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, 2000

{ } 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 July 20, 2000
-----                                          ----------------------------
Common stock, par value                              9,657,086
$.01 per share


<PAGE>


                          NATIONAL R.V. HOLDINGS, INC.

                                      INDEX

                                                                         PAGE
PART 1 - FINANCIAL INFORMATION

Item 1.    Consolidated Balance Sheet -
           June 30, 2000 and December 31, 1999                             3

           Consolidated Statement of Income -
           Three and Six Months Ended June 30, 2000 and 1999               4

           Consolidated Statement of Cash Flows -
           Six Months Ended June 30, 2000 and 1999                         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

Item 3.    Quantitative and Qualitative Disclosures about Market Risk      11

PART II - OTHER INFORMATION

Item 4.    Submission of Matters to a Vote to Security Holders             12

Item 6.    Exhibits and Reports on Form 8-K                                12

           Signature                                                       13

Exhibit 99.1  Factors that May Affect Future Operating Results            14-17










                                       2
<PAGE>

<TABLE>
<CAPTION>
                          NATIONAL R.V. HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                          (In thousands except shares)
<S>                                                    <C>          <C>
                                                          June 30,    Dec. 31,
                                                            2000        1999
                                                        (Unaudited)
                       ASSETS
Current Assets:
     Cash and cash equivalents .......................   $   6,556    $  20,301
     Trade receivables, less allowance for
         doubtful accounts of $199 ...................      17,167       22,473
     Inventories .....................................      75,149       68,187
     Deferred income taxes ...........................       6,489        5,610
     Prepaid expenses ................................       1,745        1,439
                                                         ---------    ---------
         Total current assets ........................     107,106      118,010
Goodwill .............................................       6,746        6,952
Property, plant and equipment, net ...................      39,042       33,167
Other ................................................       1,241        1,085
                                                         ---------    ---------
                                                         $ 154,135    $ 159,214
                                                         =========    =========

         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: .................................
     Current portion of long-term debt ...............   $      20    $      20
     Accounts payable ................................      10,342       11,167
     Accrued expenses ................................      18,092       14,908
                                                         ---------    ---------
         Total current liabilities ...................      28,454       26,095
Deferred income taxes ................................       2,603        2,470
Long-term debt .......................................          74           84
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, 10,589,986 and 10,588,886 issued,
    respectively .....................................         106          106
  Additional paid-in capital .........................      47,779       47,768
  Retained earnings ..................................      90,380       82,691
  Less cost of treasury stock - 932,900 shares .......     (15,261)          --
                                                         ---------    ---------
     Total stockholders' equity ......................     123,004      130,565
                                                         ---------    ---------
                                                         $ 154,135    $ 159,214
                                                         =========    =========
</TABLE>


                 See Notes to Consolidated Financial Statements
                                       3
<PAGE>
<TABLE>
<CAPTION>
                          NATIONAL R.V. HOLDINGS, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                      (In thousands except per share data)
                                   (Unaudited)


<S>                                 <C>        <C>         <C>       <C>
                                      Three Months Ended     Six Months Ended
                                            June 30,              June 30,
                                        2000      1999       2000      1999
                                        ----      ----       ----      ----

Net sales .........................  $  74,524 $ 105,338   $ 179,779 $ 208,320
Cost of goods sold ................     67,071    87,959     156,249   174,187
                                     --------- ---------   --------- ---------
         Gross profit .............      7,453    17,379      23,530    34,133

Selling expenses ..................      3,137     2,612       6,507     5,324
General and administrative expenses      2,440     1,826       4,876     3,734
Amortization of intangibles .......        104       104         207       207
                                     --------- ---------   --------- ---------
         Operating income .........      1,772    12,837      11,940    24,868
Other expense (income):
     Interest expense .............          1         6           2        28
     Interest income ..............  (     227) (    428)   (    481) (    593)
     Other ........................         13  (    380)         21  (    384)
                                     --------- ---------   --------- ---------
         Income before income taxes      1,985    13,639      12,398    25,817
Provision for income taxes ........        792     5,378       4,709    10,235
                                     --------- ---------   --------- ---------
         Net income ...............  $   1,193 $   8,261   $   7,689 $  15,582
                                     ========= =========   ========= =========

Earnings per common share:
     Basic                               $0.12     $0.80      $0.78      $1.50
     Diluted                             $0.12     $0.74      $0.75      $1.38

Weighted average number of shares:
     Basic                               9,657    10,378      9,845     10,364
     Diluted                            10,044    11,189     10,294     11,251
</TABLE>










