<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934

For the period ended:  April 3, 1999
                                       or

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the period from __________________ to __________________

Commission File Number:  0-22256


                            MONACO COACH CORPORATION

                                                          35-1880244
                Delaware                               (I.R.S. Employer
        (State of Incorporation)                      Identification No.)

                              91320 Industrial Way
                              Coburg, Oregon 97408
                    (Address of principal executive offices)

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

         Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period that the registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days.

YES __X__   NO _____


         The number of shares outstanding of common stock, $.01 par value, as 
of April 3, 1999: 12,498,365

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

<PAGE>

                            MONACO COACH CORPORATION

                                    FORM 10-Q

                                  APRIL 3, 1999

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        Page
PART I - FINANCIAL INFORMATION                                                                        Reference
------------------------------                                                                        ---------
<S>                                                                                                   <C>
   ITEM 1.  FINANCIAL STATEMENTS.

      Condensed Consolidated Balance Sheets as of January 2, 1999 and 
           April 3, 1999.                                                                                 4

      Condensed Consolidated Statements of Income for the quarter ended 
           April 4, 1998 and April 3, 1999.                                                               5

      Condensed Consolidated Statements of Cash Flows for the quarter
           ended April 4, 1998 and April 3, 1999.                                                         6

      Notes to Condensed Consolidated Financial Statements.                                             7 - 8

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
                     AND RESULTS OF OPERATIONS.                                                         9 - 15

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                                  15


PART II - OTHER INFORMATION

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.                                                            16

   SIGNATURES                                                                                            17
</TABLE>

                                                                               2

<PAGE>







                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS












                                                                               3


<PAGE>

                            MONACO COACH CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (UNAUDITED: DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   JANUARY 2,         APRIL 3,
                                                                                      1999              1999
                                                                                 ----------------  ----------------
<S>                                                                             <C>                <C>
ASSETS
Current assets:
   Trade receivables, net                                                        $        36,073   $        43,981
   Inventories                                                                            59,566            65,221
   Prepaid expenses                                                                          143
   Deferred income taxes                                                                  10,978            11,480
   Notes receivable                                                                          141               722
                                                                                 ----------------  ----------------
            Total current assets                                                         106,901           121,404

Notes receivable, less current portion                                                       769
Property, plant and equipment, net                                                        61,655            69,323
Debt issuance costs, net of accumulated amortization
     of $1,184 and $1,930, respectively                                                      929               183
Goodwill, net of accumulated amortization of $3,384
     and $3,546, respectively                                                             19,873            19,711
                                                                                 ----------------  ----------------
            Total assets                                                         $       190,127   $       210,621
                                                                                 ----------------  ----------------
                                                                                 ----------------  ----------------

LIABILITIES
Current liabilities:
   Book overdraft                                                                $        10,519   $        10,695
   Line of credit                                                                          1,640
   Current portion of long-term note payable                                               5,000
   Accounts payable                                                                       28,498            43,946
   Income taxes payable                                                                    4,149             8,779
   Accrued expenses and other liabilities                                                 33,419            35,686
                                                                                 ----------------  ----------------
            Total current liabilities                                                     83,225            99,106

Note payable, less current portion                                                         5,400
Deferred income tax liability                                                              3,309             3,396
                                                                                 ----------------  ----------------
                                                                                          91,934           102,502
                                                                                 ----------------  ----------------

Commitments and contingencies (Note 6)

STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 20,000,000 shares
     authorized, 12,481,095 and 12,498,365 issued
     and outstanding respectively                                                            125               125
Additional paid-in capital                                                                44,947            44,995
Retained earnings                                                                         53,121            62,999
                                                                                 ----------------  ----------------
            Total stockholders' equity                                                    98,193           108,119
                                                                                 ----------------  ----------------
            Total liabilities and stockholders' equity                           $       190,127   $       210,621
                                                                                 ----------------  ----------------
                                                                                 ----------------  ----------------
</TABLE>


See accompanying notes.


