U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                                       OF
                       THE SECURITIES EXCHANGE ACT OF 1934

 For the Fiscal Year Ended                               Commission File No.:
      December 31, 1997                                        0-24804

                             FEATHERLITE MFG., INC.
             (Exact Name of Registrant as Specified in its Charter)

        Minnesota                                          41-1621676
 (State of Incorporation)                  (IRS Employer Identification Number)

                                Highways 63 and 9
                               Cresco, Iowa 52136
                                 (319) 547-6000
                    (Address of principal executive offices;
                           Issuer's telephone number)
                            ------------------------

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, without par value
                            ------------------------

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 by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant as of March 9, 1998, was $18,087,292 (based on the last sale price of
the registrant's Common Stock on such date).

Shares of without par value Common Stock outstanding at March 9, 1998:
                                   6,255,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into the indicated Part of
this Form 10-K:  (1) Annual  report to  shareholders  for the fiscal  year ended
December 31, 1997 - Part II; (2) Proxy  statement for 1998 Annual Meeting - Part
III.



<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

     Featherlite  Mfg., Inc. was organized by current  management as a Minnesota
corporation  in 1988 to acquire the assets of a  non-affiliated  business  which
manufactured trailers since the early 1970s under the FEATHERLITE(R) brand name.
The Company  designs,  manufactures  and markets  over 400 models of both custom
made and standard model specialty  aluminum and steel trailers through a network
of over 240 full-line  dealers and over 900 limited-line  dealers located in the
United States and Canada.

     In 1996,  the Company  began  manufacturing  and  marketing a custom luxury
motorcoach   primarily   through  the  acquisition  of  the  assets  of  Vantare
International, Inc., which is among the leaders and fastest growing companies in
the high end motorcoach  industry.  Entry into the luxury  motorcoach market was
consistent   with   Featherlite's   long-term   growth   strategy   of   product
diversification.  These  motorcoaches are marketed under the trade name "VANTARE
by Featherlite(TM)".

     The Company  markets its primary  products under the  FEATHERLITE(R)  brand
name.  FEATHERLITE(R)  trailers are made of aluminum,  which  differentiates the
Company  from most of its  competitors  which  primarily  make  steel  trailers.
Aluminum  trailers  are  superior  to  steel in  terms  of  weight,  durability,
corrosion  resistance,   maintenance  and  weight-to-load  ratio.  Although  the
Company's focus is on manufacturing  and marketing  aluminum  trailers,  it also
markets  a  line  of   composite   steel  and   aluminum   trailers   under  the
FEATHERLITE-STL(R)  series  (replaced  Econolite  beginning in 1997) and DIAMOND
D(R) brands in order to provide  dealers and customers with a high quality,  but
less expensive, alternative to the aluminum trailer.

     Management  believes that the  Company's  growth is being caused by overall
market expansion, particularly in uses related to entertainment and leisure, and
by the  Company  increasing  its share of a  fragmented  market.  Demand for the
Company's products is being significantly driven by the lifestyles,  hobbies and
events that are important to  Featherlite's  target  customers.  Growth in those
product and service categories which could use or require a high quality trailer
is creating  increased demand for the Company's  products.  Those categories and
uses  include  pickup  trucks,  sport  utility  vehicles,  all-terrain-vehicles,
personal  watercraft  and  snowmobiles;   auto  races,  classic  car  shows  and
motorcycle rallies;  hobby farming and raising and showing horses; art and craft
fairs and expositions;  and vending trailers for selling crafts,  food and other
concessions,  such as T-shirts or novelty items.  Examples of other users of the
Company's  trailers  include lawn care services,  house  painters,  construction
crews,  traveling museum  exhibitions,  concert tours,  musical groups and fiber
optic utility crews that require clean environments in which to splice and store
cable.

     The Company  continually  monitors the market for opportunities to leverage
the  FEATHERLITE(R)  brand name and its  expertise.  Featherlite  pioneered  the
introduction  of standard  model aluminum  horse and livestock  trailers,  which
traditionally  had been custom made.  It has also  responded  to the  increasing
demand for  customizing  the  interiors  of trailers,  a capability  which helps
distinguish  the Company from its  competition.  Typical  interiors range from a
simple  interior,  such as a dressing  room,  closet and mirror in the nose of a
horse trailer, to sophisticated, such as upholstered seating and sleeping areas,
kitchens,  bathrooms and modern  electronics,  including fax machines,  cellular
phones and satellite dishes, in race car transporters and luxury custom coaches.
In addition,  Featherlite  refines the products it already offers by introducing
new features to satisfy the increasing demands of its customers.


<PAGE>

     The Company pays special  attention to its target customers and attempts to
reach  them  through  a  variety  of  media.  Unlike  most  of its  competition,
Featherlite is large enough to benefit from national advertising and sponsorship
of major events which are visible to its customers.  These sponsorships  include
Featherlite's  designation as the "Official Trailer of NASCAR,  CART, IRL, ARCA,
ASA, World of Outlaws and the  Indianapolis  Motor Speedway," a major sponsor of
NHRA drag racing and association  with the All American  Quarter Horse Congress,
the International  Arabian Horse Association and others.  Vantare, the Company's
luxury motorcoach division is the "Official Coach" of NASCAR, IRL and Sportscar.
Featherlite  intends to expand its promotional  activities as the Company enters
new markets. 

