<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: March 29, 1997 

                                      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
 
        Delaware                                     35-1880244
(State of Incorporation)                          (I.R.S. Employer 
                                                  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
March 29, 1997: 4,438,217
 
<PAGE>
                            MONACO COACH CORPORATION
 
                                   FORM 10-Q
 
                                 March 29, 1997
 
                                    INDEX
 
<TABLE>
<CAPTION>
                                                                                   PAGE
                                                                                 REFERENCE
                                                                                ------------
<S>                                                                             <C>         
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

  Condensed Consolidated Balance Sheets as of
   December 28, 1996 and March 29, 1997.                                              4

  Condensed Consolidated Statements of Income 
   for the quarter ended March 30, 1996 and 
   March 29, 1997.                                                                    5

  Condensed Consolidated Statements of Cash 
   Flows for the quarter ended March 30, 1996 and 
   March 29, 1997.                                                                    6

  Notes to Condensed Consolidated Financial Statements.                             7--10

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations.                                     11--17

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.                  17

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.                                                          18

Item 6.   Exhibits and Reports on Form 8-k.                                           18

Signatures                                                                            19

</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>
                                                                                   DECEMBER 28,   MARCH 29,
                                                                                      1996          1997
                                                                                   ------------  -----------
<S>                                                                                <C>           <C>          
ASSETS
Current assets:
  Trade receivables............................................................     $  14,891     $  27,642
  Inventories..................................................................        46,930        45,249
  Prepaid expenses.............................................................         1,343           532
  Deferred tax assets..........................................................         8,278         8,278
  Notes receivable.............................................................         1,064           177
  Assets held for sale.........................................................         1,383           908
                                                                                   ------------  -----------
    Total current assets.......................................................        73,889        82,786
Notes receivable...............................................................           636         2,093
Debt issuance costs, net of accumulated amortization of $343 and $446,
  respectively.................................................................         1,760         1,666
Property, plant and equipment, net.............................................        38,309        41,589
Goodwill, net of accumulated amortization of $2,084 and $2,243,
  respectively.................................................................        20,774        21,014
Other..........................................................................                          41
    Total assets...............................................................     $ 135,368     $ 149,189
                                                                                   ------------  -----------
                                                                                   ------------  -----------
LIABILITIES
Current liabilities:
  Book overdraft...............................................................     $   2,455     $   6,150
  Short-term borrowings........................................................         9,991        15,454
  Current portion of long-term note payable....................................         2,000         2,250
  Accounts payable.............................................................        24,218        28,322
  Accrued expenses and other liabilities.......................................        23,361        25,318
  Income taxes payable.........................................................         7,362         3,486
                                                                                   ------------  -----------
    Total current liabilities..................................................        69,387        80,980
Deferred income................................................................           200           200
Notes payable, less current portion............................................        16,500        15,875
Deferred tax liability.........................................................         2,787         2,871
                                                                                   ------------  -----------
                                                                                       88,874        99,926
                                                                                   ------------  -----------
Redeemable convertible preferred stock, redemption value of $3,005.............         2,687         2,735
                                                                                   ------------  -----------
Commitments and contingencies (Note 10)

STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 20,000,000 shares authorized, 4,438,217 shares
  (4,430,467 shares at December 28, 1996) issued and outstanding...............            44            44
Additional paid-in capital.....................................................        25,430        25,504
Retained earnings..............................................................        18,333        20,980
                                                                                   ------------  -----------
    Total stockholders' equity.................................................        43,807        46,528
                                                                                   ------------  -----------
    Total liabilities and stockholders' equity.................................     $ 135,368     $ 149,189
                                                                                   ------------  -----------
                                                                                   ------------  -----------
</TABLE>

    See accompanying notes.


                                      -4-
<PAGE>

                           MONACO COACH CORPORATION 
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
             (Unaudited: dollars in thousands, except per share data)
 