                                                                               4
<PAGE>

                            MONACO COACH CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
       (UNAUDITED: DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                          QUARTER ENDED
                                                                                 --------------------------------
                                                                                    APRIL 4,         APRIL 3,
                                                                                      1998             1999
                                                                                 ---------------  ---------------
<S>                                                                              <C>              <C>
Net sales                                                                        $      137,176   $      193,201
Cost of sales                                                                           118,823          164,154
                                                                                 ---------------  ---------------
            Gross profit                                                                 18,353           29,047

Selling, general and administrative expenses                                             10,572           11,586
Amortization of goodwill                                                                    165              161
                                                                                 ---------------  ---------------
            Operating income                                                              7,616           17,300

Other income, net                                                                            56                9
Interest expense                                                                           (503)            (983)
                                                                                 ---------------  ---------------
            Income before income taxes                                                    7,169           16,326

Provision for income taxes                                                                2,976            6,448
                                                                                 ---------------  ---------------

            Net income                                                           $        4,193   $        9,878
                                                                                 ---------------  ---------------
                                                                                 ---------------  ---------------

Earnings per common share:
            Basic                                                                         $ .34            $ .79
            Diluted                                                                       $ .33            $ .77

Weighted average common shares outstanding:
            Basic                                                                    12,380,892       12,491,385
            Diluted                                                                  12,684,000       12,857,142
</TABLE>


See accompanying notes.


                                                                               5

<PAGE>

                            MONACO COACH CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (UNAUDITED: DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                            QUARTER ENDED
                                                                                   --------------------------------
                                                                                      APRIL 4,         APRIL 3,
                                                                                        1998             1999
                                                                                   ---------------  ---------------
<S>                                                                                <C>              <C>
INCREASE (DECREASE) IN CASH:

Cash flows from operating activities:
   Net income                                                                      $        4,193   $        9,878
   Adjustments to reconcile net income to net cash
        provided (used) by operating activities:
      Depreciation and amortization                                                         1,109            1,843
      Deferred income taxes                                                                  (704)            (415)
      Changes in working capital accounts:
         Trade receivables, net                                                           (13,677)          (7,908)
         Inventories                                                                       (5,569)          (5,655)
         Prepaid expenses                                                                     512              143
         Accounts payable                                                                  14,456           15,448
         Income taxes payable                                                               2,732            4,630
         Accrued expenses and other liabilities                                             1,310            2,267
                                                                                   ---------------  ---------------
            Net cash provided by operating activities                                       4,362           20,231
                                                                                   ---------------  ---------------
Cash flows from investing activities:
   Additions to property, plant and equipment                                              (3,554)          (8,603)
   Proceeds from collections on notes receivable                                            1,032              188
                                                                                   ---------------  ---------------
            Net cash used in investing activities                                          (2,522)          (8,415)
                                                                                   ---------------  ---------------
Cash flows from financing activities:
   Book overdraft                                                                           1,403              176
   Borrowings (payments) on lines of credit, net                                           (2,796)          (1,640)
   Payments on long-term note payable                                                        (625)         (10,400)
   Issuance of common stock                                                                   178               48
                                                                                   ---------------  ---------------
            Net cash used in financing activities                                          (1,840)         (11,816)
                                                                                   ---------------  ---------------
Net change in cash                                                                              0                0
Cash at beginning of period                                                                     0                0
                                                                                   ---------------  ---------------
Cash at end of period                                                              $            0   $            0
                                                                                   ---------------  ---------------
                                                                                   ---------------  ---------------
</TABLE>


See accompanying notes.


