FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934.

For the quarterly period ended June 30, 1998

{ } TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934.
For the transition period from ........ to .........

Commission file number: 0-22268

                          NATIONAL R.V. HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

              Delaware                                   33-0371079
   (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                    Identification No.)

                              3411 N. Perris Blvd.
                            Perris, California 92571
                                  (909) 943-6007
               (Address,  including zip code, and telephone number,
                including  area code, of  Registrant's  principal
                executive offices)

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

YES X    NO__

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

Class                                       Outstanding at August 4, 1998
-----                                       -----------------------------
Common stock, par value                              10,183,342
$.01 per share

This Amendment No. 1 on Form 10-Q/A is being filed soley to reflect the change
on the Balance Sheet in authorized shares from 10,000,000 to 25,000,000 as
approved at the May 29, 1998 Annual Meeting of Stockholders.

                                      1                                        
<PAGE>

                          NATIONAL R.V. HOLDINGS, INC.

                                      INDEX

                                                                       PAGE
                             PART 1 - FINANCIAL INFORMATION

Item 1.    Consolidated Balance Sheet -
           June 30, 1998 and December 31, 1997                           3

           Consolidated Statement of Income -
           Three and Six Months Ended June 30, 1998 and 1997             4

           Consolidated Statement of Cash Flows -
           Six Months Ended June 30, 1998 and 1997                       5

           Consolidated Statement of Changes in Stockholders' Equity     6

           Notes to Consolidated Financial Statements                    7

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations               8 - 10

                               PART II - OTHER INFORMATION

Item 4.    Submission of Matters to a Vote of Security Holders           11

Item 6.    Exhibits and Reports on Form 8-K                              11

           Signature                                                     12

                                      2  
<PAGE>

                                   NATIONAL R.V. HOLDINGS, INC.
                                    CONSOLIDATED BALANCE SHEET
                                          (In thousands)
                                            (Unaudited)
<TABLE>
<CAPTION>
                                                                        June 30,        December 31,
                                                                          1998              1997
      ASSETS
Current Assets:
<S>                                                                   <C>                 <C>
     Cash                                                             $   7,711           $  3,542
     Trade receivables, less allowance for    
       doubtful accounts of $180,000                                     18,111              11,388
     Inventories                                                         41,074              37,543
     Deferred income taxes                                                3,496               2,741
     Prepaid expenses                                                     1,206               1,375
                                                                      ----------           --------
         Total current assets                                            71,598              56,589
Goodwill                                                                  7,572               7,778
Property, plant and equipment, net                                       21,595              19,817
Other                                                                     3,217               3,020
                                                                      ----------           --------
                                                                      $ 103,982            $ 87,204
                                                                      ==========           =========
                                            
               LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
     Current portion of long-term debt                                    $ 255               $ 554
     Accounts payable                                                    15,854               9,006
     Accrued expenses                                                     8,279               7,758
                                                                      ----------           --------
         Total current liabilities                                       24,388              17,318
Deferred income taxes                                                     2,079               2,225
Long-term debt                                                            1,694               6,703
Commitments and contingencies
Stockholders' equity:
     Preferred stock - $.01 par value; 5,000 shares
         authorized, 4,000 issued and outstanding                             -                   -
     Common stock - $.01 par value; 25,000,000 shares
         authorized                                                         100                  63
Additional paid-in capital                                               39,344              35,263
Accumulated earnings                                                     36,377              25,632
                                                                      ----------           --------
     Total stockholders' equity                                          75,821              60,958
                                                                      ----------           --------
                                                                      $ 103,982            $ 87,204
                                                                      ==========           =========
</TABLE>

                             See Notes to Consolidated Financial Statements

                                      3
<PAGE>

                                   NATIONAL R.V. HOLDINGS, INC.
                                 CONSOLIDATED STATEMENT OF INCOME
                               (In thousands except per share data)
                                           (Unaudited)
<TABLE>
<CAPTION>