Specialty Trailer and Motorcoach Industry

     The Company  operates in two principal  industries  and business  segments:
specialty  trailers  and  motorcoaches,  as  discussed  in the  section  labeled
"Management's  Discussion  and Analysis"  which appears in the Company's  Annual
Report  to  Shareholders   for  the  year  ended  December  31,  1997  which  is
incorporated herein by reference.

Specialty Trailer Industry

     Specialty  trailers are designed for specific  hauling purposes rather than
for general commercial freight.  The customers of the specialty trailer industry
consist of broad  segments  of the general  public,  such as  hobbyists,  sports
enthusiasts,   farmers  and  ranchers,  engaged  in  the  activities  for  which
particular trailers are designed.  In contrast,  commercial freight trailers are
generally  made  for  non-specific  purposes  and the  customers  are  typically
trucking companies and manufacturers with fleets of trucks and trailers.  Unlike
the  commercial  freight  trailer  industry  which is  dominated  by a few large
manufacturers,  the  specialty  trailer  industry  is  comprised  of many  small
manufacturers.  No  published  statistics  are  available  on  the  size  of the
specialty trailer industry or its subcategories.  However,  the Company believes
that there may be as many as 500  manufacturers  of specialty  steel trailers in
the United States,  of which  approximately  20 manufacture  specialty  aluminum
trailers.

     Historically,  specialty trailers were made of steel,  principally  because
they  cost  approximately  30% to 40%  less  than  trailers  made  primarily  of
aluminum.  Entry into the  production of steel  trailers is relatively  easy and
inexpensive  because of the  widespread  availability  of steel  components  and
simple  production  techniques.  The relative lack of barriers to entry into the
steel trailer  industry,  differing  regional  demands for trailer types and the
relatively  high  cost  of  long  distance  delivery  have  contributed  to  the
fragmented  status of the specialty  trailer  industry.  As a result,  specialty
trailer manufacturers generally produce relatively small numbers of trailers for
sale in limited  geographical  markets  without the  efficiencies of high volume
production,  quality controls,  significant  warranty and service  capabilities,
substantial dealer networks,  or national advertising and marketing programs. In
comparison,  production of aluminum trailers requires larger capital  investment
in  dies,  extrusion  molds  and  equipment,   more  sophisticated  welding  and
production   techniques,   and  greater  design  capabilities  to  maximize  the
strength-to-weight ratio advantage of aluminum over steel.

     In dollar sales,  the Company  estimates that aluminum  trailers  presently
constitute  five to ten percent of the total market for  specialty  trailers and
that this  percentage is increasing.  The trend of the trailer market to migrate
toward aluminum models is driven by a number of factors. Aluminum trailers offer
substantial  advantages  over steel  trailers  in weight,  ease of  maintenance,
durability and useful life.  Aluminum  trailers do not rust and weigh 30% to 40%
less than comparable steel models. Maintenance is substantially less on aluminum
trailers  because of the  absence of rust and  because  they  typically  are not
painted  or are  pre-painted  with a  baked-on  enamel.  As a  result,  aluminum
trailers can be offered with superior  warranties and provide  greater  customer
satisfaction. The lighter weight of aluminum trailers reduces the demands on the
towing  vehicle,  affords better gas mileage and allows a greater  percentage of
gross trailer weight for carrying cargo.

<PAGE>

Motorcoach Industry

     Bus  conversion  motorcoaches  are the most  luxurious of all  recreational
vehicles. They represent a unique market niche, with selling prices ranging from
$500,000 to $900,000 or more.  These  motorcoaches are made from a bus shell for
conversions that is purchased and completed to provide an interior area designed
to the customers specifications.  It has been estimated that this segment to the
RV market  experienced  more than a 30%  growth  between  1990 and 1994 and this
growth is expected to continue in the future. A large part of the target market,
the 45 to 64 age group,  is  expected to grow 33% this  decade  alone.  Sales of
these vehicles will be boosted  because this group is expected to retire earlier
and have a greater  affluence than previous  generations.  The Company  believes
that there are presently seven or more companies in this industry.

Products and Services

     The Company's  primary  business  activity is the  manufacture  and sale of
specialty  aluminum trailers under the  FEATHERLITE(R)  brand name. In 1996, the
Company began  manufacturing  and marketing a custom  motorcoach  under the name
"VANTARE  by  Featherlite".  In  addition,  the Company  manufactures  and sells
combination  steel and aluminum  trailers  under its  FEATHERLITE-STL(R)  series
(formerly  Econolite)  and  DIAMOND  D(R) brand  names,  sells  replacement  and
specialty  parts, and coordinates  delivery of completed  trailers to customers.
Rework and warranty services are also provided for Company built trailers at the
Company's  facilities and dealer locations.  For 1997, over 95% of the Company's
revenues were derived from trailer and motorcoach sales.