<TABLE>
<CAPTION>
                                                                              QUARTER ENDED
                                                                        -------------------------
<S>                                                                      <C>          <C>
                                                                          MARCH 30,    MARCH 29,
                                                                            1996         1997
                                                                        ------------ ------------
Net sales.............................................................. $    61,964  $   109,023
Cost of sales..........................................................      55,237       93,981
                                                                        ------------ ------------
    Gross profit.......................................................       6,727       15,042
Selling, general and administrative expenses...........................       4,650        9,476
Management fees........................................................          18           18
Amortization of goodwill...............................................         129          159
                                                                        ------------ ------------
    Operating income...................................................       1,930        5,389
Other expense (income), net............................................          (7)         (39)
Interest expense.......................................................         863          821
                                                                        ------------ ------------
    Income before income taxes.........................................       1,074        4,607
Provision for income taxes.............................................         440        1,912
                                                                        ------------ ------------
    Net income.........................................................         634        2,695
Preferred stock dividends..............................................                      (23)
Accretion of redeemable preferred stock................................                      (25)
                                                                        ------------ ------------
    Net income attributable to common stock............................ $       634  $     2,647
                                                                        ------------ ------------
                                                                        ------------ ------------
Earnings per common share:
    Primary............................................................ $       .14  $       .59
    Fully Diluted...................................................... $       .14  $       .57
Weighted average shares outstanding:
    Primary............................................................   4,465,903    4,516,215
    Fully Diluted......................................................   4,540,236    4,747,083

</TABLE>



See accompanying notes.


                                      -5-

<PAGE>

                             MONACO COACH CORPORATION 
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                          (Unaudited: dollars in thousands)

 
<TABLE>
<CAPTION>
                                                                               QUARTER ENDED
                                                                          ------------------------
<S>                                                                       <C>          <C>
                                                                           MARCH 30,    MARCH 29,
                                                                             1996         1997
                                                                          -----------  -----------
Increase (Decrease) in Cash:

Cash flows from operating activities:
  Net income...........................................................   $     634    $   2,695
  Adjustments to reconcile net income to net cash generated (used) by
    operating activities:
    Depreciation and amortization......................................         566          786
    Deferred income taxes..............................................          84           84
    Changes in working capital accounts, net of effect of business
      acquisition and sale of retail stores:
      Receivables......................................................      (4,637)     (12,735)
      Inventories......................................................       8,592         (611)
      Prepaid expenses.................................................         (84)         811
      Accounts payable.................................................       3,880        4,104
      Accrued expenses and other current liabilities...................       1,129        1,957
      Income tax payable...............................................         172       (3,876)
                                                                          -----------  -----------
         Net cash provided by (used in) operating activities...........      10,336       (6,785)
                                                                          -----------  -----------
Cash flows from investing activities:
  Additions to property, plant and equipment...........................        (329)      (3,780)
  Payment for business acquisition (see note 2)........................     (25,350)
  Proceeds from sale of retail stores, collections on 
    notes receivable, net of closing costs.............................                      206
                                                                         -----------  -----------
    Net cash used in investing activities..............................     (25,679)      (3,574)
                                                                         -----------  -----------
Cash flows from financing activities:
  Book overdraft.......................................................        (516)       3,695
  Borrowings on lines of credit, net...................................       5,837        7,483
  Payments on floor financing, net.....................................        (356)        (468)
  Borrowings on long-term notes payable................................      20,000
  Debt issuance costs..................................................      (2,024)
  Payments on long-term notes..........................................      (7,000)        (375)
  Other................................................................          37           24
                                                                          -----------  -----------
    Net cash provided by financing activities..........................      15,978       10,359
                                                                          -----------  -----------
Net increase in cash...................................................         635            0
Cash at beginning of period............................................           0            0
                                                                          -----------  -----------
Cash at end of period..................................................   $     635    $       0
                                                                          -----------  -----------
                                                                          -----------  -----------
Supplemental disclosure
  Amount of capitalized interest.......................................          34          146

</TABLE>
 
    See accompanying notes.
 


                                      -6-
<PAGE>

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

1.  Basis of Presentation
 
    The interim 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 to present fairly the financial position of the Company as of 
    December 28, 1996 and March 29, 1997, and the results of operations and 
    cash flows of the Company for the quarters ended March 30, 1996 and 
    March 29, 1997. The condensed consolidated financial statements include the
    accounts of the Company and its wholly-owned subsidiary, and all 
    significant intercompany accounts and transactions have been eliminated in
    consolidation. These interim 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
    December 28, 1996.
 
2.  Holiday Acquisition
 
    On March 4, 1996, the Company acquired certain assets of the Holiday 
    Rambler LLC Recreational Vehicle Manufacturing Division ("Holiday Rambler")
    and ten retail dealerships ("Holiday World") from an affiliate of Harley-
    Davidson, Inc. ("Harley-Davidson"). The acquisition (the "Holiday 
    Acquisition") was accounted for as a purchase.
 