                                                          Three Months                      Six Months
                                                         Ended June 30,                   Ended June 30,
                                                      1998              1997           1998              1997
<S>                                                <C>                 <C>         <C>                 <C>
Net sales                                          $ 90,873            $ 69,191    $ 171,159           $ 127,787
Cost of goods sold                                   76,575              60,084      144,472             111,077
                                                   --------            --------    ---------           ---------
         Gross profit                                14,298               9,107       26,687              16,710
Selling expenses                                      2,487               2,110        5,275               4,227
General and administrative expenses                   1,600               1,522        3,026               2,783
Amortization of intangibles                             104                 104          207                 207
                                                   --------            --------    ---------           ---------
         Operating income                            10,107               5,371       18,179               9,493
Other expense (income):
     Interest expense                                    41                 101          105                 150
     Interest income                                    (89)                (37)        (159)                (70)
     Other financing related costs                      215                  42          223                  61
                                                   --------            --------    ---------           ---------
         Income before income taxes                   9,940               5,265       18,010               9,352
     Provision for income taxes                       4,172               2,146        7,265               3,844
                                                   --------            --------    ---------           ---------
Net income                                          $ 5,768             $ 3,119     $ 10,745             $ 5,508
Earnings per common share:
     Basic                                          $  0.59             $  0.33     $   1.10             $  0.59
     Diluted                                        $  0.51             $  0.31     $   0.95             $  0.55
Weighted average number of shares:
     Basic                                            9,827               9,357        9,734               9,353
     Diluted                                         11,412              10,100       11,364              10,086

</TABLE>
                             See Notes to Consolidated Financial Statements

                                      4 
<PAGE>

                                   NATIONAL R.V. HOLDINGS, INC.
                               CONSOLIDATED STATEMENT OF CASH FLOWS
                                         (In thousands)
                                          (Unaudited)
<TABLE>
<CAPTION>

                                                                              Six Months
                                                                            Ended June 30,
                                                                       1998              1997
 Cash flows from operating activities:
<S>                                                                    <C>                  <C>
      Net income                                                       $ 10,745             $ 5,508
      Adjustments to reconcile net income to net cash provided
          by operating activities:
              Depreciation expense                                          865                 584
              Amortization of intangibles                                   206                 206
              Increase in trade receivables                              (6,723)             (3,566)
              Increase in inventories                                    (3,531)             (1,976)
              Decrease (Increase) in prepaid expenses                       169                (193)
              Increase in accounts payable                                6,848               1,916
              Increase in accrued expenses                                  521               1,812
              Increase in deferred income taxes                            (901)               (281)
                                                                       ---------            -------
                Net cash provided by operating activities                 8,199               4,010
 Cash flows from investing activities:
      Purchases of property, plant and equipment                         (2,643)             (3,780)
                                                                       ---------            -------
                Net cash used by investing activities                    (2,643)             (3,780)
 Cash flows from financing activities:
      Net payments under line of credit                                                      (1,400)
      Increase in other assets                                             (197)               (135)
      Decrease in restricted funds                                                            1,210
      Principal payments on long-term debt                               (5,308)               (142)
      Proceeds from issuance of common stock                              4,117                 309
      Purchase of treasury stock
                                                                       ---------            -------
                Net cash (used) provided  by financing activities        (1,388)               (158)
                                                                       ---------            -------
 Net increase in cash                                                     4,168                  72
 Cash beginning of period                                                 3,542                 819
                                                                       ---------            -------
 Cash end of period                                                    $  7,710             $   891

</TABLE>
                             See Notes to Consolidated Financial Statements

                                      5 
<PAGE>
                                   NATIONAL R.V. HOLDINGS, INC.
                 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (In thousands except shares)
                                          (Unaudited)
<TABLE>
<CAPTION>