     The following  data  illustrate the percentage of the Company's net trailer
and  motorcoach  sales by  product  type in 1995,  1996  and  1997  (dollars  in
thousands):

<TABLE>
<CAPTION>


                                                             Years ended December 31
                                ------------------------------------------------------------

                                       1995                1996              1997
                                ------------------------------------------------------------
                                 Amount   Percent*   Amount  Percent*  Amount   Percent*
                                ------------------------------------------------------------
<S>                             <C>         <C>     <C>       <C>      <C>      <C>
Horse                           $23,985     34.7%   $29,697   29.9%    $31,202  23.2%

Livestock                        13,604     19.7%    17,789   17.9%    21,468   16.0%

Car and race car/specialty       14,333     20.7%    15,847   15.9%    24,797   18.5%
transporters

Utility and recreational          4,468      6.4%     7,206    7.3%     8,897    6.6%

Commercial                        8,786     12.7%    10,150   10.2%     7,244    5.4%

Motorcoaches                       ----     ----     14,785   14.9%    34,355   25.6%
                                -------------------------------------------------------------

Net Trailer & Motorcoach         65,176     94.3%   $95,474   96.1%  $127,963   95.2%
Sales

Parts, Deliver & Scrap            3,983      5.8%     3,855    3.9%     6,424    4.8%
                                -------------------------------------------------------------

Net Sales                       $69,159    100.0%   $99,329  100.0%  $134,387  100.0%
                                -------------------------------------------------------------

</TABLE>



*Product mix percentages in 1996 and 1997 affected by addition of  motorcoaches.
Prior  year  percentages  differ  from  amounts   previously   reported  due  to
reclassifications made to be consistent with 1997 classifications.

<PAGE>

Trailers

     The Company is unique among trailer manufacturers because of the many types
of trailers it makes. The Company's  FEATHERLITE(R),  FEATHERLITE-STL(R)  series
and DIAMOND D(R) trailers may be broadly  classified into several trailer types,
which can be further subdivided into over 400 models depending on their intended
use and  resulting  design.  The  Company's  primary  trailer  types are  horse,
livestock, utility/recreational, commercial and car trailers as well as race car
and specialty transporters.  Within these broad product categories,  the Company
generally  offers  different  features,  such as various  lengths,  heights  and
widths, open and enclosed models, gooseneck and bumper pulls, straight and slant
loaders,  and aluminum,  steel,  fiberglass and wood frames,  floors,  sides and
roofs. In 1996, the Company discontinued  manufacturing semi trailers which were
included in the commercial category.  The Company believes  FEATHERLITE(R) brand
trailers,  which are "all  aluminum"  with the exception of steel axle and hitch
parts,  enjoy a premier image in the  industry.  Sales of  FEATHERLITE(R)  brand
trailers  currently  represent  over 90% of the Company's  total trailer  sales.
FEATHERLITE-STL(R) series and DIAMOND D(R) brand trailers, which generally are a
composite of steel frame,  aluminum skin and galvanized  roof, allow the Company
to place its product line at the lower-priced end of the market.

     FEATHERLITE(R),  FEATHERLITE-STL(R)  series and DIAMOND  D(R)  trailers are
built as standard models or to customer order from selected  options.  Depending
on the model,  the  Company's  trailers  generally  include  name  brand  tires,

<PAGE>

reflectors  and exterior  running and license plate lights,  sealed and enclosed
wires,  and safety chains and breakaway  switches.  Popular  options to standard
designs  include paint  schemes,  logos,  lettering  and  graphics,  winches and
generators, viewing platforms, workbenches and cabinets, vents and other airflow
designs,  roll-up doors, access and side doors and windows,  aluminum wheels and
hubcaps, and hydraulic or air brakes.

     Trailer design traditionally has been utilitarian.  Recently,  however, the
demand for trailers  with special  amenities  and custom  designed  features has
increased dramatically. For that reason, the Company's Interiors Division offers
options  ranging from simple shelves,  cupboards,  lockers and dressing rooms to
complete living quarters, including upholstered furniture,  electronics, wood or
laminated Formica finishes, air conditioning,  refrigerators,  dinettes and bath
packages.  The Company  stresses its ability and  willingness  to build trailers
"from the ground up" with unique,  even luxurious,  custom designed features and
amenities  tailored to customer  specifications.  This distinguishes the Company
from many other trailer manufacturers.

     In addition to custom designed trailers,  the Company manufactures standard
model  trailers for inventory  which are  available  for  immediate  delivery to
dealers. In an industry  consisting  primarily of manufacturers who custom build
trailers, the Company's introduction in 1991 of standard model aluminum trailers
represented  an  innovative  step.  Standard  model  trailer sales now represent
approximately  40% of the Company's  total trailer sales.  The Company's  dealer
network has enthusiastically endorsed and supported the standard model concept.

