994 to December 1995. From November, 1995 to November, 1996, Mr. Farrell
also served as President of Minstar and Genmar Industries. Mr. Farrell was Vice
President, Secretary and General Counsel of Minstar (1984 through November
1995); and Vice President and Secretary of Genmar Industries (1988 through
November 1995).

     Mr. Ahlstrom has served as a director of the Company since April 1994. Mr.
Ahlstrom is also a director of United Jersey Bank (since 1980); Volvo GM Heavy
Truck Corporation (since 1981); Nederman Corporation (since 1990); self-employed
as an independent consultant to various companies, and a special limited partner
of IMR Management Partners, L.P. and the IMR Fund L.P. Mr. Ahlstrom served as
President and Chief Executive Officer and a director of Volvo from 1971 to 1991.


                                          43
<PAGE>

     Mr. DeVos has served as a director of the Company since April 1994. Mr.
DeVos is also President/CEO of Capital DP Fox Ventures, a real estate
development and sports management firm; Vice President-Corporate Affairs (since
1993), member of the Policy Board (since 1989) and Executive Committee (since
1992) of Amway Corporation, a company engaged in the direct sale of consumer
products; and trustee of First Union Real Estate Investments, a real estate
investment trust. Mr. DeVos previously held other vice president positions at
Amway Corporation.

     Mr. Lindsay has served as a director of the Company since April 1994. Mr.
Lindsay is Secretary and a director of JII (since 1977); Secretary and a
director of Watkins (since 1979); Executive Vice President, Secretary and a
director of JMC (since 1981); Secretary and a director of Jacobs Investors, Inc.
and IMR General, Inc., a limited partner in IMR Management L.P., the general
partner of IMR Fund, L.P. (since 1992); a former director of Miramar; and a
former director of Mountain Parks Financial Corporation (from 1980 through
1996).

     Mr. Mercer has served as a director of the Company since April 1994. Mr.
Mercer is also Senior Vice President of Volvo (since 1989) and Vice President,
Staff & Services and General Counsel of Volvo Cars of North America, Inc. (since
1993).

     Mr. Nicholson has served as a director of the Company since April, 1996.
Mr. Nicholson is a private investor and serves as a consultant to Amway
Corporation ("Amway").  From 1984 through 1992, Mr. Nicholson served as Chief
Operating Officer of Amway.  Mr. Nicholson is also a limited partner of the IMR
Fund, L.P.

     Mr. Carl R. Pohlad has served as a director of the Company since April
1994. Mr. Pohlad is also President and a director of Marquette Bancshares, Inc.,
a multi-bank holding company (since 1993); a former director of IJ Holdings; a
director and Chairman of the Board of Mesaba Holdings, Inc., a regional airline;
and is owner and managing general partner of the Minnesota Twins, a major league
baseball franchise.  In addition, from 1986 through October 1994, Mr. Pohlad
served as a director and Chairman of the Board of MEI Diversified, Inc., a
company associated with the development, manufacture and sale of medical
products and the management of real estate.

     Mr. James O. Pohlad has served as a director of the Company since April
1994. Mr. Pohlad is also an Executive Vice President and director of Marquette
Bancshares, Inc. (since 1993); a former director of IJ Holdings; and a director
and Vice President of the Pohlad Companies.

     Mr. Tubergen has served as a director of the Company since April 1994. Mr.
Tubergen is also President and Chief Executive Officer of RDV Corporation, a
private financial management firm (since its formation in 1991); and a director
of Alternative Living Services (NYSE: ALS) (since 1995). Mr. Tubergen served as
the managing partner of Deloitte & Touche in Grand Rapids, Michigan from 1987 to
1991.




COMPENSATION OF DIRECTORS

     The Company pays its directors $7,500 annually in addition to $2,500 per
committee meeting attended. Jacobs, Farrell, Lindsay and Oppegaard do not
receive any compensation as directors of the Company.


                                          44
<PAGE>

COMMITTEES

     Since 1995, the Board has had an Executive/Audit/Compensation Committee.
There is no nominating committee of the Board; nominees for director are
selected by the Board of Directors.