                                    Preferred      Common Stock         Paid-in     Accumulated
                                      Stock      Shares      Amount     Capital     Earnings       Total
                                    ---------------------------------------------------------------------
<S>                                 <C>          <C>        <C>         <C>         <C>          <C>
Balance, December 31, 1997          $ -          9,467,075  $  63       $ 35,263    $ 25,632     $ 60,958
     Common Stock issued upon
       exercise of warrants                         41,653                   210                      210
     Common Stock issued under
       option plan                                 460,084      4          2,576                    2,580
     3-for-2 stock split                                       33            (33)
     Tax benefit related to
       exercise of stock options                                           1,328                    1,328
     Net income                                                                       10,745       10,745
                                    ---------------------------------------------------------------------
Balance, June 30, 1998              $ -          9,968,812  $ 100       $ 39,344    $ 36,377     $ 75,821

</TABLE>

                             See Notes to Consolidated Financial Statements

                                      6
<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART I, ITEM 1

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)

NOTE 1 - GENERAL

     In the opinion of National  R.V.  Holdings,  Inc.  (collectively,  with its
subsidiaries  National R.V., Inc., and Country Coach, Inc. referred to herein as
the "Company"),  the accompanying  unaudited  consolidated  financial statements
contain  all  adjustments,  consisting  only of  normal  recurring  adjustments,
necessary  for the fair  presentation  of the  financial  position,  results  of
operations  and cash flows for all  periods  presented.  Results for the interim
periods are not necessarily indicative of the results for an entire year and the
financial  statements  do  not  include  all of the  information  and  footnotes
required by generally accepted accounting principles. These financial statements
should be read in  conjunction  with the financial  statements and notes thereto
contained in the Company's latest annual report on Form 10-K.

     On July 1, 1998,  the Board of Directors  declared a 3-for-2 stock split in
the form of a 50% stock dividend on the Company's common stock, payable July 24,
1998 to  stockholders  of record July 10, 1998. All share and per share data, as
appropriate,  reflect this split.  The effect of the split is  presented  within
stockholders'  equity  at June 30,  1998 by  transferring  the par value for the
additional shares issued of $33,229 from the additional  paid-in capital account
to the common stock account.

NOTE 2 - INVENTORIES

   Inventories consist of the following:
                          June 30,          December 31,
                            1998                1997
                      ------------------  ------------------
Finished goods             $ 10,994,000        $ 10,751,000
Work-in-process              12,752,000          12,769,000
Raw materials                11,591,000          11,747,000
Chassis                       5,737,000           2,276,000
                      ==================  ==================
                           $ 41,074,000        $ 37,543,000
                      ==================  ==================

                                      7
<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources
-------------------------------

   At June 30, 1998, the Company had working  capital of $47.2 million  compared
to $39.3 million at December 31, 1997. Net cash provided by operating activities
was $8.2  million  for the six months  ended  June 30,  1998,  compared  to $4.0
million  for the same  period in 1997.  This  resulted  from an  increase in net
income  and  accounts  payable  offset  somewhat  by  an  increase  in  accounts
receivable and inventories.

   Cash used by investing  activities was $2.6 million  compared to $3.8 million
for the comparable period last year.

   Cash used by financing  activities was $1.4 million  compared to $0.2 million
for the  comparable  period last year.  The change was  primarily  due to a $5.3
million  reduction  in  long-term  debt offset  somewhat  by  proceeds  from the
issuance of common stock.

   The Company  believes that the  combination  of internally  generated  funds,
existing capital and funds available from its existing credit facility,  will be
sufficient to meet the Company's  planned capital and  operational  requirements
for at least the next 24 months.

Results of Operations
---------------------

   Net sales for the second quarter of 1998 increased by $21.7 million, or 31.3%
from the  comparable  period last year.  For the first half of 1998, the Company
reported sales of $171.2 million,  33.9% higher than sales of $127.8 million for
the first half of last year. The Company's  Country Coach subsidiary  shipped 62
more Class A motorhomes  than last year and the National RV  subsidiary  shipped
357 more Class A motorhomes  and 87 more  fifth-wheel  units.  The average sales
price for Class A motorhomes  at the National RV  subsidiary  increased  4.4% to
$69,270  reflecting  strong demand for  higher-priced  motorhomes with slide-out
rooms.