    The purchase price for Holiday Rambler and Holiday World was comprised of:
 
<TABLE>
<CAPTION>
                                                                (In thousands)
                                                               ----------------
<S>                                                             <C>
Cash, including transaction costs of $2,131, 
  net of $836 received from Harley-Davidson...................   $  24,645
Preferred stock...............................................       2,599
Subordinated debt.............................................      12,000
                                                               ----------------
                                                                 $  39,244
                                                               ----------------
                                                               ----------------
</TABLE>
 
The purchase price was allocated to the assets acquired based on estimated
fair values at March 4, 1996, as follows:
 
<TABLE>
<CAPTION>
                                                                (In thousands)
                                                               ----------------
<S>                                                            <C>
Receivables....................................................  $   9,536
Inventories....................................................     61,269
Property and equipment.........................................     11,592
Prepaids and other assets......................................         86
Assets held for sale...........................................      7,100
Goodwill.......................................................      2,560
Notes payable..................................................    (21,784)
Accounts payable...............................................    (16,851)
Accrued liabilities............................................    (14,264)
                                                               ----------------
                                                                 $  39,244
                                                               ----------------
                                                               ----------------
</TABLE>
 
The allocation of the purchase price and the related goodwill of $2,161,000 
was subject to adjustment upon resolution of pre-Holiday Acquisition 
contingencies. The effects of resolution of pre-Holiday Acquisition 
contingencies occuring: (i) within one year of the acquisition date were 
reflected as an adjustment of the allocation of the purchase price and of 
goodwill, and (ii) after one year will be recognized in the determination of 
net income.



                                      -7-

<PAGE>
    
                            MONACO COACH CORPORATION
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                  (Unaudited)

2.  Holiday Acquisition (continued)
 
    The ten acquired Holiday World retail store properties were classified as
    "assets held for sale". Seven of the stores were sold during 1996 at a gain
    of $1,402,000, which has been reflected as an adjustment of goodwill. One 
    store was sold during the first quarter of 1997 at a loss of $399,000, 
    which also has adjusted goodwill. The remaining two stores are still held 
    for sale. The Company's results of operations and cash flows include 
    Holiday World since March 4, 1996, as the operating activities of Holiday 
    World are not clearly distinguishable from other continuing operations. Net
    sales of Holiday World stores subsequent to the purchase and included in 
    the quarters ended March 30, 1996 and March 29, 1997 were $9.6 million and 
    $2.9 million, respectively. 
 
    The following unaudited pro forma information presents the consolidated
    results as if the Holiday Acquisition had occurred at the beginning of the
    quarter and giving effect to the adjustments for the related interest on
    financing the purchase price, goodwill and depreciation. The pro forma
    information does not necessarily reflect actual results that would have 
    occurred nor is it necessarily indicative of future operating results.
 


                                            (In thousands, except per
                                                share amounts)
                                                 Quarter Ended
                                                   March 30,
                                                     1996
                                           ----------------------------

Net sales..................................          $   115,766
Net loss...................................                  733
Loss per common share......................                 0.16

 

3.  Inventories
 
    Inventories are stated at lower of cost (first-in, first-out) or market. 
    The composition of inventory is as follows:
 


                                                   (In thousands)
                                              --------------------------
                                               DECEMBER 28,    MARCH 29,
                                                   1996          1997
                                              -------------  -----------
Raw materials................................  $   16,844     $ 15,945
Work-in-process..............................      17,592       17,139
Finished units...............................       3,998        6,449
Holiday World retail inventory...............       8,496        5,716
                                              -------------  -----------
                                               $   46,930     $ 45,249
                                              -------------  -----------
                                              -------------  -----------

 
4.  Goodwill
 
    Goodwill represents the excess of the cost of acquisition over the fair
    value of net assets acquired. The goodwill arising from the acquisition of
    the assets and operations of the Company's Predecessor in March 1993 is 
    being amortized on a straight-line basis over 40 years and, at March 29, 
    1997, the unamortized amount was $18.6 million. The goodwill arising from 
    the Holiday Acquisition is being amortized on a straight-line basis over 20
    years; at March 29, 1997 the unamortized amount was $2.4 million. 
    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.
 

                                      -8-
<PAGE>

                               MONACO COACH CORPORATION
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                     (Unaudited)


5.  Short-term Borrowings
 
    In connection with the Holiday Acquisition, the Company replaced its bank
    line of credit with new credit facilities consisting, in part, of a 
    revolving line of credit of up to $45,000,000, 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 
    0.5%. There were outstanding borrowings of approximately $11,272,000 at 
    March 29, 1997. The revolving line of credit expires March 1, 2001 and is 
    collateralized by all the assets of the Company. The newly acquired Holiday
    World subsidiary has various loans outstanding to finance retail inventory 
    at the dealerships which amounted to approximately $4,182,000 at March 29, 
    1997, which bear interest at various rates based on the prime rate and are 
    collateralized by the assets of the subsidiary.
 