                                                                               6
<PAGE>

                            MONACO COACH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     The interim condensed consolidated financial statements have been prepared
     by Monaco Coach Corporation (the "Company") without audit. In the opinion
     of management, the accompanying unaudited financial statements contain all
     adjustments necessary, consisting only of normal recurring adjustments, to
     present fairly the financial position of the Company as of January 2, 1999
     and April 3, 1999, and the results of its operations and its cash flows for
     the quarters ended April 4, 1998 and April 3, 1999. The condensed
     consolidated financial statements include the accounts of the Company and
     its wholly-owned subsidiaries, and all significant intercompany accounts
     and transactions have been eliminated in consolidation. The balance sheet
     data as of January 2, 1999 was derived from audited financial statements,
     but does not include all disclosures contained in the Company's Annual
     Report to Stockholders. These interim condensed consolidated financial
     statements should be read in conjunction with the audited financial
     statements and notes thereto appearing in the Company's Annual Report to
     Stockholders for the year ended January 2, 1999.

2.   INVENTORIES

     Inventories are stated at lower of cost (first-in, first-out) or market.
     The composition of inventory is as follows:
<TABLE>
<CAPTION>
                                                                                          (IN THOUSANDS)
                                                                                   JANUARY 2,         APRIL 3,
                                                                                      1999              1999
                                                                                 ---------------   ---------------
<S>                                                                              <C>               <C>
         Raw materials                                                           $        34,207   $        32,038
         Work-in-process                                                                  21,299            23,180
         Finished units                                                                    4,060            10,003
                                                                                 ---------------   ---------------
                                                                                 $        59,566   $        65,221
                                                                                 ---------------   ---------------
                                                                                 ---------------   ---------------
</TABLE>

3.   GOODWILL

     Goodwill, which represents the excess of the cost of acquisition over the
     fair value of net assets acquired, is being amortized on a straight-line
     basis over 20 and 40 years. Management assesses whether there has been
     permanent impairment in the value of goodwill and the amount of such
     impairment by comparing anticipated undiscounted future cash flows from
     operating activities with the carrying value of the goodwill. The factors
     considered by management in performing this assessment include current
     operating results, trends and prospects, as well as the effects of
     obsolescence, demand, competition and other economic factors.

4.   LINE OF CREDIT

     The Company has a bank line of credit consisting of a revolving line of
     credit of up to $20.0 million, with interest payable monthly at varying
     rates based on the Company's interest coverage ratio and interest payable
     monthly on the unused available portion of the line at 0.375%. There were
     no outstanding borrowings under the line of credit at April 3, 1999. The
     revolving line of credit expires March 1, 2001 and is collateralized by all
     the assets of the Company.


                                                                               7

<PAGE>

5.   EARNINGS PER COMMON SHARE

     Basic earnings per common share is based on the weighted average number of
     shares outstanding during the period. Diluted earnings per common share is
     based on the weighted average number of shares outstanding during the
     period, after consideration of the dilutive effect of stock options. The
     weighted average number of common shares used in the computation of
     earnings per common share are as follows:

<TABLE>
<CAPTION>
                                                                       APRIL 4,          APRIL 3,
                                                                       1998               1999
                                                                   ------------      ------------
<S>                                                                <C>               <C>
          BASIC
          Issued and outstanding shares (weighted average)           12,380,892        12,491,385

          EFFECT OF DILUTIVE SECURITIES
          Stock Options                                                 303,108           365,757
                                                                   ------------      ------------
          DILUTED                                                    12,684,000        12,857,142
                                                                   ------------      ------------
                                                                   ------------      ------------
</TABLE>



6.   COMMITMENTS AND CONTINGENCIES

     REPURCHASE AGREEMENTS

     Substantially all of the Company's sales to independent dealers are made on
     terms requiring cash on delivery. However, most dealers finance units on a
     "floor plan" basis with a bank or finance company lending the dealer all or
     substantially all of the wholesale purchase price and retaining a security
     interest in the vehicles. Upon request of a lending institution financing a
     dealer's purchases of the Company's product, the Company will execute a
     repurchase agreement. These agreements provide that, for up to 18 months
     after a unit is shipped, the Company will repurchase its products from the
     financing institution in the event that they have repossessed them upon a
     dealer's default. The risk of loss resulting from these agreements is
     further reduced by the resale value of the products repurchased.