   Cost of goods sold of $76.6  million for the second  quarter of 1998 resulted
in a gross  margin  of 15.7%  compared  to a gross  margin of 13.2% for the same
period  last year.  Cost of goods sold of $144.5  million  for the first half of
1998 resulted in a gross margin of 15.6% compared to a gross margin of 13.1% for
the same period last year.  The  increase  was due  primarily  to  manufacturing
efficiencies at the National RV subsidiary which operated at a 33.7% higher rate
of production than last year.

   Selling expense for the second quarter of 1998 increased to $2.5 million,  or
2.7% of net sales,  compared to $2.1 million,  or 3.0% of net sales for the same
period last year.  Selling  expense for the first half of 1998 increased to $5.3
million,  or 3.1% of net sales,  compared to $4.2 million,  or 3.3% of net sales
for the same period last year. The increase was due primarily to the higher 
sales volume.

                                      8
<PAGE>

NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

   General and  administrative  expense for the second quarter of 1998 increased
to $1.6 million, or 1.8% of net sales,  compared to $1.5 million, or 2.2% of net
sales for the same period last year. General and administrative  expense for the
first half of 1998 increased to $3.0 million, or 1.8% of net sales,  compared to
$2.8 million, or 2.2% of net sales for the same period last year.

   As a result of the foregoing, operating income for the second quarter of 1998
increased  88.2% to $10.1  million,  or 11.1%  of net  sales,  compared  to $5.4
million,  or 7.8% of net sales for the same period last year.  Operating  income
for the first half of 1998  increased  91.5% to $18.2  million,  or 10.6% of net
sales,  compared to $9.5 million,  or 7.4% of net sales for the same period last
year.

   Net interest expense and other financing  related costs for the first half of
1998 increased $28,000.

   As a result of the  foregoing,  income  before  income  taxes for the  second
quarter of 1998  increased to $9.9 million,  or 10.9% of net sales,  compared to
$5.3 million,  or 7.6% of net sales for the same period last year. Income before
income taxes for the first half of 1998 increased to $18.0 million,  or 10.5% of
net sales,  compared to $9.4  million,  or 7.3% of net sales for the same period
last year.

   Provision  for income  taxes for the second  quarter of fiscal  1998 was $4.2
million  compared to $2.1 million for the same period last year.  Provision  for
income  taxes  for the  first  half of 1998 was $7.3  million  compared  to $3.8
million for the same period last year. The effective tax rate for the first half
of 1998 was 40.3%  compared to 41.1% for the same period last year. The decrease
was due  primarily  to  improved  apportionment  of income to states  with lower
taxes.

   As a result of the  foregoing,  net  income  for the  second  quarter of 1998
increased to $5.8 million,  or 6.3% of net sales,  compared to $3.1 million,  or
4.5% of net sales for the same period  last year.  Net income for the first half
of 1998  increased  to $10.7  million,  or 6.3% of net sales,  compared  to $5.5
million, or 4.3% of net sales for the same period last year.

Year 2000 Date Conversion
-------------------------

   An issue affecting the Company and most other  companies is whether  computer
systems and  applications  will  recognize and process the year 2000 and beyond.
The Company is in the process of assessing and  implementing  necessary  changes
for all areas of the Company's  business which could be impacted;  these include
such  areas as  business  computer  systems,  dealership  systems,  plant  floor
equipment, end-user computing, financial institutions and suppliers.
   Based on assessments  completed to date and compliance plans in process,  the
Company does not expect that the year 2000 issue will have a material  effect on
its  business  operations,  consolidated  financial  condition,  cash flows,  or
results of operations. However, if appropriate modifications are not made by the
Company's  suppliers or dealers on a timely basis,  or if the  Company's  actual
costs or timing for the year 2000 date  conversion  differ  materially  from its
present  estimates,  the Company's  operations  and  financial  results could be
significantly adversely affected.