6.  Long-term Borrowings
 
    The Company has a term loan of $18,125,000 outstanding as of March 29, 1997
    which was obtained in connection with the Holiday Acquisition. The term 
    loan bears interest at various rates based on the Company's interest 
    coverage ratio, and expires on March 1, 2001. The term loan requires 
    monthly interest payments, quarterly principal payments and certain 
    mandatory prepayments, and is collateralized by all the assets of the 
    Company.
 
7.  Earnings Per Common Share
 
    Earnings per share is based on the weighted average number of shares
    outstanding during the period after consideration of the dilutive effect of
    stock options and convertible preferred stock. Common shares issued and 
    options granted by the Company are considered outstanding for the period 
    presented, using the treasury stock method. The weighted average number of 
    common shares used in the computation of earnings per common share are as 
    follows:
 
<TABLE>
<CAPTION>

                                                                              Quarter Ended
                                                             --------------------------------------------------
                                                                    March 30,                 March 29,
                                                                       1996                      1997
                                                             ------------------------  ------------------------
<S>                                                          <C>         <C>           <C>         <C>
                                                                            Fully                     Fully
                                                              Primary      Diluted      Primary      Diluted
                                                             ----------  ------------  ----------  ------------
Issued and outstanding (weighted average)..................   4,414,254    4,414,254    4,435,703    4,435,703
Stock options..............................................      51,649       60,020       80,512       80,512
Convertible preferred stock................................                   65,962                   230,868
                                                             ----------  ------------  ----------  ------------
                                                              4,465,903    4,540,236    4,516,215    4,747,083
                                                             ----------  ------------  ----------  ------------
                                                             ----------  ------------  ----------  ------------

</TABLE>
 
8.  New Accounting Pronouncement
 
    In February 1997, the Financial Accounting Standards Board issued Statement
    of Financial Accounting Standard No. 128, "Earnings Per Share", which is
    required to be adopted for periods ending after December 15, 1997. The 
    following table presents unaudited pro forma earnings per share, calculated
    in accordance with the provisions of this new standard:

 
                                    MARCH 30, 1996     MARCH 29, 1997
                                   -----------------  -----------------
Basic...........................      $     .14          $     .60
Diluted.........................      $     .14          $     .57



                                      -9-

<PAGE>
 

                               MONACO COACH CORPORATION
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                    (Unaudited)


10. Commitments and Contingencies
 
    REPURCHASE AGREEMENTS
 
    Substantially all of the Company's sales to independent dealers are made on
    terms requiring cash on delivery. The Company does not finance dealer 
    purchases. However, most dealers are financed on a "floor plan" basis by a 
    bank or finance company which lends the dealer all or substantially all of 
    the wholesale purchase price and retains 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 a dealer's inventory in the event 
    of default by a dealer to its lender. 
 
    The Company's liability under repurchase agreements is limited to the 
    unpaid balance owed to the lending institution by reason of its extending 
    credit to the dealer to purchase its vehicles. The Company does not 
    anticipate any significant losses will be incurred under these agreements 
    in the foreseeable future.
 
    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. In addition, in 
    connection with the Holiday Acquisition, the Company assumed most of the 
    liabilities of that business, including product liability and warranty 
    claims. The Company does not believe that the outcome of its pending legal 
    proceedings, in excess of insurance coverage and accruals recorded for 
    estimated settlements, will have a material adverse effect on the business,
    financial condition or results of operations of the Company.
 
    OTHER COMMITMENTS
 
    In 1996, the Company began construction of a new manufacturing facility in
    Wakarusa, Indiana. The new facility is expected to be completed in 1997 at 
    a total estimated cost of $15 million. At March 29, 1997, the Company had 
    incurred approximately $8.2 million in expenditures related to construction
    in progress on the facility.
 
11. Subsequent Event
 
    On March 19, 1997, the Company filed a registration statement with the
    United States Securites and Exchange Commission to register for sale to the
    public 800,000 shares of its Common Stock, which is expected to occur after
    March 29, 1997. The Company intends to use the net proceeds from the 
    offering to retire all or a portion of the outstanding balance under its 
    revolving line of credit. The balance of the proceeds are expected to be 
    used for working capital and general corporate purposes.
 


                                     -10-
<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 21E of the Securities Exchange Act of 1934, as 
amended, including 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 acheivements of the Company to differ 
materially from those expressed or implied by such forward-looking 
statements. Such factors include, among others, the factors discussed 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 ten models of motor coaches and five models of 
fifth wheel trailers and travel trailers under the well-known "Monaco" and 
"Holiday Rambler" 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 $60,000 to $750,000 for motor coaches and from 
$15,000 to $70,000 for towables.
 