    EXECUTIVE/AUDIT/COMPENSATION COMMITTEE. The Executive/Audit/Compensation
Committee recommends to the Board of Directors the engagement of independent
public accountants of the Company, reviews the scope and results of audits of
the Company, reviews the Company's internal accounting controls and reviews the
professional services furnished to the Company by its independent public
accountants.  The Executive/Audit/Compensation Committee also reviews the
compensation of officers at the Company and operating company presidents, and
provides oversight to the operations of the Company. The
Executive/Audit/Compensation Committee members are Bjorn Ahlstrom, Daniel G.
DeVos, William W. Nicholson, James O. Pohlad and Jerry L. Tubergen.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Executive/Audit/Compensation Committee is responsible for establishing
the Company's policies relating to and the components of executive officer
compensation. None of the executive officers of the Company has served as a
director or member of the compensation committee of another entity that had any
executive officer who served on the Executive/Audit/Compensation Committee or as
a director of the Company.

     The following are descriptions of transactions which have occurred since
January 1, 1997 which the Company or its predecessors was or is to be a party
and in which a member or members of the Executive/Audit/Compensation Committee
had or are to have a direct or indirect material interest.

     The Company has entered into a management services agreement with JMC. The
management services provided include services of an advisory, analytical and
consulting nature as the Company may reasonably request relating to the
management, business operations, assets and planning of the Company. During
fiscal 1997, the Company paid JMC $890,000 for such services. The Company
believes the terms of such agreement are as favorable as could have been
obtained from an unaffiliated third party for comparable services.

    During 1997, the Company leased office space to JMC. JMC made lease
payments to the Company in the amount of $184,000 which equaled the
proportionate share of the Company's cost of such leased space based on the
amount of square feet of space occupied by JMC. The Company believes the terms
of such lease for such space are as favorable as could have been obtained from
an unaffiliated third party.

    Effective January 21, 1997, the Company purchased, for $.8 million, the
Option from RDV Corporation, an affiliate of RDV Holdings, Inc., a stockholder
of the Company.

    Effective January 1, 1997, the Company sold, for a nominal amount, the
stock of a wholly-owned subsidiary engaged in the management of a newly
developed fishing tournament program, to Operation Bass, Inc., an affiliate of
Irwin L. Jacobs.  The subsidiary's assets were minimal and liabilities, both
existing and contingent, approximated $1.0 million at the time of the sale.


                                          45
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

The following table sets forth the compensation paid for services rendered in
all capacities to the Company during each of the last three fiscal years of the
Company to the Chief Executive Officer of the Company and to the four most
highly compensated executive officers.


<TABLE>
<CAPTION>

                                                                  ANNUAL COMPENSATION(5)
                                                                  ----------------------
NAME AND PRINCIPAL POSITION                                                                OTHER ANNUAL
---------------------------
                                                  YEAR        SALARY       BONUS (6)      COMPENSATION (7)
                                                  --------------------------------------------------------
<S>                                              <C>         <C>           <C>           <C>
Grant E. Oppegaard                                1997       $200,000              -              -
Chief Executive Officer and President  (1)        1996        300,000       $275,917              -
                                                  1995        174,461              -              -

Roger R. Cloutier, II                             1997        120,000              -              -
Executive Vice President and Chief                1996        183,333        126,462              -
Financial Officer (2)                             1995              -              -              -

William A. Munsell                                1997        120,000              -              -
Executive Vice President-Operations (3)           1996        200,000        137,959              -
                                                  1995        200,000         60,000              -

George E. Sullivan                                1997         85,000              -              -
Senior Vice President-Marketing (4)               1996        160,000         73,578              -
                                                  1995        155,768         55,000              -

Mary P. McConnell,                                1997         85,000              -              -
Senior Vice President, Secretary and              1996        140,000         64,380              -
General Counsel                                   1995        125,000         25,000              -


</TABLE>


(1) Mr. Oppegaard was elected Chief Executive Officer effective January 1996,
and President effective November 1996. Prior to January 1996, he served the
Company in various capacities, including Senior Vice President of Operations.