                                      9
<PAGE>

Disclosure Regarding Forward Looking Statements
-----------------------------------------------

   Statements  contained  in this  Quarterly  Report  on Form  10-Q that are not
historical  facts are  forward-looking  statements  within  the  meaning  of the
Private Securities  Litigation Reform Act of 1995.  Investors are cautioned that
forward-looking  statements are inherently  uncertain.  Actual  performance  and
results may differ  materially  from that  projected or suggested  herein due to
certain risks and  uncertainties  including,  without  limitation,  the cyclical
nature  of  the  recreational   vehicle  industry;   seasonality  and  potential
fluctuations in the Company's  operating  results;  the Company's  dependence on
chassis suppliers; the integration by the Company of acquired businesses and the
management  of  growth;   potential  liabilities  under  repurchase  agreements;
competition;   government  regulation;  product  liability;  dependence  on  key
personnel and  dependence  on certain  dealers and  concentration  of dealers in
certain   regions.   Additional   information   concerning   certain  risks  and
uncertainties  that could cause actual  results to differ  materially  from that
projected  or suggested  may be  identified  from time to time in the  Company's
filings with the  Securities  and Exchange  Commission  (SEC) and the  Company's
public  announcements,  copies of which are  available  from the SEC or from the
Company upon request.

                                      10
<PAGE>

PART II - OTHER INFORMATION

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

         On  May  29,  1998,  the  Company  held  its  1998  Annual  Meeting  of
stockholders  (the  "Annual  Meeting")  . The  matters  voted upon at the Annual
Meeting and the votes cast for such matters were as follows:

         1.       The  Company's   stockholders  elected  Robert  B.  Lee,  Greg
                  McCaffery  and Stephen M. Davis as Class II Directors to serve
                  until the 2001 Annual  Meeting.  Voting for the  nominees  for
                  director was as follows:  Robert B. Lee;  5,514,301 shares FOR
                  and 57,252 shares WITHHELD;  Greg McCaffery;  5,511,861 shares
                  FOR  and  59,692  shares  WITHHELD;   and  Stephen  M.  Davis;
                  5,112,861 shares FOR and 58,692 shares WITHHELD.

         2.       The  Company's  stockholders  approved  an  amendment  to  the
                  Company's   Certificate  of   Incorporation,   increasing  the
                  authorized  Common  Stock of the Company  from  10,000,000  to
                  25,000,000  shares;  Voting for approval of this amendment was
                  as follows:  4,622,983  shares FOR; 944,750 shares AGAINST and
                  3,820 shares ABSTAINING.

         3.       The  Company's  stockholders  approved  the  adoption  of  the
                  Company's 1997 Stock Option Plan. For the approval of the 1997
                  Stock Option Plan, the vote was 3,252,374  shares FOR; 818,391
                  shares AGAINST; and 1,491,409 shares ABSTAINING.

         4.       The Company's  stockholders  approved the appointment of Price
                  Waterhouse  LLP,  as the  Company's  auditor  for the  current
                  fiscal year. For the  appointment  of Price  Waterhouse LLP as
                  the  Company's  auditor,  the vote was  5,555,151  shares FOR;
                  12,672 shares AGAINST; and 3,730 shares ABSTAINING.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
A.  Exhibits

     99.1  Disclosure Regarding Forward Looking Statements

B.  Reports on Form 8-K

      None

                                      11
<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.

                                  NATIONAL R.V. HOLDINGS, INC.
                                         (Registrant)

Date: August 4, 1998              By /s/ KENNETH W. ASHLEY

                                  Kenneth W. Ashley
                                  Senior Vice President and Chief Financial
                                    Officer (Principal Accounting and Finance
                                    Officer)

                                      12
<PAGE>

Exhibit 99.1

         Disclosure Regarding Forward Looking Statements
         -----------------------------------------------

         Statements contained in this Quarterly Report on Form 10-Q that are not
historical  facts are  forward-looking  statements  within  the  meaning  of the
Private Securities  Litigation Reform Act of 1995.  Investors are cautioned that
forward-looking  statements are inherently  uncertain.  Actual  performance  and
results may differ  materially  from that  projected or suggested  herein due to
certain risks and uncertainties including, without limitation, the following:

                  Cyclical Nature of the RV Industry,  Seasonality and Potential
Fluctuations in Operating  Results.  The RV industry has been  characterized  by
cycles of growth and  contraction  in  consumer  demand,  reflecting  prevailing
economic conditions which affect disposable income for leisure-time  activities.
Concerns  about the  availability  and price of gasoline,  decreases in consumer
confidence,  increases in interest rates and  reductions in available  financing
have had,  and may in the  future  have,  an  adverse  impact  on RV  sales.  In
addition, because of the relatively high selling price of the Company's Highline
motorhomes,  a small  variation in the number of motorhomes  sold in any quarter
could have a significant effect on sales and operating results for that quarter.
Seasonal factors,  over which the Company has no control, also have an effect on
the demand for the Company's  products.  Demand in the RV industry declines over
the winter  season,  while  sales are  generally  highest  during the spring and
summer months.

                  Integration of Acquired Businesses;  Management of Growth. One
of the  Company's  objectives  is to acquire  businesses  in the RV  industry or
related  areas.  Successfully  accomplishing  this goal depends upon a number of
factors,   including  the  Company's   ability  to  find  suitable   acquisition
candidates,  negotiate acquisitions on acceptable terms, retain key personnel of
the acquired entities,  hire and train other competent managers, and effectively
and  profitably  integrate the  operations of the acquired  businesses  into the
Company's existing  operations.  The process of integrating acquired businesses,
including  Country  Coach,  may require a  significant  amount of resources  and
management   attention  which  will  temporarily   detract  attention  from  the
day-to-day  business of the Company.  The Company's ability to manage its growth
effectively  will require it to continue to improve its  operational,  financial
and  management  information  systems  and  controls,  and to  attract,  retain,
motivate and manage employees effectively.  The failure of the Company to manage
growth in its business  effectively  could have a material adverse effect on the
financial condition and results of operations of the Company.

                  Expansion of Manufacturing  Facilities. In 1997, the Company's
National  RV  subsidiary  expanded  its current  production  capacity of 200,000
square feet  through the  construction  of a 154,000  square foot  manufacturing
facility on its  property in Perris,  California.  In  addition,  the  Company's
Country Coach subsidiary  recently  expanded its Junction City, Oregon location.
There can be no assurance that such facilities or future  additional  facilities
will be able to meet the manufacturing  needs of the Company or that the Company
will be  able  to  attract  and  retain  qualified  technical,  supervisory  and
manufacturing  personnel  required  in  order to  operate  such  facility  in an
effective and efficient manner.

<PAGE>

                  Dependence  on  Key  Personnel.   The  Company's   growth  and
continued  success depend to a substantial  degree on Wayne M. Mertes, a founder
of  National RV and  President,  Chief  Executive  Officer and a director of the
Company,  Robert B. Lee, a founder and Chief Executive  Officer of Country Coach
and a  director  of the  Company  and  other  key  personnel.  The  Company  has
employment  agreements  which expire in October 1998 and November  1999 with Mr.
Mertes and Mr. Lee, respectively.  In addition, the Company has obtained key-man
insurance on the life of Mr.  Mertes and Mr. Lee in the amounts of $2.0 and $3.0
million,  respectively.  The loss to the Company of the services of Mr.  Mertes,
Mr. Lee or any of its other key personnel  could have a material  adverse effect
on the business of the Company.

                  Dependence  on Certain  Dealers;  Concentration  of Dealers in
Certain  Regions.  Although  no one  dealer  accounted  for more than 10% of the
Company's  net sales during the year ended  December 31, 1997 and the six months
ended June 30, 1998, the Company's top ten dealers  accounted for  approximately
44.7% and 44.5% of the Company's  sales during the year ended  December 31, 1997
and the six months ended June 30, 1998, respectively. The loss by the Company of
one or more of  these  dealers  could  have a  material  adverse  effect  on the
Company's  financial  condition and results of  operations.  In addition,  as is
typical in the RV industry,  a significant  portion of the  Company's  sales are
from  dealers  located  in  states in the  western  part of the  United  States.
Consequently,  the Company's sales could be materially  adversely  affected by a
general downturn in economic conditions or other material events in such region.