Prior to March 1996, the Company's product line consisted exclusively of 
High-Line Class A motor coaches (units with retail prices above $120,000). On 
March 4, 1996 the Company acquired Holiday Rambler, a manufacturer of a full 
line of towable products and mid to upper priced motor coaches. The Holiday 
Acquisition more than doubled the Company's net sales, significantly 
broadened the range of products the Company offered (including the Company's 
first offerings of towables and entry-level to mid-range motor coaches) and 
significantly lowered the price threshold for first-time buyers of the 
Company's products, making them affordable for a significantly larger base of 
potential customers.
 
The operations of Holiday Rambler were incorporated into the Company's 
consolidated financial statements from March 4, 1996. Therefore, the 
Company's consolidated financial statements for the first quarter of 1996 
include only one month of Holiday Rambler operations while the first quarter 
of 1997 includes three months of Holiday Rambler operations. Both 1996 and 
1997 results contain other expenses related to the Holiday Acquisition, 
primarily interest expense, the amortization of debt issuance costs, and 
Holiday Acquisition goodwill.
 
RESULTS OF OPERATIONS

Quarter ended March 29, 1997 Compared to Quarter ended March 30, 1996
 
Net sales increased 75.9% to $109.0 million in the first quarter of 1997 
compared to $62.0 million for the same period last year. The primary reason 
for this increase was the inclusion in the 1997 period of three months of 
Holiday Rambler operations compared to one month in the 1996 period. The 
Company's overall unit sales more than doubled from 641 units in 1996 to 
1,491 units in 1997 (excluding 98 units in 1997 and 193 units in 1996 that 
were sold by the Company's Holiday World retail dealerships that were either 
previously owned or not Holiday Rambler units). On a pro forma basis, 
assuming the Company had acquired Holiday Rambler at the beginning of 1996, 
wholesale sales dollars would have been up 7.4%, with motorized products up 
4.1% and towables up 26.9%. The substantial increase in towable sales was 
primarily due to sales of the Company's Alumascape model which was introduced 
in the third quarter of 1996. The Company's average unit selling price 
dropped to $71,684 in the first quarter of 1997 from $92,650 in the first 
quarter of 1996. Due to the inclusion of Holiday Rambler's generally lower 
priced products, the Company expects its overall average selling price to 
remain less than $100,000.

                                     -11-

<PAGE>

Gross profit for the first quarter of 1997 increased to $15.0 million, up 
$8.3 million from $6.7 million in 1996, and gross margin increased to 13.8% 
in 1997 from 10.9% in 1996. Gross margin in the first quarter of 1996 was 
limited by a $645,000 increase in cost of sales resulting from an inventory 
write-up to fair value arising from the Holiday Acquisition. Without this 
charge, gross margin in the first quarter of 1996 would have been 11.9%. 
Gross margin in 1997 was slightly lower than expected due to a combination of 
factors. The Company had abnormally high costs stemming from the ramp up of 
production in the Coburg, Oregon plant from 8 to 10 units per week. 
Additionally, the Company took some modest inventory write-downs in 
anticipation of model changes coming up in the second quarter. One of the 
Company's objectives continues to be to improve individual model gross 
margins, primarily through additional purchasing and manufacturing synergies 
anticipated to be derived from the Holiday Acquisition. 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 from $4.7 million in 
1996 to $9.5 million in the first quarter of 1997 and increased as a 
percentage of net sales from 7.5% in 1996 to 8.7% in 1997. The increase in 
selling, general, and administrative expenses in dollars and as a percentage 
of net sales was primarily due to the inclusion of a full quarter of Holiday 
Rambler operations in 1997 versus only one month in 1996. Holiday Rambler has 
historically spent more for selling, general, and administrative expense as a 
percentage of net sales than Monaco. The Company has reduced and plans to 
continue lowering the level of spending by Holiday Rambler for selling, 
general, and administrative expenses as a percentage of net sales. However, 
the Company's overall selling, general, and administrative expenses as a 
percentage of net sales is expected to remain higher than the level prior to 
the Holiday Acquisition.
 
Amortization of goodwill was $159,000 in the first quarter of 1997 compared 
to $129,000 in the same period of 1996. At March 29, 1997, goodwill, net of 
accumulated amortization, was $21.0 million.
 