(2) Mr. Cloutier joined the Company effective February, 1996.

(3) Mr. Munsell resigned his position of Executive Vice President-Operations
subsequent to June 30, 1997.

(4) Compensation for a portion of 1995 was paid by Wellcraft Marine Corp., an
indirect subsidiary of the Company.

(5) Compensation for 1997 represents amounts paid for the six months ended June
30, 1997.

(6) Bonus amounts in 1997 and 1996 were payable based on formulas tied to the
Company's operating performance, subject to approval of the Board of Directors
of the Company.  Bonus amounts in 1995 were payable at the discretion of the
Board of Directors of the Company.

(7) In accordance with the rules of the Securities and Exchange Commission,
amounts totaling less than the lesser of $50,000 or 10% of the total of annual
salary and bonus reported for each executive officer have been omitted.


                                          46
<PAGE>

RETIREMENT PLANS AND INSURANCE

     The Genmar Retirement Plan (the "Retirement Plan") is a retirement plan
qualified under Section 401(k) of the Internal Revenue Code of 1954 and consists
of a deferred savings program which allows employees to contribute up to 15% of
their pre-tax earnings and up to 10% of their after-tax earnings to the
Retirement Plan. The Retirement Plan allows Minstar and Genmar Industries to
make matching contributions of up to one half of the first 6% of each
participant's pre-tax contribution, subject to certain limits. The Retirement
Plan also contains a profit sharing program whereby Genmar Industries, based on
its profits, is permitted to make an annual contribution for the benefit of
eligible employees. Substantially all salaried and hourly employees of Minstar
and Genmar Industries' businesses in the United States are eligible to
participate in the Retirement Plan. Minstar and Genmar Industries' contributions
to the deferred savings program and the profit sharing program are vested over a
five year period.

     Carver has a 401(k) deferred savings plan which allows its eligible
employees to contribute 15% of their pre-tax earnings to the deferred savings
plan. At the discretion of its board of directors, Carver may match a portion of
the employees' contributions. Carver's matching contribution to the deferred
savings plan is currently 25% of employees' contributions, subject to certain
limits. The plan vests over 5 years; employees are eligible to participate after
6 months of full time employment.

     Wood maintains a qualified noncontributory employee benefit plan in which
its employees are eligible to participate following completion of one year of
employment. Wood makes contributions to the plan at the discretion of its board
of directors.

     An indirect subsidiary of the Company, Aegis Corporation, has an agreement
with James B. Farrell which provides that, upon Mr. Farrell's retirement from
the Company after age 65 (or, upon his death prior to such retirement), Aegis
Corporation will pay to Mr. Farrell (or, upon his death, his beneficiary) $3,085
per month for a period of 120 consecutive months. The agreement will terminate,
if, among other things, Mr. Farrell terminates his employment for any reason
prior to age 65.



                                          47
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, to the Company's knowledge, the number of shares
of Company Common Stock that are beneficially owned as of the date of this
Annual Report by (i) each person known by the Company to beneficially own more
than 5% of the issued and outstanding Company Common Stock, (ii) each director
individually and (iii) all executive officers and directors as a group. As of
the date of this Annual Report, there are 1,779,415 shares of Company Common
Stock issued and outstanding, including 42,445 shares owned by Carver.

NAME AND ADDRESS OF BENEFICIAL OWNER          AMOUNT AND NATURE       PERCENT
------------------------------------       OF BENEFICIAL OWNERSHIP    OF CLASS
-------------------------------------------------------------------------------
Group consisting of:                             561,213   (1)           31.5%
Irwin L. Jacobs
Jacobs Industries, Inc.
Jacobs Management Corporation
Watkins, Incorporated
Daniel T. Lindsay
   100 South Fifth Street
   Minneapolis, Minnesota 55402

RDV (AJL) Holdings, Inc.                         436,899   (2)           24.6%
126 Ottawa, N.W.
Grand Rapids, Michigan 49503