     Retail prices for the Company's standard aluminum model trailers range from
approximately $1,200 for the least expensive snowmobile trailer to over $300,000
for a custom  built  race  car  transporter  and  hospitality  trailer  and over
$900,000 for a luxury  coach.  Representative  FEATHERLITE(R)  aluminum  trailer
retail  prices are  approximately  $7,200 for a bumper pull  livestock  trailer,
$8,200 for a two horse trailer, $16,000 for a gooseneck car trailer.

Motorcoaches

     The Company offers three  motorcoaches  based on various models made from a
single bus shell manufacturer (Prevost Car Company), the XL-40 and XL-45 and the
H3-45.  Even  though  the "H"  body  style  is much  taller  and the  layout  is
considerably  different  than a typical  XL  motorcoach,  it has become the most
popular model requested by customers.  The Company also now offers a "slide-out"
model which expands the livable space within the motorcoach.

     The  Company's  goal is to produce the best  performing  and most  reliable
coach while  keeping a low overall  gross weight and extremely low ambient noise
level. It incorporates  into  motorcoaches many of the good features and quality
often  present in luxury  yachts  which  were  previously  developed  by Vantare
International, Inc. when it was in the business of building yachts.

     About 75% of the coaches are built to specific customer order from selected
options.  The remainder are  motorcoaches  which are built for potential  retail
customers and for  demonstration  at particular  shows or events.  Retail prices
range from  $500,000 to $900,000  or more.  There is a risk that  certain of the
coaches  built on a  speculative  basis may not be sold on a timely basis and at
normal profit margins.

     The Company also sells used motorcoaches  which are taken as trade-ins from
customers on new coaches or on a consignment basis. Repair services are provided
for coaches of customers and others at the Vantare facility in Sanford, Florida,
as well as at a Company service center in Mocksville, North Carolina and Cresco,
Iowa.

Other Business Activities

     In addition to the manufacture and sale of specialty trailers,  the Company
sells  replacement and specialty  trailer parts to its dealers and to others. It
coordinates delivery of completed trailers to customers and to dealers for a fee
and in 1997 delivered  approximately  50% of the trailers sold to dealers,  with
the remainder picked up at its Iowa facilities. The Company owns and maintains a
fleet of trucks and leases  semi  tractors  for this  purpose.  The Company is a
licensed  aircraft  dealer  and  believes  that  dealing  in  used  aircraft  is

<PAGE>

complementary  to  its  principal  business.  Featherlite  Aviation  Company,  a
wholly-owned   subsidiary  of  the  Company,   conducts  such  aircraft   dealer
activities.  Featherlite  Aviation Company currently holds for resale three used
aircraft.  The purchase,  sale, use and operation of aircraft and the volatility
in the sales volume and value of  aircraft,  create risks to the Company and its
operating results.  The Company maintains  liability insurance policies relating
to its  aircraft  in an  amount  it  believes  to be  adequate,  but there is no
assurance that its coverage will continue to be available at an acceptable price
or be  sufficient to protect the Company from adverse  financial  effects in the
event of claims.  Gains on  aircraft  sales are  included in other  income.  The
Company's  other  business  activities,  excluding  aircraft,  in the aggregate,
accounted for  approximately  5.8%, 3.9% and 4.8% of the Company's net sales for
1995, 1996 and 1997, respectively.

In  October,  1997,  the  Company  signed  a joint  venture  agreement  with GMR
Marketing to form  Featherlite/GMR  Sports  Group,  LLC. The joint  venture will
focus on developing  promotional events and implementing marketing strategies in
the rapidly growing motorsports industry.

Marketing and Sales

Dealer Network

     The Company  markets its products  primarily  through a network of over 240
full-line dealers and over 900 limited-line dealers located in the United States
and Canada,  and one distributor  serving Alberta and British Columbia,  Canada.
Dealers   typically  handle  only  a  portion  of  the  entire   FEATHERLITE(R),
FEATHERLITE-STL(R)  series and  DIAMOND  D(R)  product  lines and may sell other
steel trailer brands.  Featherlite  volume dealers  exclusively sell Featherlite
aluminum  trailers.  Limited line dealers are not prohibited by their agreements
with the Company  from  selling  other  brands of aluminum  trailers.  No single
dealer represents more than 10% of the Company's net sales. The Company's top 50
dealers  accounted  for  approximately  76%,  54% and 54% of the  Company's  net
trailer sales for 1995, 1996 and 1997,  respectively.  For these periods, 82% or
more of the Company's  trailer sales were made by its dealer  network,  with the
remainder  representing direct Company sales to end users.  Company sales to end
users  are  primarily  drop  deck  trailers,  specialty  trailers  and  race car
transporters.  For these periods,  approximately 98% of the number of units sold
were sold by the dealer network.