     LITIGATION

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


                                                                               8
<PAGE>

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements within 
the meaning of Section 27A of the Securities Act of 1933, as amended, and 
Section 21E of the Securities Exchange Act of 1934, as amended. These 
statements include those below that have been marked with an asterisk (*). In 
addition, the Company may from time to time make forward-looking statements 
through statements that include the words "believes", "expects", 
"anticipates" or similar expressions. Such forward-looking statements involve 
known and unknown risks, uncertainties and other factors that may cause 
actual results, performance or achievements of the Company to differ 
materially from those expressed or implied by such forward-looking 
statements, including those set forth below under the caption "Factors That 
May Affect Future Operating Results" and elsewhere in this Quarterly Report 
on Form 10-Q. The reader should carefully consider, together with the other 
matters referred to herein, the factors set forth under the caption "Factors 
That May Affect Future Operating Results". The Company cautions the reader, 
however, that these factors may not be exhaustive.

GENERAL

Monaco Coach Corporation is a leading manufacturer of premium Class A motor 
coaches and towable recreational vehicles ("towables"). The Company's product 
line currently consists of a broad line of motor coaches, fifth wheel 
trailers and travel trailers under the "Monaco", "Holiday Rambler", and 
"McKenzie Towables" brand names. The Company's products, which are typically 
priced at the high end of their respective product categories, range in 
suggested retail price from $65,000 to $900,000 for motor coaches and from 
$15,000 to $70,000 for towables.

RESULTS OF OPERATIONS

QUARTER ENDED APRIL 3, 1999 COMPARED TO QUARTER ENDED APRIL 4, 1998

First quarter net sales increased 40.8% from $137.2 million in 1998 to $193.2 
million in 1999. Gross sales dollars on motorized products were up 44.1% 
reflecting strong demand for the Company's motorized products combined with 
higher production rates in both the Coburg, Oregon and Wakarusa, Indiana 
motorized plants. The Company's gross towable sales were up 16.2% as a result 
of the ramp-up of the expanded and remodeled Indiana towable facility as well 
as increased demand for our McKenzie Towable models produced in our 
Springfield, Oregon facility. The Company's overall unit sales were up 44.3% 
in the first quarter of 1999 with motorized and towable unit sales being up 
52.4% and 30.2% respectively. Even with the Company's recent successful 
introduction of two less expensive gasoline motor coach models the Company's 
average unit selling price declined just slightly in the first quarter of 
1999 to $82,000 from $84,000 in the first quarter of 1998 reflecting the 
continued strong overall showing of the Company's motorized products.

Gross profit increased $10.6 million from $18.4 million in the first quarter 
of 1998 to $29.0 million in the first quarter of 1999 and gross margin 
increased from 13.4% in the first quarter of 1998 to 15.0% in the first 
quarter of 1999. In the first quarter of 1999 gross margin benefited from a 
strong mix of motorized products along with manufacturing efficiencies 
created from an increase in production volume in all of the Company's 
manufacturing plants. Gross margin in 1998 was dampened by lower gross 
margins in the three towable plants due to reduced production volumes in 
those plants. The Company consolidated its two Indiana-based towable plants 
into one Company-owned facility in Elkhart, Indiana in July of 1998 and 
expanded this facility in the second half of 1998. The Company's overall 
gross margin may fluctuate in future periods if the mix of products shifts 
from higher to lower gross margin units or if the Company encounters 
unexpected manufacturing difficulties or competitive pressures.

Selling, general, and administrative expenses increased by $1.0 million from 
$10.6 million in the first quarter of 1998 to $11.6 million in the first 
quarter of 1999 and decreased as a percentage of sales from 7.7% in 1998 to 
6.0% in 1999. Selling, general and administrative expenses benefited in the 
first quarter of 1999 from a $1.75 million adjustment in the estimated 
accrual for 1998 incentive based compensation. Without this benefit selling, 
general and administrative expenses in the first quarter of 1999 would have 
increased by $2.8 million to $13.3 million or 6.9% of sales, still 
significantly less than the 7.7% in the first quarter of 1998. The decrease 
in selling, general and administrative expenses as a percentage of sales 
reflects efficiencies arising from the Company's increased sales level.