                  Dependence  on  Chassis   Suppliers.   One  of  the  principal
components  used in the  manufacture  of motorhomes  and bus  conversions is the
chassis and bus shell,  respectively,  which include the engine, drive train and
other operating components.  Although Country Coach manufactures chassis used in
certain of its products,  the Company  obtains the required  chassis for most of
its Class A motorhomes from a limited number of  manufacturers  and the required
bus shells from Prevost  Corporation.  Prevost is the only  manufacturer  of bus
shells  used in the  Company's  bus  conversions  and  there is only  one  other
manufacturer  of bus shells in North  America.  As is standard in the  industry,
arrangements  with such suppliers  permit them to terminate  their  relationship
with the Company at any time. Lead times for the delivery of chassis  frequently
exceed  five  weeks,  and the RV  industry  as a  whole  has  from  time to time
experienced  temporary  shortages of chassis.  If any of the Company's suppliers
were to discontinue  the  manufacture of chassis  utilized by the Company in the
manufacture of its Class A motorhomes,  materially reduce their  availability to
the RV  industry  in general or limit or  terminate  their  availability  to the
Company in particular, the business and financial condition of the Company could
be materially and adversely affected.

                  Potential  Liabilities  Under  Repurchase  Agreements.  As  is
common in the industry,  the Company enters into repurchase  agreements with the
financing  institutions  used by its dealers to finance their  purchases.  These
agreements  obligate the Company to purchase a dealer's  inventory under certain
circumstances in the event of a default by the dealer to its lender. The risk of
loss,  however, is spread over many dealers and is further reduced by the resale
value of the RVs that the  Company  would be required  to  repurchase.  Although
losses under these  agreements  have not been  significant  in the past,  if the

<PAGE>

Company were obligated to repurchase a significant  number of RVs in the future,
it could  result in  losses  and a  reduction  in new RV  sales.  The  Company's
contingent  obligations  under repurchase  agreements vary from period to period
and totaled approximately $74.5 million as of December 31, 1997.

                  Competition. The Company competes with numerous manufacturers,
many  of  which  have  multiple  product  lines  of RVs,  are  larger  and  have
substantially greater financial and other resources than the Company.  According
to an  industry  source,  the two  largest  motorhome  manufacturers  had  sales
aggregating 45.0% and 44.3% of total industry-wide  retail unit sales of Class A
motorhomes  for the years ended  December  31, 1997 and 1996,  respectively.  In
addition, sales of used RVs provide competition to RV manufacturers.

                  Government   Regulation.   The   Company  is  subject  to  the
provisions  of the  National  Traffic and Motor  Vehicle  Safety Act (the "Motor
Vehicle Act") and the safety  standards for RVs and  components  which have been
promulgated  thereunder by the Department of  Transportation.  The Motor Vehicle
Act authorizes the National Highway Traffic Safety  Administration  ("NHTSA") to
require a  manufacturer  to recall and repair  vehicles  which  contain  certain
hazards or  defects.  The  Company  has from time to time  instituted  voluntary
recalls of certain  motorhome units, none of which had a material adverse effect
on the  Company.  The  Company  is  also  subject  to  numerous  state  consumer
protection  laws and  regulations  relating to the operation of motor  vehicles,
including so-called "Lemon Laws."

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

                  Product  Liability.  The Company  maintains  product liability
insurance with coverage in amounts which management  believes is reasonable.  To
date, the Company has been successful in obtaining product  liability  insurance
on terms the Company considers acceptable. The Company's current policy provides
coverage  against claims based on occurrences  within the policy periods up to a
maximum of $11  million.  Given the nature of the  Company's  business,  product
liability in excess of the Company's insurance coverage, if incurred, could have
a material adverse effect on the Company.

                  Control by  Affiliates.  As of July 28,  1998,  the  executive
officers and directors of the Company as a group  beneficially own approximately
29% of the  outstanding  shares of Common Stock.  As a result of such ownership,
the  executive  officers and  directors,  as a group,  have the ability to exert
significant  influence on the Company's policies,  the election of directors and
the authorization of certain transactions that require stockholder approval.

<PAGE>

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