Operating income was $5.4 million in the first quarter of 1997, a $3.5 
million increase over $1.9 million in the first quarter of 1996. The 
improvement in the Company's gross margin was greater than the increase in 
selling, general, and administrative expense as a percentage of net sales, 
resulting in an increase in operating margin from 3.1% in the first quarter 
of 1996 to 4.9% in the first quarter of 1997. The Company's operating margin 
in the first quarter of 1996 was adversely affected by a $645,000 expense 
related to an inventory write-up to fair value as a result of the Holiday 
Acquisition. Without that charge, the Company's operating margin in the first 
quarter of 1996 would have been 4.1%.
 
Net interest expense was $821,000 in the first quarter of 1997 compared to 
$863,000 in the comparable 1996 period. The Company capitalized $146,000 of 
interest expense in 1997 relating to the construction in progress for a new 
motorized manufacturing facility in Wakarusa, Indiana, and capitalized 
$34,000 of interest expense in 1996 stemming from the construction of the 
Coburg, Oregon facility. The Company's interest expense included $153,000 in 
1997 and $209,000 in 1996 relating to floor plan financing at the retail 
stores. Additionally, 1997 first quarter interest expense included $103,000 
related to the amortization of $2.1 million in debt issuance costs recorded 
in conjunction with the Holiday Acquisition. These costs are being written 
off over a five-year period.
 
The Company reported a provision for income taxes of $1.9 million, or an 
effective tax rate of 41.5%, in the first quarter of 1997, compared to 
$440,000, or an effective tax rate of 41%, for the comparable 1996 period.
 
Net income increased by $2.1 million from $634,000 in the first quarter of 
1996 to $2.7 million in the first quarter of 1997, primarily due to the 
increases in net sales and operating income resulting from the Holiday 
Acquisition.
 
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 quarter of 1997, the Company had a cash outflow of $6.8 million from 
operations. An abnormally large increase in trade receivables, arising 
primarily from a trade show in March, combined with payments that reduced  
income taxes payable more than offset the $3.5 million generated from net 
income and non-cash expenses such as depreciation and amortization, as well 
as increases in accounts payable and accrued expenses. The increase in trade 
receivables was temporary and the Company's trade receivable balance has 
since returned to a more normal level.

                                     -12-
<PAGE>

The Company has 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 bears interest at various rates based upon 
the prime lending rate announced from time to time by Banker's Trust Company 
(the "Prime Rate") or LIBOR and is due and payable in full on March 1, 2001. 
The Term Loan requires monthly interest payments, quarterly principal 
payments and certain mandatory prepayments. The mandatory prepayments consist 
of: (i) an annual payment on April 30 of each year, beginning April 30, 1997, 
of seventy-five percent (75%) of the Company's defined excess cash flow for 
the then most recently ended fiscal year (no defined excess cash flow existed 
for the year ended December 28, 1996); and (ii) a payment within two days of 
the sale of any Holiday World dealership, of the net cash proceeds received 
by the Company from such sale. At the election of the Company, the Revolving 
Loans bear interest at variable interest rates based on the Prime Rate or 
LIBOR. At March 29, 1997, the effective interest rates on the Revolving Loans 
and the Term Loan were 9.75% and 8.53%, respectively. The Revolving Loans are 
due and payable in full on March 1, 2001, and require monthly interest 
payments. As of March 29, 1997, $18.1 million was outstanding under the Term 
Loan and $11.3 million was outstanding under the Revolving Loans. The Term 
Loan and 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 also has various loans outstanding to finance retail 
inventory at the two remaining Holiday World dealerships which amounted to 
$4.2 million at March 29, 1997 and which bear interest at various rates based 
on the prime rate and are collateralized by the assets of the Company.
 
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. At March 29, 1997, the Company had 
working capital of approximately $1.8 million, a decrease of $2.7 million 
from working capital of $4.5 million at December 28, 1996. The Company has 
been using short-term credit facilities and cash flow to finance construction 
of a new motorized manufacturing facility in Wakarusa, Indiana. The Company 
primarily used long-term debt and redeemable preferred stock to finance the 
Holiday Acquisition.
 
The Company's capital expenditures were $3.8 million in the first quarter of 
1997, primarily for construction of the Wakarusa facility. This facility is 
expected to double the Company's production capacity of motor coaches from 14 
units to 28 units per day. The total cost of the Wakarusa facility is 
estimated to be approximately $15.0 million, and the plant is expected to be 
operational by the end of the second quarter of 1997.
 