                                                                               9

<PAGE>

Amortization of goodwill was $161,000 in the first quarter of 1999 compared 
to $165,000 in the same period of 1998. At April 3, 1999, goodwill, net of 
accumulated amortization, was $19.7 million.

Operating income was $17.3 million in the first quarter of 1999 compared to 
$7.6 million in the similar 1998 period. The Company's increase in gross 
margin combined with the reduction of selling, general and administrative 
expenses as a percentage of net sales, resulted in an increase in operating 
margin from 5.6% in the first quarter of 1998 to 9.0% in the first quarter of 
1999. The Company's operating margin in the first quarter of 1999 was 
positively affected by the $1.75 million adjustment of incentive based 
compensation accrued for 1998. Without this benefit operating margin in the 
first quarter of 1999 would have been 8.1%.

Net interest expense was $983,000 in the first quarter of 1999 compared to 
$503,000 in the comparable 1998 period. The Company capitalized $44,000 of 
interest expense in 1998 relating to the construction in progress in Indiana. 
First quarter interest expense in both years also included $103,000 related 
to the amortization of $2.1 million in debt issuance costs recorded in 
conjunction with the Company's credit facilities. Additionally, interest 
expense in the first quarter of 1999 included $639,000 from accelerated 
amortization of debt issuance costs related to the credit facilities. The 
Company paid off its long term debt of approximately $10 million at the end 
of the first quarter of 1999 and also reduced the amount of availability on 
its revolving line of credit. The Company had no borrowings outstanding on 
the revolver at quarter end. See "Liquidity and Capital Resources".

The Company reported a provision for income taxes of $3.0 million, or an 
effective tax rate of 41.5%, for the first quarter of 1998 compared to $6.4 
million, or an effective tax rate of 39.5% for the comparable 1999 period.

Net income increased by $5.7 million, from $4.2 million in the first quarter 
of 1998 to $9.9 million in the first quarter of 1999 due to the benefit of 
the increases in sales and operating margin being greater than the increase 
in interest expense.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are internally generated cash from 
operations and available borrowings under its credit facilities. During the 
first three months of 1999, the Company had cash flow of $20.2 million from 
operating activities. The Company generated $11.7 million from net income and 
non-cash expenses such as depreciation and amortization. The balance of 
operating cash flow resulted from increases in accounts payable and other 
accrued liabilities which more than offset the increases in the levels of 
accounts receivable and inventory.

At the end of 1998 the Company had credit facilities consisting of a term 
loan of $20.0 million (the "Term Loan") and a revolving line of credit of up 
to $45.0 million ( the "Revolving Loans"). The Term Loan bore interest at 
various rates based upon the prime lending rate announced from time to time 
by Banker's Trust Company (the "Prime Rate") or Eurodollar and was due and 
payable in full on March 1, 2001. At the end of the first quarter of 1999 the 
Company paid off the remaining balance on the Term Loan, $10.4 million, 
without penalty. Additionally, at the end of the first quarter of 1999, the 
Company elected to reduce the availability on its Revolving Loans from $45 
million to $20 million. At the election of the Company, the Revolving Loans 
bear interest at variable interest rates based on the Prime Rate or 
Eurodollar. The Revolving Loans are due and payable in full on March 1, 2001, 
and require monthly interest payments. As of April 3, 1999, there were no 
outstanding borrowings under the Revolving Loans. The Revolving Loans are 
collateralized by a security interest in all of the assets of the Company and 
include various restrictions and financial covenants. The Company utilizes 
"zero balance" bank disbursement accounts in which an advance on the line of 
credit is automatically made for checks clearing each day. Since the balance 
of the disbursement account at the bank returns to zero at the end of each 
day, the outstanding checks of the Company are reflected as a liability. The 
outstanding check liability is combined with the Company's positive cash 
balance accounts to reflect a net book overdraft or a net cash balance for 
financial reporting.