Group consisting of:                             298,565   (1)(3)        16.8%
Carl R. Pohlad as Trustee of Revocable
   Trust No. 2
Robert C. Pohlad
William M. Pohlad
James O. Pohlad
PEP Partnership
Jacobs Industries, Inc.
Watkins, Incorporated
   3880 Dain Bosworth Plaza
   60 South Sixth Street
   Minneapolis, Minnesota 55402

State of Wisconsin Investment Board              148,620                  8.4%
   121 East Wilson Street
   Madison, Wisconsin 53702

Investment Cardo AB                              125,165                  7.0%
   Malmo, Sweden

James B. Farrell                                   1,000                   (4)
William A. Munsell                                   500                   (4)
All executive officers and directors             883,313   (2)           49.6%
   as a group


                                          48
<PAGE>

(1) Irwin L. Jacobs beneficially owns approximately 67% of the issued and
outstanding capital shares of JII, while members of the Pohlad Group
beneficially own the remaining shares. Watkins is a wholly-owned subsidiary of
JII. Irwin L. Jacobs, Carl R. Pohlad, as trustee of Revocable Trust No. 2 of
Carl R. Pohlad Created U/A dated 5/28/93, JII, PEP Partnership and Watkins have
entered into an agreement that grants Carl R. Pohlad the effective right to vote
the percentage of shares of Company Common Stock held by JII and Watkins as is
equal to the percentage of equity interest in JII and Watkins held by all
members of the Pohlad Group. Accordingly, of the 246,659 shares of Company
Common Stock owned by JII, ownership of 164,440 shares has been attributed to
Mr. Jacobs and ownership of 82,219 shares has been attributed to the Pohlad
Group. Of the 8,411 shares of Company Common Stock owned by Watkins, ownership
of 5,607 shares has been attributed to Mr. Jacobs and ownership of 2,804 shares
has been attributed to the Pohlad Group.

(2) All of the outstanding shares of RDV are owned by the Richard M. DeVos Trust
dated December 18, 1990 for the benefit of Richard and Helen DeVos, who are also
the Trustees. Daniel DeVos, a director of the Company is the son of Richard and
Helen DeVos. In addition, Jerry Tubergen, a director of the Company, is an
officer of RDV. Each of Mr. Daniel DeVos and Mr. Tubergen has disclaimed
beneficial ownership of the Company Common Stock owned by RDV.

(3) Includes 76,018 shares of Company Common Stock beneficially owned by a
trust, of which Carl R. Pohlad is the trustee.

(4) Less than 1%.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     For a description of other transactions which have occurred since January
1, 1997 to which the Company was or is to be a party and in which directors or
executive officers of the Company or their associates had or are to have a
direct or indirect material interest, see Item 10 under "Compensation Committee
Interlocks and Insider Participation."


                                          49
<PAGE>

                                       PART IV

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

(a) Documents Filed as Part of Form 10-K Report

(1) FINANCIAL STATEMENTS


         See Index to Consolidated Financial Statements and Supplemental
Schedule to Consolidated Financial Statements which appears under Item 8 herein.

(2) SCHEDULE


         See Index to Consolidated Financial Statements and Supplemental
Schedule to Consolidated Financial Statements which appears under Item 8 herein.

         All other schedules are omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.

(3) EXHIBITS


         The exhibits required to be a part of this report are listed in the
Exhibit Index which follows the Financial Statement Schedule and Other Financial
Information included herein.

(b) Reports on Form 8-K

Form 8-K report filed June 10, 1997.

(c) Exhibits are attached hereto.

(d) [Not applicable]


                                          50
<PAGE>

                                      SIGNATURES

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

                                       GENMAR HOLDINGS, INC.