     Dealers  sell  FEATHERLITE(R),  FEATHERLITE-STL(R)  series and DIAMOND D(R)
products under contractual  arrangements which can be terminated by either party
on specified  notice.  Laws in certain states govern terms and conditions  under
which  dealers  may be  terminated.  Such  laws  have not  materially  adversely
affected  the Company to date.  Changes in dealers take place from time to time.
The Company  believes that a sufficient  number of  prospective  dealers  exists
across the  United  States and  Canada to permit  orderly  transitions  whenever
necessary. The Company is continually seeking to expand the size and upgrade the
quality of its dealer network.  The Company believes that  significant  areas of
the United  States and Canada are not served by a  sufficient  number of dealers
and the Company intends to increase substantially its number of dealers over the
next several years.

<PAGE>

     The Company employs territory managers to assist in the marketing and sales
process.  These  managers  assist  the  Company's  dealers in  coordinating  the
selection of custom options by customers and the production of orders. They also
participate  with the dealers at trade  shows,  fairs,  rodeos,  races and other
events  to  promote  the  FEATHERLITE(R)  brand.  Factory  representatives  also
actively seek out potential new dealers.

     All  motorcoaches  are  sold  directly  by  Company  personnel  to end user
customers.  Company sales  representatives  participate  in trade shows,  fairs,
motorsports  races and other events to promote the "VANTARE by  Featherlite(TM)"
motorcoach. 

Financing

     A substantial  portion of the Company's sales of motorcoaches  and trailers
are paid for within 10 days of  invoicing.  The  Company has  arrangements  with
NationsCredit   Commercial   Corporation,   Deutsche  Financial  Services  Corp.
(formerly  ITT  Commercial  Finance  Corp.),   Bombardier  Capital,  Green  Tree
Financial Servicing  Corporation and with TransAmerica  Commercial Finance Corp.
to provide  trailer floor plan  financing for its dealers.  Green Tree Financial
Servicing Corporation and Featherlite Credit Corporation, a corporation owned by
certain of the Company's  officers and directors,  provides retail  financing to
end  user   customers  of  the  Company's   dealers.   Under  these  floor  plan
arrangements,  the  Company is required in certain  circumstances  to  guarantee
certain debt, or repurchase for the remaining unpaid balance  including  finance
charges plus costs and expenses,  any repossessed trailers financed through such
arrangements. Although the Company has not been required to make any significant
payments or repurchases to date, there can be no assurance that such obligations
will not, in the future,  adversely impact the Company.  There is no recourse to
the Company on these retail financing arrangements.

     The Company has arrangements with several  companies to provide  motorcoach
retail  financing to end user customers.  There is no recourse to the Company on
these  retail  financing  arrangements.  The Company has a wholesale  floor plan
agreement  with a company to finance a portion of the new and used  motorcoaches
held in inventory.

<PAGE>

Promotion

     The Company's  marketing  activities are designed  primarily to communicate
directly with consumers and to assist with selling and marketing  efforts of the
dealer  network.   The  Company  promotes  its  products  directly  using  print
advertising  in  user  group  publications,   such  as  Quarter  Horse  Journal,
Successful Farming,  Snowmobile,  Sno Goer and National Association of Stock Car
Auto Racing  ("NASCAR")  Winston Cup Series event programs.  A series of product
brochures,  product videotapes and other promotional items are available for use
by the dealers.  The Company also  advertises on television,  primarily on cable
television racing programs.

     The Company promotes its motorcoaches  directly in user group publications,
such as the Family Motorcoaching  Magazine, The Robb Report, The DuPont Registry
and the RV Trader.  In addition,  the Company  participates  in the Family Motor
Coach Association  rallies twice each year, the Tampa RV Show and numerous other
shows  and  rallies  and  is  represented  at  motorsports  events  where  other
Featherlite  products are promoted and where Featherlite  already has a customer
base.

     An example of the Company's specialized niche market promotional efforts is
the motor sports  industry.  Featherlite  currently is the "Official  Trailer of
NASCAR,  CART, IRL, ARCA, ASA, NHRA, World of Outlaws and the Indianapolis Motor
Speedway"  and  Vantare  is the  "Official  Coach"  of  NASCAR,  IRL,  NHRA  and
Sportscar.  Featherlite is the title sponsor of the NASCAR Featherlite Southwest
Tour and the  NASCAR  Featherlite  Modified  Tour,  and a major  sponsor  of the
National Hot Rod Association  ("NHRA").  The 1997 NASCAR  Featherlite  Southwest
Tour is comprised of sixteen  events in various  cities in Arizona,  California,
Nevada and Colorado.  The NASCAR Featherlite  Modified Tour schedule takes place
primarily in the northeastern  United States. The Company expects to continue to
design and build  trailers  to fit the needs of all types of  racing,  including
NASCAR, NHRA,  Automobile Racing Club of America ("ARCA"),  IndyCar,  nostalgic,
sprint car, off road, boat, motorcycle and motocross.

     In addition to the racing  industry,  the Company sponsors or is associated
with  the All  American  Quarter  Horse  Congress,  United  States  Team  Roping
Championship,  the American  Paint Horse  Association  and the National  Western
Livestock  Show as well as various  rodeos and state and local  fairs and expos.
Annually,  Featherlite territory managers attend in excess of 250 races, rodeos,
fairs,  trade shows and other  special  events.  The  Company's  dealers  attend
approximately 1,200 to 1,400 such events each year.