The Company's principal working capital requirements are for purchases of 
inventory and, to a lesser extent, financing of trade receivables. The 
Company's dealers typically finance product purchases under wholesale floor 
plan arrangements with third parties as described below. At April 3, 1999, 
the Company had working capital of approximately $22.3 million, a decrease of 
$1.4 million from working capital of $23.7 million at January 2, 1999. The 
Company has been using its short-term credit facilities and operating cash 
flows to finance its construction of facilities and other capital 
expenditures.


                                                                            10

<PAGE>

The Company believes that cash flow from operations and funds available under 
its credit facilities will be sufficient to meet the Company's liquidity 
requirements for the next 12 months.* The Company's capital expenditures were 
$8.6 million in the first quarter of 1999, primarily for the acquisition of 
the new Coburg property and initial construction costs for the new Coburg 
manufacturing facilities. The Company anticipates that capital expenditures 
for all of 1999 will total approximately $20.0 to $25.0 million, of which an 
estimated $15 to $18 million is expected to be used to further expand its 
existing Coburg, Oregon manufacturing facilities.* The Company's remaining 
capital expenditures are expected to be for computer system upgrades and 
various smaller-scale plant expansion or remodeling projects as well as 
normal replacement of outdated or worn-out equipment.* The Company may 
require additional equity or debt financing to address working capital and 
facilities expansion needs, particularly if the Company further expands its 
operations to address greater than anticipated growth in the market for its 
products. The Company may also from time to time seek to acquire businesses 
that would complement the Company's current business, and any such 
acquisition could require additional financing. There can be no assurance 
that additional financing will be available if required or on terms deemed 
favorable by the Company.

As is typical in the recreational vehicle industry, many of the Company's 
retail dealers utilize wholesale floor plan financing arrangements with third 
party lending institutions to finance their purchases of the Company's 
products. Under the terms of these floor plan arrangements, institutional 
lenders customarily require the recreational vehicle manufacturer to agree to 
repurchase any unsold units if the dealer fails to meet its commitments to 
the lender, subject to certain conditions. The Company has agreements with 
several institutional lenders under which the Company currently has 
repurchase obligations. The Company's contingent obligations under these 
repurchase agreements are reduced by the proceeds received upon the sale of 
any repurchased units. The Company's obligations under these repurchase 
agreements vary from period to period. At April 3, 1999, approximately $254.7 
million of products sold by the Company to independent dealers were subject 
to potential repurchase under existing floor plan financing agreements with 
approximately 7.4% concentrated with one dealer. If the Company were 
obligated to repurchase a significant number of units under any repurchase 
agreement, its business, operating results and financial condition could be 
adversely affected.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

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

CYCLICALITY The recreational vehicle industry has been characterized by 
cycles of growth and contraction in consumer demand, reflecting prevailing 
economic, demographic and political conditions that affect disposable income 
for leisure-time activities. Unit sales of recreational vehicles (excluding 
conversion vehicles) reached a peak of approximately 259,000 units in 1994 
and declined to approximately 247,000 units in 1996. Although unit sales of 
High-Line Class A motor coaches have increased in each year since 1989, there 
can be no assurance that this trend will continue. Furthermore, the Company 
now offers a much broader range of recreational vehicle products and will 
likely be more susceptible to recreational vehicle industry cyclicality than 
in the past. Factors affecting cyclicality in the recreational vehicle 
industry include fuel availability and fuel prices, prevailing interest 
rates, the level of discretionary spending, the availability of credit and 
overall consumer confidence. In particular, a decline in consumer confidence 
and/or a slowing of the overall economy has had a material adverse effect on 
the recreational vehicle market in the past. Recurrence of these conditions 
could have a material adverse effect on the Company's business, results of 
operations and financial condition.