                 See Notes to Consolidated Financial Statements
                                       4
<PAGE>
<TABLE>
<CAPTION>
                          NATIONAL R.V. HOLDINGS, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<S>                                                     <C>           <C>
                                                             Six Months Ended
                                                                 June 30,
                                                            2000         1999
                                                            ----         ----

Cash flows from operating activities:
Net income ...........................................  $    7,689    $  15,582
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation expense ...........................       1,472        1,130
      Amortization of intangibles ....................         207          207
      Loss (gain) on asset disposal ..................          20     (    380)
      Tax benefit related to exercise of stock options           -          471
      Decrease in trade receivables ..................       5,305        3,919
      Increase in inventories ........................   (   6,962)    (  6,042)
      Increase in prepaid expenses ...................   (     306)    (    213)
      (Decrease) increase in accounts payable ........   (     825)       8,269
      Increase in accrued expenses ...................       3,184        5,163
      Decrease in deferred income taxes ..............   (     746)    (    729)
                                                        ----------    ---------
         Net cash provided by operating activities ...       9,039       27,377

Cash flows from investing activities:
  (Increase) decrease in other assets ................   (     156)          21
  Purchases of property, plant and equipment .........   (   7,368)    (  5,712)
  Investment in Dune Jet Services, LP                            -        2,912
                                                        ----------    ---------
         Net cash used in investing activities .......   (   7,524)    (  2,779)

Cash flows from financing activities:
  Principal payments on long-term debt ...............   (     10)     (  1,752)
  Proceeds from issuance of common stock .............         11           472
  Purchase of treasury stock .........................   ( 15,261)            -
                                                        ---------     ---------
         Net cash used in financing activities .......   ( 15,260)     (  1,280)
                                                        ---------     ---------
Net (decrease) increase in cash ......................   ( 13,745)       23,318
Cash and cash equivalents - beginning of period ......     20,301        10,446
                                                        ---------     ---------
Cash and cash equivalents - end of period ............  $   6,556     $  33,764
                                                        =========     =========
</TABLE>



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


<S>                        <C>       <C>        <C>       <C>          <C>        <C>          <C>            <C>
                           Preferred     Common Stock       Paid-in     Retained       Treasury Stock
                             Stock     Shares    Amount     Capital     Earnings    Shares       Amount          Total
                            ------   ----------  ------    --------     --------   --------    ----------      ---------
Balance, December 31, 1999  $    -   10,588,886  $  106    $ 47,768     $ 82,691          -    $        -      $ 130,565
   Common Stock issued
     under option plan                    1,100       -          11                                                   11
   Purchase of
     Treasury Stock                                                                 932,900     (  15,261)     (  15,261)
   Net income                                                              7,689                                   7,689
                            ------   ----------  ------    --------     --------  ---------    ----------     ----------
Balance, June 30, 2000      $   -    10,589,986  $  106    $ 47,779     $ 90,380    932,900    $(  15,259)    $  123,004
                            ======   ==========  ======    ========     ========  =========    ==========     ==========
</TABLE>























                 See Notes to Consolidated Financial Statements

                                       6
<PAGE>

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



NOTE 2 - INVENTORIES

         Inventories consist of the following:
<TABLE>
        <S>                              <C>                   <C>

                                           June 30,            December 31,
                                             2000                  1999
                                         (Unaudited)
         Finished goods .............    $ 20,104,000          $ 12,315,000
         Work-in-process ............      26,159,000            18,274,000
         Raw materials ..............      15,426,000            14,027,000
         Chassis ....................      13,460,000            23,571,000
                                         ------------          ------------
                                         $ 75,149,000          $ 68,187,000
                                         ============          ============
</TABLE>





                                       7
<PAGE>


NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS

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;   potential   liabilities   under  repurchase   agreements;
competition;  government  regulation;  warranty  claims and  product  liability;
dependence on certain dealers and  concentration  of dealers in certain regions;
and the integration by the Company of acquired  businesses and the management of
growth.  Certain  risks and  uncertainties  that could cause  actual  results to
differ  materially  from  that  projected  or  suggested  are set  forth  below.
Additional information concerning risks and uncertainties 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.


Liquidity and Capital Resources
-------------------------------
         At June 30,  2000,  the Company had  working  capital of $78.7  million
compared to $91.9 million at December 31, 1999.

         Net cash provided by operating  activities was $9.0 million for the six
months  ended June 30,  2000  compared  to $27.4  million for the same period in
1999. The change was due primarily to a $7.9 million decrease in net income, and
a modest decrease in accounts payable compared to a significant  increase in the
prior year.