                   October 10, 1997    /S/ Roger R. Cloutier, II
                                       --------------------------
                                       Roger R. Cloutier, II
                                       Executive Vice President and
                                          Chief Financial Officer

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

    SIGNATURE                      TITLE                      DATE
    ---------                      -----                      ----
/S/ Irwin L. Jacobs
------------------------
Irwin L. Jacobs              Chairman and Director         October 10, 1997


/s/ Grant E. Oppegaard
------------------------
Grant E. Oppegaard           Chief Executive Officer       October 10, 1997
                             and President (principal
                             executive officer) and
                             Director

/s/ Roger R. Cloutier, II
------------------------
Roger R. Cloutier, II        Executive Vice President      October 10, 1997
                             and Chief Financial Officer
                             (principal financial and
                             accounting officer)

/s/ Bjorn Ahlstrom
------------------------
Bjorn Ahlstrom               Director                      October 10, 1997

/s/ Daniel G. Devos
------------------------
Daniel G. DeVos              Director                      October 10, 1997

/s/ James B. Farrell
------------------------
James B. Farrell             Director                      October 10, 1997

/s/ Daniel T. Lindsay
------------------------
Daniel T. Lindsay            Director                      October 10, 1997

/s/ Robert B. Mercer
------------------------
Robert B. Mercer             Director                      October 10, 1997

/s/ William W. Nicholson
------------------------
William W. Nicholson         Director                      October 10, 1997


<PAGE>

/s/ Carl R. Pohlad
------------------------
Carl R. Pohlad               Director                      October 10, 1997

/s/ James O. Pohlad
------------------------
James O. Pohlad              Director                      October 10, 1997

/s/ Jerry L.Tubergen
------------------------
Jerry L. Tubergen            Director                      October 10, 1997


<PAGE>

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

    No annual report covering the Company's 1997 fiscal year has been sent to
security holders.

    No proxy statement, form of proxy or other proxy soliciting material has
been sent to the Company's security-holders with respect to any annual or other
meeting of security-holders. However, if the Company does furnish such a report
or proxy material, it will provide such to the Commission at that time.

    The Company does intend to furnish this Annual Report under Form 10-K to
security-holders subsequent to the filing of this Annual Report.


<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION

                                Washington, D.C. 20549


                                      FORM 10-K



                  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)


                        OF THE SECURITIES EXCHANGE ACT OF 1934


                                          OF


                                GENMAR HOLDINGS, INC.


                                         FOR



                          THE SIX MONTHS ENDED JUNE 30, 1997



                        ______________________________________



                                       EXHIBITS



<PAGE>
                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                                   EXHIBIT INDEX TO
                    FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996
                                     (Continued)
                                                                     Page In
Regulation S-K                                                      Sequential
Exhibit Table                                                         Number
 Reference                   Title Of Document                        System
--------------               -----------------                      ----------

 3.1          Certificate of Incorporation of the Company (filed as           *
              Exhibit 3.1 (a) to the Company's Registration Statement on
              Form S-4 (No. 33-82650)).

 3.2          Bylaws of the Company, as Amended (filed as Exhibit 3.2 to      *
              the Company's Annual Report on Form 10-K for the Year
              Ended December 31, 1995.

 4.1          Indenture, dated as of July 1, 1994, among the Company,         *
              the Subsidiary Guarantors and First Trust National
              Association, as Trustee (filed as Exhibit 4.1 to the
              Company's Registration Statement on Form S-4 (No. 33-
              82650)).

 4.2          Specimen Certificates of Notes (filed as Exhibit 4.2 to         *
              the Company's Registration Statement on Form S-4 (No. 33-
              82650)).

 4.3          Registration Rights Agreement, dated July 19, 1994, among       *
              the Company, the Subsidiary Guarantors and Wertheim
              Schroder & Co. Incorporated (filed as Exhibit 4.3 to the
              Company's Registration Statement on Form S-4 (No. 33-
              82650)).

 4.4          Subordination Agreement, dated July 19, 1994, between           *
              Irwin L. Jacobs and First Trust National Association, as
              Trustee (filed as Exhibit 4.4 to the Company's
              Registration Statement on Form S-4 (No. 33-82650)).

 4.5          Consent and Amendment of Subordination Agreement, dated as      *
              of December 29, 1994 (filed as Exhibit 4.5 to the
              Company's Annual Report in Form 10-K for the year ended
              December 31, 1994).