                                                                              11

<PAGE>

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

MANUFACTURING EXPANSION The Company has significantly increased its 
manufacturing capacity over the last few years and recently announced plans 
for additional expansion of manufacturing facilities. In 1999 the Company 
plans to greatly expand its existing Coburg, Oregon motorized facilities. The 
integration of the Company's facilities and the expansion of the Company's 
manufacturing operations involve a number of risks including unexpected 
building and production difficulties. In the past the Company experienced 
startup inefficiencies in manufacturing a new model and also has experienced 
difficulty in increasing production rates at a plant. There can be no 
assurance that the Company will successfully integrate its manufacturing 
facilities or that it will achieve the anticipated benefits and efficiencies 
from its expanded manufacturing operations. In addition, the Company's 
operating results could be materially and adversely affected if sales of the 
Company's products do not increase at a rate sufficient to offset the 
Company's increased expense levels resulting from this expansion.

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

CONCENTRATION OF SALES TO CERTAIN DEALERS Although the Company's products 
were offered by 263 dealerships located primarily in the United States and 
Canada at the end of 1998, a significant percentage of the Company's sales 
have been and will continue to be concentrated among a relatively small 
number of independent dealers. Although no single dealer accounted for as 
much as 10% of the Company's net sales in 1998, the top two dealers accounted 
for approximately 14% of the Company's net sales in that period. The loss of 
a significant dealer or a substantial decrease in sales by such a dealer 
could have a material adverse effect on the Company's business, results of 
operations and financial condition.

POTENTIAL LIABILITY UNDER REPURCHASE AGREEMENTS As is common in the 
recreational vehicle industry, the Company enters into repurchase agreements 
with the financing institutions used by its dealers to finance their 
purchases. These agreements obligate the Company to repurchase a dealer's 
inventory under certain circumstances in the event of a default by the dealer 
to its lender. The Company's contingent obligations under these repurchase 
agreements are reduced by the proceeds received upon the sale of any 
repurchased units. If the Company were obligated to repurchase a significant 
number of its products in the future, it could have a material adverse effect 
on the Company's financial condition, business and results of operations. The 
Company's contingent obligations under repurchase agreements vary from period 
to period and totaled approximately $254.7 million as of April 3, 1999, with 
approximately 7.4% concentrated with one dealer. See "Liquidity and Capital 
Resources" and Note 6 of Notes to the Company's Condensed Consolidated 
Financial Statements.

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


                                                                              12

<PAGE>

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

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

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

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

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

IMPACT OF THE YEAR 2000 ISSUE

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

The Company has identified its Year 2000 risk in four categories: internal 
computer hardware infrastructure, application software (including a 
combination of "canned" software applications and internally written or 
modified applications for both financial and non-financial uses), imbedded 
chip technology, and third-party suppliers and customers.


                                                                              13

<PAGE>

The Company's Year 2000 risk project phases consist of assessment of 
potential year 2000 related problems, development of strategies to mitigate 
those problems, remediation of the affected systems, and internal 
certification that the process is complete through documentation and testing 
of remediation efforts. None of the Company's other information technology 
(IT) projects has been delayed due to the implementation of its Year 2000 
project.

INTERNAL COMPUTER HARDWARE INFRASTRUCTURE

During the Company's acquisition of Holiday Rambler in 1996, the Company 
decided not to purchase the existing hardware or software that was being used 
by that operation. Instead, the Company decided to convert the operation to a 
client/server based hardware configuration which is Year 2000 compliant. 
Following the conversion in the Wakarusa facilities to the new hardware 
configurations during 1996, the Company has continued to upgrade the hardware 
infrastructure at all other Company facilities in Indiana and Oregon. The 
upgrading of computer hardware is on schedule and the Company estimates that 
more than 90 percent of these upgrades had been completed by April 3, 1999. 
The certification and testing phase is ongoing as affected components are 
remediated and upgraded. Substantially all hardware infrastructure activities 
are expected to be completed by the end of the second quarter of 1999.*