     Cash used in investing activities was $7.5 million for the six months ended
June 30, 2000 compared to $2.8 million for the comparable  period last year. The
change was due  primarily  to a $1.7  million  increase in capital  expenditures
related to the new towables plant under  construction at the Perris,  California
facility in the current year, and to a $2.55 million  distribution in respect of
the  liquidation  of the  Company's  limited  partnership  interest  in Dune Jet
Services, L.P. received in March 1999.

         Cash used in financing  activities was $15.3 million for the six months
ended June 30, 2000  compared to $1.3  million  for the  comparable  period last
year.  The difference was primarily the result of the $15.3 million spent by the
Company in its stock repurchase  program for the repurchase of 932,900 shares in
the first quarter of 2000.

         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.

                                       8
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS (Continued)

Results of Operations
---------------------
     Net sales of $74.5 million for the quarter ended June 30, 2000  represent a
decrease of $30.8 million or 29.3% from the same quarter last year.  For the six
months ended June 30, 2000, net sales of $179.8 million  represent a decrease of
$28.5  million,  or 13.7%  compared to the same  period  last year.  The Company
shipped 665 coaches on diesel chassis during the first six months,  11 less than
last year for the same  period.  The unit  decrease  was  offset by an  increase
average price of diesel  products of 6% to $168,500,  resulting in a 4% increase
in net sales from diesel products.  The increase in diesel motorhome revenue was
offset by a decrease in sales of the  Company's gas products by 522 units to 870
due to lower retail sales.  The average price of gas motorhomes  increased 3% to
$67,000.  Unit sales of the Company's  fifth-wheel travel trailers increased 4%,
to 231 units  compared to 223 units in the first six months of 1999. The average
price of these units increased 9% to $39,600.

     In addition to the  reduction in total unit  shipments  for the quarter and
six months  ended June 30,  2000,  net sales were also  unfavorably  impacted by
product  discounting  and by a sales  rebate  program  initiated  by the Company
during the second quarter. The rebate program was adopted to help sales of prior
model-year  products  from  dealer lots and to  stimulate  new orders of Company
products.

         Cost of goods sold for the  quarter  ended June 30, 2000  decreased  to
$67.1  million,  a 23.7%  decrease from the  comparable  quarter last year.  The
decrease was due to the decrease in sales.  Cost of goods sold for the first six
months of 2000 decreased to $156.2 million, or 10.3% compared to the same period
in 1999. The decrease was the result of reduced sales offset  somewhat by a $1.0
million  one-time  charge to  warranty  expense  recorded  in the first  quarter
resulting from a voluntary offer by the Company to correct a weight distribution
issue  identified on certain of the Company's  "highline"  motor  coaches.  As a
result of the discounting and the sales rebate program  indicated above, as well
as the $1.0 million warranty charge,  the gross profit margin decreased to 13.1%
for the six-month period as compared to 16.4% for the same period last year.

         Selling  expenses for the three months ended June 30, 2000 increased to
$3.1  million or 20.1% from the same period last year.  For the six months ended
June 30, 2000,  selling expenses  increased to $6.5 million or 22.2% compared to
last year.  The increase was primarily  due to increased  sales  incentives  and
certain  costs  related to setting up new dealers for the  Company's  "highline"
coaches. As a percentage of net sales,  selling expenses increased to 3.6%, from
2.6% for the same period last year.

         General and administrative expenses for the three months ended June 30,
2000 increased to $2.4 million or 33.6% from the same quarter last year. For the
six months ended June 30, 2000, general and administrative expenses increased to
$4.9 million or 30.6% from last year.  The increase was  primarily due to higher
compensation  and  related  costs.  As a  percentage  of net sales,  general and
administrative expenses increased to 2.7% from 1.8% for the same period last

                                       9
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS (Continued)

year.  This is due to the  fact  that  many of the  general  and  administrative
expenses are fixed in nature and as sales decrease, these expenses increase as a
percentage of sales.

         Other income for the three and six months ended June 30, 2000 decreased
to $0.2 million and $0.5 million, from $0.8 million and $0.9, respectively,  for
the same periods last year.  The  decreases  are due  primarily to the fact that
last year included a gain on the  liquidation  of the Dune Jet  Services,  LP as
indicated above. In addition,  lower average invested cash balances  resulted in
reduced interest income.

     As a  result  of the  foregoing,  income  before  taxes  decreased  to $2.0
million,  or 85.4% from the same period last year. For the six months ended June
30, 2000, income before taxes decreased to $12.4 million, or 52.0% from the same
period last year. As a percentage of net sales, year-to-date income before taxes
decreased to 6.9% from 12.4% for the same period last year.