Competition - Specialty Trailers

     The  specialty  trailer  industry is highly  competitive,  especially  with
respect to the most  commonly sold models,  such as one and two horse  trailers.
Competition is based upon a number of factors, including brand name recognition,
quality, price, reliability,  product design features,  breadth of product line,
warranty  and  service.  The  primary  competition  to  FEATHERLITE(R)  aluminum
trailers are steel trailers,  which typically sell for  approximately 30% to 40%
less but are  subject  to rust  and  corrosion  and are  heavier.  There  are no
significant technological or manufacturing barriers to entry into the production
of steel  trailers  and only  moderate  barriers to the  production  of aluminum
trailers.  Because the Company has a broad based product line,  its  competition
varies by product category. There is no single company that provides competition
in all  product  lines.  Certain  of the  Company's  competitors  and  potential
competitors are better  established in segments of the Company's  business.  The
Company's principal competitors, all of which are located domestically,  include
the following:

Trailer Types                            Principal Competitors' Brands
-----------------------------------------------------------------------

Horse and Livestock                4 Star, Barrett, Sooner, Wilson, Sundowner, 
                                   Kiefer Built,  W-W

Utility                            Wells Cargo, PACE, Haulmark

Drop Frame Vans                    Kentucky

Car Trailers and                   HighTech, Competition, Concept, Wells
Race Car Transporters              Cargo, Haulmark, PACE, Sooner

<PAGE>

Competition - Motorcoaches

     The motorcoach industry is highly  competitive,  particularly in XL models,
with seven or more  manufacturers.  Vantare is the dominant  producer of H model
coaches.  Competition  is based  primarily on quality and price  although  other
factors such as brand name, reliability,  design features,  warranty and service
are also important.  The brand names of the Company's  principal  competitors in
this industry,  all of which are located  domestically,  include,  among others:
Marathon, Liberty, Country Coach, Angola, Monaco, Vogue and Custom.

Manufacturing

     The  Company  manufactures  substantially  all of its  trailers  at  plants
located in Cresco,  Nashua  and  Shenandoah  Iowa.  It has  agreements  with two
companies to manufacture  certain  trailers.  Under the agreements,  the Company
supplies  trailer  materials  and  specifications  to those  manufacturers.  The
manufacturers,  which are prohibited from  manufacturing  trailers for any other
entities without  Featherlite's  consent,  cover labor and overhead expenses and
manufacture the trailers for contractually agreed upon prices.
Such trailers constituted approximately 3% of net trailer sales for 1997.

     Except for tires,  brakes,  couplers,  axles and  various  other  purchased
items,  the Company  fabricates its component  parts for its trailers.  Most raw
materials and standard parts, including aluminum extrusions and sheet metal, are
available from multiple  sources.  Prices of aluminum,  the principal  commodity
used in the Company's business,  fluctuate daily in the open market. The Company
has obtained  fixed price  contracts  from suppliers for 1998 to reduce the risk
related  to  fluctuations  in the cost of  aluminum.  There is a risk to  future
operating  results if the Company is unable to obtain fixed  contracts to reduce
the affect of fluctuations in the price of aluminum.

     The Company presently purchases  substantial amounts of aluminum extrusions
from two major  suppliers,  Alumax  Extrusions Inc. and Easco Aluminum,  and the
majority of its sheet metal from two large suppliers,  Reynolds Aluminum Co. and
Samuel  Whittar.  The  identity  of  particular  suppliers  and  the  quantities
purchased from each varies from period to period. The Company has not engaged in
hedging or the purchase and sale of future  contracts  other than  contracts for
delivery to fill its own needs. The Company has contracts with suppliers to fill
a substantial part of its projected need for aluminum in 1998. In the event that
one or more of the Company's  suppliers  were unable to deliver raw materials to
the Company for an extended period of time, the Company's production and profits
could be materially and adversely affected if an adequate  replacement  supplier
could not be found  within a  reasonable  amount of time.  The Company has never
been unable to obtain an adequate  supply of raw materials.  Increases in prices
of aluminum and other  supplies  may  adversely  affect  sales of the  Company's
products.

     In addition to obtaining long term contracts  from  suppliers,  the Company
may in the future also try to reduce the price risk  associated with aluminum by
buying London Metal  Exchange  hedge  contracts or options for future  delivery.
These  contracts  would  "lock  in"  the  aluminum  cost  for  the  Company  for
anticipated  aluminum  requirements during the periods covered by the contracts.
There is a potential  risk of loss related to such  contracts if the quantity of
materials hedged significantly exceeds the Company's actual requirements and the
contract is closed without taking physical  delivery of the aluminum or if there
is a  substantial  drop in the actual  cost of aluminum in relation to the hedge
contract  price  which  would  effect  the  competitive  price of the  Company's
product.