 9.1          Voting Trust Agreement dated as of June 15, 1994 (filed as      *
              Exhibit 9.1 to the Company's Registration Statement on
              Form S-4 (No. 33-82650)).

 10.1         Genmar Holdings, Inc. Stockholders Agreement dated as of        *
              March 31, 1994 (filed as Exhibit 10.7 to the Company's
              Registration Statement on Form S-4 (No. 33-82650).on Form
              S-4 (No. 33-82650)).

 10.2         Voting Agreement, dated as of March 31, 1994, by and among      *
              Irwin L. Jacobs, Carl R. Pohlad, as trustee or Revocable
              Trust No. 2 of Carl R. Pohlad Created U/A dated 5/28/93,
              Jacobs Industries, Incorporated, PEP Partnership and
              Watkins Incorporated (filed as Exhibit 10.8 to the
              Company's Registration Statement on From S-4 (No. 33-
              82650)).

 10.3         Assignment and Assumption Agreement, dated as of March 31,      *
              1994, by and between Jacobs Management Corporation, as
              Assignor and the Company, as Assignee (filed as Exhibit
              10.9 to the Company's Registration Statement on Form S-4
              (No. 33-82650)).


 10.4         Amended and Restated Demand Promissory Note, dated              *
              December 29, 1994, for the Principal amount of $25,000,000
              payable to Irwin L. Jacobs, his successors and assigns.
<PAGE>

                        GENMAR HOLDINGS, INC. AND SUBSIDIARIES
                                   EXHIBIT INDEX TO
                    FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996
                                     (Continued)
                                                                     Page In
Regulation S-K                                                      Sequential
Exhibit Table                                                         Number
 Reference                   Title Of Document                        System
--------------               -----------------                      ----------

 10.5         Subordinated Promissory Note of IJ Holdings, dated              *
              November 24, 1993, for the principal amount of
              $4,104,422.02 payable to Irwin L. Jacobs (filed as Exhibit
              10.11 to the Company's Registration Statement on Form S-4
              (No. 33-82650)).

 10.6         Management Services Agreement, effective as of December 1,      *
              1990, between Jacobs Management Corp. and Minstar, Inc.
              (filed as Exhibit 10.12 to the Company's Registration
              Statement on Form S-4 (No. 33-82650)).

 10.7         Employees' Profit Sharing Plan and Trust for Wood               *
              Manufacturing Company, Inc., as amended January 1, 1989
              (filed as Exhibit 10.13 to the Company's Registration
              Statement on Form S-4 (No. 33-882650)).

 10.8         Deferred Compensation Agreement, dated July 28, 1983,           *
              between Aegis Corporation and James B. Farrell (filed as
              Exhibit 10.21 to the Company's Annual Report on Form 10-K
              for the year ended December 31, 1994).

 10.9         Lease pertaining to property in Highlands County, Florida       *
              between city of Avon Park, as Lessor and Critchfield
              Marine, Inc., as Lessee, together with assignments and
              amendment thereto (filed as Exhibit 10.15 to the Company's
              Registration Statement on Form S-4 (No. 33-82650)).

 10.10        Option Agreement, dated as of January 21, 1997, by and          *
              between the Company, as Purchaser and RDV Corporation
              (filed as Exhibit 10.12 to the Company's Annual Report on
              Form 10-K for the Year Ended December 31, 1996).

 10.11        The Second Amended and Restated Credit Agreement, dated as
              of July 1, 1997, among the Company, the Lenders named
              therein and The Bank of New York, as Agent.

 10.12        Tender Agreement dated as of July 1, 1997, by and between
              the Company, as Purchaser and Merrill Lynch Global
              Allocation Fund, Inc.

 18.1         Letter from the Company's independent public accountants        *
              regarding change in accounting principle (filed as Exhibit
              18.1 to the Company's Annual Report on Form 10-K for the
              Year Ended December 31, 1996).

 21.1         Subsidiaries of the Company (filed as Exhibit 21.1 to the       *
              Company's Annual Report on Form 10-K for the Year Ended
              December 31,1995).

 23.1         Consent of the Company's independent public accountants.