APPLICATION SOFTWARE

As part of the system conversion in Wakarusa in 1996, the Company decided to 
convert company-wide to a fully integrated financial and manufacturing 
software application. This Software implementation, which is expected to make 
approximately 90 percent of the Company's business application software Year 
2000 compliant, is scheduled for company-wide implementation by the end of 
the second quarter of 1999.* Other application software that the Company uses 
is in the remediation phase which is being accomplished through vendor 
software replacements or upgrades. These application upgrades are expected to 
be completed by the end of the second quarter of 1999, except for the Oregon 
payroll processing software upgrades which are expected to be completed by 
the middle of the third quarter of 1999.* The certification and testing phase 
of all application software is ongoing and is expected to be complete in the 
third quarter of 1999.*

IMBEDDED CHIP TECHNOLOGY

The Year 2000 risk also exists among other types of machinery and equipment 
that use imbedded computer chips or processors. For example: phone systems, 
security alarm systems, or other diagnostic equipment may contain computer 
chips that rely on date information to function properly. The Company began 
the assessment phase of this category during the fourth quarter of 1998. The 
Company does not expect that a significant amount of equipment used by the 
Company will be found to have Year 2000 problems that will require extensive 
remediation efforts or contingency plans.* All phases of this category are 
scheduled to be completed in the third quarter of 1999.*

THIRD-PARTY SUPPLIERS AND CUSTOMERS

The third-party suppliers and customers category includes completing all 
phases of the Year 2000 project using a prioritized list of third-parties 
most critical to the Company's operations and communicating with them about 
their plans and progress toward addressing the Year 2000 problem. The most 
significant third-party relationships and dependencies exist with financial 
institutions, along with suppliers of materials, communication services, 
utilities, and supplies. The Company is currently behind the original 
schedule within this category and is assessing the most critical 
third-parties' state of readiness for Year 2000. These assessments will be 
followed by development of strategies and contingency plans, with completion 
scheduled for mid-1999.* Less critical third-party dependencies will be in 
the assessment phase in the second and third quarters of 1999 with 
contingency planning scheduled for completion by the latter part of 1999.*

COSTS

From the time the Company began its hardware infrastructure and application 
software upgrades in 1996, the Company has spent approximately $1,150,000 
through April 3, 1999 and expects to spend a total of approximately $200,000 
in the future to complete upgrades in these categories.* No significant costs 
have been incurred in the categories of imbedded chip technology and 
third-party suppliers and customers. Total future costs related to these two 
categories are estimated to be less than $200,000.*


                                                                              14

<PAGE>

RISKS

Although the Company expects its Year 2000 project to reduce the risk of 
business interruptions due to the Year 2000 problem, there can be no 
assurance that these results will be achieved. Failure to correct a Year 2000 
problem could result in an interruption in, or failure of, certain normal 
business activities or operations. Factors that give rise to uncertainty 
include failure to identify all susceptible systems, failure by third parties 
to address the Year 2000 problem whose systems or products, directly or 
indirectly, are depended on by the Company, loss of personnel resources 
within the Company to complete the Year 2000 project, or other similar 
uncertainties. Based on an assessment of the Company's current state of 
readiness with respect to the Year 2000 problem, the Company believes that 
the most reasonably likely worst case scenario would involve the 
noncompliance of one or more of the Company's third-party financial 
institutions or key suppliers.* Such an event could result in a material 
disruption to the Company's operations. Specifically, the Company could 
experience an interruption in its ability to collect funds from dealer 
finance companies, process payments to suppliers, and receive key material 
components from suppliers thus slowing or interrupting the production 
process. If this were to occur it could, depending on its duration, have a 
material impact on the Company's business, results of operations, financial 
condition and cash flows.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.







                                                                              15

<PAGE>

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         27.1  Financial data schedule.

     (b) Reports on Form 8-K

         No reports on Form 8-K were required to be filed during the
         quarter ended April 3, 1999, for which this report is filed.





                                                                              16

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                   MONACO COACH CORPORATION



Dated: MAY 18, 1999                /s/:  John W. Nepute
                                   ----------------------------------
                                   John W. Nepute
                                   Vice President of Finance and
                                   Chief Financial Officer (Duly
                                   Authorized Officer and Principal
                                   Financial Officer)












                                                                              17