     In the  manufacturing  process,  the Company  seeks to maximize  production
efficiency  by  using  weekly  production  schedules  which  allocate  scheduled
trailers to specific  production lines within each plant. The Company  generally
follows a build-to-order policy to control inventory levels. If orders cannot be
filled from any  inventory  maintained  by the Company,  they are  scheduled for
production.  Inventory  trailers may be scheduled to maximize the  efficiency of
the production lines. The Company also utilizes certain  production lines solely
for standard model trailers.

     The Company  manufactures  all of its  motorcoaches at its plant located in
Sanford,  Florida. Except for the coach shell and electronic equipment,  various
kitchen and bathroom  fixtures and accessories and other  purchased  items,  the
Company fabricates all the components for its coaches. The Company completes the
conversion by finishing  the interior of the  purchased  shell to the layout and
design  requirements  of  the  customer  or  its   specifications.   All  design
engineering,  plumbing,  cabinetry and upholstery required to complete the coach
is done by company personnel.

<PAGE>

     The Company purchases its motorcoach shells from one manufacturer,  Prevost
Car Company, Inc. of Sainte-Claire,  Quebec, Canada,  although the Company could
purchase certain shells from other manufacturers.  The Company does not have any
long or short term manufacturing  contracts with Prevost.  However,  the Company
provides Prevost with its estimated yearly motorcoach requirements. Once Prevost
releases an order to production, Prevost becomes obligated to fill the order and
the  Company  becomes  obligated  to take  delivery  of the order.  In the event
Prevost was unable to deliver  motorcoach  shells to the Company,  the Company's
revenues and profits could be materially and adversely affected. 

Backlog

     At December 31, 1997,  the Company had unfilled  confirmed  orders from its
customers in the amount of approximately  $27 million,  including $14 million in
motorcoach  orders, and $28 million,  including $16 million in motorcoaches,  at
December  31,  1996.  All orders at December  31, 1997 are expected to be filled
during 1998.

Quality Assurance

     The  Company  monitors  quality  at  various  points  of the  manufacturing
process. Due to the variety of custom products that the Company builds, employee
skill training and individual  responsibility  for  workmanship  are emphasized.
Inventory  specialists  assess the overall  quality,  physical  dimensions,  and
imperfections or damage to the raw materials.  Extruded and sheet aluminum which
is outside of specified  tolerances is rejected and replaced by the vendor. Line
foremen train and monitor work cells of employees.  Quality  control  inspectors
inspect trailers for quality of workmanship,  material quality and conformity of
options to order specifications.

Government and Industry Regulation

     The Company and its products are subject to various foreign, federal, state
and local laws,  rules and  regulations.  The Company  builds its  trailers  and
motorcoaches  to  standards of the federal  Department  of  Transportation.  The
Company  is a  member  of the  National  Association  of  Trailer  Manufacturers
("NATM") and manufactures its trailers to NATM standards.  The quality assurance
program  in the  Company's  Interiors  Division  includes  being a member of the
Recreational  Vehicle Industry  Association  ("RVIA"),  which requires plumbing,
electrical  and gas testing on trailers  with living  quarters.  These tests are
recorded  before  RVIA  certification  numbers  are  affixed to  trailers.  RVIA
inspectors  periodically  check the production  facility and work in progress to
assure that codes and procedures are met.  Infractions can lead to fines or loss
of RVIA  membership.  The Company is also  governed by  regulations  relating to
employee  safety and working  conditions and other  activities.  A change in any
such laws, rules,  regulations or standards, or a mandated federal recall by the
National  Highway  Transportation  Safety Board,  could have a material  adverse
effect on the Company.

Patents and Trademarks

     The  Company  has  registered  FEATHERLITE(R)  as a  trademark  for  use in
conjunction with trailers in the United States,  Canada and Germany. In general,
such registrations are effective through the year 2001, with continuous ten-year
renewal  periods  thereafter.  The Company has a United  States  trademark  with
respect to FEATHERLITE-STL(R)  series. In October 1995, the Company acquired the
rights to the DIAMOND D(R) trademark and has registered it as a trademark in the
United States and has a trademark  application  pending in Canada.  In 1993, the
Company  purchased  the  rights to two  design  patents,  which  expire in 1997,
relating to the V-nose design of certain of its horse,  livestock and snowmobile
trailers.  The Company believes that the patented  designs are useful,  but that
the expiration of the patents will not have a material effect on the Company. In
addition,  the Company has filed for certain  trailer design and utility patents
relating to race car transporters.

     The Company  has a trademark  for  "VANTARE by  Featherlite(R)"  for use in
conjunction with motorcoaches and yachts in the United States.

Warranty

     The Company  warrants the workmanship and materials of certain parts of the
main frame of its aluminum trailers under a limited warranty for a period of six

<PAGE>

years and such parts of certain other Company trailers as well as other products
manufactured  by the  Company  for  periods of one to four  years.  The  limited
warranty does not include normal wear items, such as brakes, bearings and tires.
The  Company's  warranty  obligations  are  expressly  limited  to  repairs  and
replacement of parts. Historically,  there have been no recalls of the Company's
trailers  for  replacement  of major  components  or parts  and the  expense  of
warranty claims for repairs or replacement of parts has been less than 1% of the
Company's net sales.