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 anticipates that capital 
expenditures for all of 1997 will total from $17.0 to $20.0 million, of which 
an estimated $10.0 million will be spent to finish construction of the 
Wakarusa facility, $1.0 million will be used to set up a new towable 
manufacturing facility in Springfield, Oregon, and up to $2.0 million will be 
used to upgrade the Company's management information systems, including 
software to handle the "Year 2000" issue. 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, including the Holiday World dealerships, 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 
March 29, 1997, approximately $137.0 million of products sold by the Company 
to independent dealers were subject to potential repurchase under existing 
floor plan financing agreements with approximately 7.0% 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. 


                                     -13-
<PAGE>

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, 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 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 as a result of the Holiday Acquisition, 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, as a result 
of the Holiday Acquisition, the Company 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, interest rates rose significantly in 1994 and while recent 
interest rates have not had a material adverse effect on the Company's 
business, no assurances can be given that an increase in interest rates would 
not have a material adverse effect on the Company's business, results of 
operations and financial condition.
 
MANAGEMENT OF GROWTH.  As a result of the Holiday Acquisition, the Company 
has experienced significant growth in the number of its employees, in the 
size of its manufacturing operations and in the scope of its business. This 
growth has resulted in the addition of new management personnel, 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 substantially completed the 
integration of Holiday Rambler's operations and personnel into the Company, 
due to the large size of the Holiday Acquisition relative to the Company, 
there can be no assurance that the Company will not encounter problems in the 
future associated with the integration of Holiday Rambler's operations and 
personnel or that the anticipated benefits of the Holiday Acquisition will be 
fully realized. In addition, there can be no assurance that the Company will 
adequately support and manage the growth of its business and the failure to 
do so could have a material adverse effect on the Company's business, results 
of operations and financial condition.
 
MANUFACTURING EXPANSION.  The Company significantly increased its 
manufacturing capacity in 1995 by expanding its Elkhart, Indiana facility and 
opening its Coburg, Oregon facility. In order to meet market demand and 
realize manufacturing efficiencies, the Company is constructing a new motor 
coach manufacturing facility in Wakarusa, Indiana, is relocating its Elkhart, 
Indiana motor coach production to the new Wakarusa facility, and recently 
completed construction of the new Springfield, Oregon facility to manufacture 
towables. The integration of the Company's facilities and the expansion of 
the Company's manufacturing operations involve a number of risks including 
unexpected production difficulties. In 1995, the Company experienced start-up 
inefficiencies in manufacturing the Windsor model and, beginning in 1996, the 
Company experienced difficulty in increasing production rates of motor 
coaches at its Coburg facility. 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.


                                     -14-

<PAGE>
    
The set-up and scale-up of production facilities in Wakarusa and Springfield 
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 set-up of the new facilities 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 set-up of its Wakarusa and 
Springfield 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, at such time as 
the Company commences production at these new facilities, it 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 more than 150 dealerships located primarily in the United 
States and Canada as of March 29, 1997, 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 1996, the top 
three dealers accounted for approximately 22.5% 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 dealers' 
inventory under certain circumstances in the event of a default by the dealer 
to its lender. In 1993, the Company's then third largest dealer went into 
default with its lenders, and the Company was required to repurchase 16 motor 
coaches. Although the Company was able to resell these motor coaches within 
three months, the Company incurred expenses of approximately $291,000 in 
connection with this dealer's default. Additionally, the need to resell these 
motor coaches and the loss of that dealer temporarily limited the Company's 
sales of new motor coaches. 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 $137.0 million as of 
March 29, 1997, with approximately 7.0% concentrated with one dealer. See 
"Liquidity and Capital Resources" and Note 10 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.
 
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 Engine Company, Inc.), 
substantially all of its transmissions (Allison Transmission Division of 
General Motors Corporation), axles for all diesel motor coaches other than 
the Holiday Rambler Endeavor Diesel model and chassis for certain of its 
Holiday Rambler products (Chevrolet Motor Division of General Motors 
Corporation, Ford Motor Company and Freightliner Custom Chassis Corporation). 
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. Although the 
Company believes that adequate alternative suppliers exist for each of these 
components, an extended delay or interruption in the supply of any of the 
components currently obtained from a single source supplier or limited 
supplier could have a material adverse effect on the Company's business, 
results of operations and financial condition.
 
                                       -15-
<PAGE>

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, in the third quarter of 1995 
the Company incurred unexpected costs associated with three model changes 
introduced in that quarter which adversely affected the Company's gross 
margin. There also can be no assurance that product introductions in the 
future will not 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, some of which have 
significantly greater financial resources and more extensive marketing 
capabilities than the Company. 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.
 
RISK 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. In addition, as 
a result of the Holiday Acquisition, the Company assumed most of the 
liabilities of Holiday Rambler, including product liability and warranty 
claims. 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 $26.0 million for each occurrence and 
$27.0 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.
 