         Provision  for income taxes for the three and six months ended June 30,
2000 decreased to $0.8 million and $4.7 million, respectively. The effective tax
rate for the six months ended June 30, 2000 was 38.0%  compared to 39.6% for the
same  period last year.  The  decrease  in the  effective  tax rate was due to a
benefit arising from usage of a capital loss carryover.

         As a result,  net income for the second  quarter of 2000  decreased  to
$1.2 million, 1.6% of net sales, compared to $8.3 million, or 7.8% of net sales,
for the same period last year.  Net income for the first half of 2000  decreased
to $7.7 million, or 4.3% of net sales, compared to $15.6 million, or 7.5% of net
sales, for the same period last year.










                                       10
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk

Information  about  market risks for the six months ended June 30, 2000 does not
differ  materially from that discussed under Item 7A of the registrant's  Annual
Report on Form 10-K for the year ended December 31, 1999.




























                                       11
<PAGE>
PART II - OTHER INFORMATION

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

         On June  12,  2000,  the  Company  held  its  2000  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 Doy B. Henley and Neil H.
                  Koffler as Class III  Directors to serve until the 2003 Annual
                  Meeting.  Voting for the nominees for director was as follows:
                  Doy  B.  Henley;   8,295,674  shares  FOR  and  46,659  shares
                  WITHHELD; and Neil H. Koffler; 8,295,674 shares FOR and 46,659
                  shares WITHHELD.

         2.       The  Company's  stockholders  approved  an  amendment  of  the
                  Company's  1999 Stock  Option Plan to  increase  the number of
                  shares of Common Stock  eligible for issuance  from 400,000 to
                  800,000.  For the approval of the  amendment to the 1999 Stock
                  Option  Plan,  the vote was  6,548,431  shares FOR;  1,776,127
                  shares AGAINST; and 17,775 shares ABSTAINING.

         3.       The  Company's   stockholders   approved  the  appointment  of
                  PricewaterhouseCoopers  LLP, as the Company's  auditor for the
                  current    fiscal    year.    For    the     appointment    of
                  PricewaterhouseCoopers  LLP as the Company's auditor, the vote
                  was 8,304,355  shares FOR;  31,668 shares  AGAINST;  and 6,310
                  shares ABSTAINING.


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

    Exhibit 99.1  Factors that May Affect Future Operating Results and Financial
                  Condition

B.  Reports on Form 8-K

    None



                                       12
<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: July 20, 2000                      By /s/ BRADLEY C. ALBRECHTSEN
                                                  -----------------------------
                                                      Bradley C. Albrechtsen
                                                      Chief Financial Officer
                                                    (Principal Accounting and
                                                         Finance Officer)








                                       13
<PAGE>
                                                                   Exhibit 99.1
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.

CYCLICALITY AND SEASONALITY 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.  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.

EXPANSION OF MANUFACTURING  FACILITIES IN 1999  The Company purchased additional
land in Perris,  California,  Junction City,  Oregon,  and Hillsborough  County,
Florida for planned expansion of manufacturing and service facilities. 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  facilities  in an  effective  and
efficient manner.

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, 1999, the Company's top ten dealers accounted
for  approximately  43% and 44% of the  Company's  sales  during the years ended
December 31, 1999 and 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,  a significant portion of the
Company's  sales is from  dealers  located in states in the western  part of the
United States.  Consequently, a general downturn in economic conditions or other
material events in such region could  materially  adversely affect the Company's
sales.

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

                                       14
<PAGE>

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 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
$104.5 million as of December 31, 1999.

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  39.8%  of
industry-wide  retail  unit  sales of  Class A  motorhomes  for the  year  ended
December 31,  1999.  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 has had a material adverse effect on the Company.

In March,  2000, the Company's  Country Coach subsidiary  received a notice from
NHTSA which  indicated  that NHTSA is  conducting a review of a safety recall by
Country Coach in 1999 concerning certain motorhomes equipped with a slide galley
option  and  requested  certain  information  about  motorhomes  with  slide out
sections  manufactured  by Country Coach.  Country Coach has responded  fully to
NHTSA's request. At this time, it is not possible to ascertain what action NHTSA
may take with respect to such a review,  or what impact, if any, that the review
may have on the Company's financial  condition or results of operations.  Future
recalls of the Company's vehicles, voluntary or involuntary, however, could have
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."

                                       15
<PAGE>

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 materials and 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.

WARRANTY CLAIMS AND 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.  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.

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  may  require a
significant   amount  of  resources  and  management   attention,   which  could
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.

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.







                                       16