ENVIRONMENTAL REGULATION AND REMEDIATION
 
REGULATION.  The Company's recreational vehicle manufacturing operations are 
subject to a variety of federal and state environmental regulations relating 
to the use, generation, storage, treatment and disposal of hazardous 
materials. These laws are often revised and made more stringent, and it is 
likely that future amendments to these laws will impact the Company's 
operations.
 
The Company has submitted applications for "Title V" air permits for its 
operations in Elkhart, Indiana, Nappanee, Indiana and Wakarusa, Indiana 
(including the new motor coach production facility under construction) and is 
in the process of preparing an application for its facility in Coburg, 
Oregon. The Company has provided the relevant state agency with a schedule of 
completion for the Coburg application, which will be filed after the 
regulatory deadline, and the agency has indicated to the Company that the 
schedule will be acceptable.
 
The Company does not currently anticipate that any additional air pollution 
control equipment will be required as a condition of receiving new air 
permits, although new regulations and their interpretation may change over 
time, and there can be no assurance that additional expenditures will not be 
required.
 
While the Company has in the past provided notice to the relevant state 
agencies that air permit violations have occurred at its facilities, the 
Company has resolved all such issues with those agencies, and the Company 
believes that there are no ongoing violations of any of its existing air 
permits at any of its owned or leased facilities at this time. However, the 
failure of the Company to comply with present or future regulations could 
subject the Company to: (i) fines; (ii) potential civil and criminal 
liability; (iii) suspension of production or cessation of operations; (iv) 
alterations to the manufacturing process; or (v) costly clean-up or capital 
expenditures, any of which could have a material adverse effect on the 
Company's business, results of operations and financial condition.


                                     -16-
<PAGE>

REMEDIATION.  The Company has identified petroleum and/or solvent ground 
contamination at the Elkhart, Indiana manufacturing facility, at the 
Wakarusa, Indiana manufacturing facility and the Leesburg, Florida dealership 
acquired in the Holiday Acquisition. The Company has remediated the Elkhart 
site and recommended to the relevant Indiana regulatory authority that no 
further action be taken because the remaining contaminants are below the 
state's clean-up standards. The Company currently expects that the regulatory 
authority will concur with this finding, although there is no assurance that 
such approval will be forthcoming or that the regulatory authority will not 
require additional investigation and/or remediation. The Company is 
investigating the Wakarusa site and expects soon to recommend to the relevant 
regulatory authority that no further action be taken at that site based on 
the Company's consultants' view that there is a limited risk associated with 
the remaining contamination. It is unclear whether the regulatory authority 
will concur in this finding or whether additional remediation will be 
required. In Florida, the Company and its consultants are conducting 
investigations to determine the appropriate remediation program to recommend 
to the relevant Florida regulatory authority for the contamination associated 
with former underground storage tanks at the Leesburg dealership. With regard 
to the Wakarusa and Leesburg sites, the Company is indemnified by 
Harley-Davidson for investigation and remediation costs incurred by the 
Company (subject to a $300,000 deductible in the case of the Wakarusa site 
and subject to a $10 million maximum in the case of the Wakarusa site and a 
$5 million maximum in the case of the Leesburg site for matters, such as 
these, that were identified at the closing of the Holiday Acquisition).
 
The Company does not believe that any costs it will bear with respect to 
continued investigation or remediation of the foregoing locations and other 
facilities currently or formerly owned or occupied by the Company will have a 
material adverse effect upon the Company's business, results of operations or 
financial condition. Nevertheless, there can be no assurance that the Company 
will not discover additional environmental problems or that the cost to the 
Company of the remediation activities will not exceed the Company's 
expectations.
 
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
 
        Not applicable.
 



                                     -17-
<PAGE>

                           PART II--OTHER INFORMATION
 
ITEM 1. Legal Proceedings.
 
    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. In addition, in 
    connection with the Holiday Acquisition, the Company assumed most of the 
    liabilities of that business, including product liability and warranty 
    claims. The company does not believe that the outcome of its pending legal 
    proceedings, in excess of insurance coverage and accruals recorded for 
    estimated settlements, will have a material adverse effect on the business,
    financial condition or results of operations of the Company.
 
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
    March 29, 1997, for which this report is filed.
 





                                     -18-

<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 13, 1997                      /s/ John W. Nepute 
      ---------------------               -------------------------------
                                          John W. Nepute 
                                          Vice President of Finance and 
                                          Chief Financial Officer (Duly 
                                          Authorized Officer and Principal 
                                          Financial Officer)





 
                                       -19-