     The Company warrants for one year the workmanship and materials  related to
certain parts of the motorcoach conversion.  Otherwise, warranties applicable to
components   purchased  from  vendors  are  applicable.   The  warranty  of  the
manufacturer of the shell generally is for two years.

Product Liability

     Although the Company has never been required to pay any significant  amount
in a product liability  action,  as a manufacturing  company it is subject to an
inherent  risk of  product  liability  claims.  The  Company  maintains  product
liability insurance policies in an amount it believes is adequate,  but there is
no assurance  that its coverage  will  continue to be available at an acceptable
price or be sufficient to protect the Company from adverse  financial effects in
the event of product liability claims.

Employees

     As of December 31, 1997, the Company had 1,333 employees, of whom 1,312 are
full-time and 21 are part-time as follows:  Production and production  support -
1,243, Sales and Marketing - 48, and Administration - 42.

     The  Company  is not a party to any  collective  bargaining  agreement  and
believes that it has good working relationships with its employees.

     The  Company's  success  is  highly  dependent  on its  senior  management,
including Conrad D. Clement, President and Chief Executive Officer. During 1997,
the responsibilities  held by Michael Guth, President of the Vantare Division of
Featherlite  were assumed by Norm Allen,  a vice president of  Featherlite.  Mr.
Guth will  concentrate  on customer  relations,  design  innovation  and product
development.  The loss of Mr.  Clement's  services could have a material adverse
affect on the Company's business and development. There can be no assurance that
an  adequate  replacement  could be found  for Mr.  Clement  in the event of his
departure.  The Company does not carry any key man life  insurance on any of its
officers or employees.

     The Company has two separate  agreements with Iowa community colleges which
provided approximately $620,000 for job training purposes. The amounts are to be
repaid,  together with interest,  over a ten year period from state  withholding
taxes on employees at the Company's Iowa facilities. The Company may be required
to provide  funds for the  repayment  of these  training  credits if  sufficient
withholding  and unused  training funds are not available.  

Former S Corporation Status

     From  February 1, 1989 to September  27, 1994,  the Company was treated for
federal income tax purposes as an S corporation  under the Internal Revenue Code
of 1986,  as amended,  and was treated on a similar  basis for state  income tax
purposes under  comparable state tax laws. As a result,  the Company's  earnings
from such period were, for federal and certain state income tax purposes,  taxed
directly  to  the  Company's  shareholders  rather  than  to  the  Company.  The
termination date of the Company's S corporation  status occurred upon completion
of the Company's initial public offering.

     The Company  historically made distributions to its shareholders in amounts
approximately   equal  to  the  shareholders'   federal  and  state  income  tax
liabilities  arising from the Company's status as an S corporation.  The amounts
of these cash  distributions  were  $1,795,000  and  $305,000  in 1994 and 1995,
respectively.  The 1995 payment was accrued at December 31, 1994 and  represents
the final distribution to be made to S corporation shareholders.

<PAGE>

Cautionary Statements

     Featherlite wishes to caution readers that the following important factors,
among  others,  in some cases have  affected,  and in the future  could  affect,
Featherlite's  actual results and could cause Featherlite's  actual consolidated
results  to  differ  materially  from  those  expressed  in any  forward-looking
statements made by, or on behalf of, Featherlite:

A moderating  growth rate in the overall  demand or in specific  market  segment
demand, in the US and to some extent Canada,  for existing models of aluminum or
steel  specialty  trailers and  motorcoaches  manufactured by Featherlite and in
acceptance by the market of new trailer models and luxury coaches  introduced by
Featherlite;  and general or specific economic conditions,  pricing, purchasing,
operational,  advertising and  promotional  decisions by  intermediaries  in the
distribution  channels,  which could  affect their supply or end user demand for
Featherlite products;

Increased  competition  from  competitors and potential  competitors  which have
greater financial and other resources than Featherlite; and competitors that are
better established in segments of Featherlite's business;

Fluctuation  in  aluminum  prices;  inability  of a major  supplier  of aluminum
extrusion or sheets utilized by Featherlite to deliver raw materials on a timely
basis;

Inability of motorcoach shell  manufacturer to deliver shells on a timely basis;
inability to sell motorcoaches made on a spec basis at normal profit margins;

The effects of changes within Featherlite's organization,  including the loss of
the services of key  management  personnel,  particularly  Mr.  Conrad  Clement,
President and Chief Executive Officer.

Continued  availability  of adequate  financing and cash flow from operations to
support operations and expansion plans,  including the amount,  type and cost of
financing which Featherlite has and changes to that financing;

Continued pressure to increase the selling prices for Featherlite's  products to
reduce the impact on margins of increasing  aluminum and other materials  costs,
labor rates and overhead costs related to the expanded production facilities and
organization  to  support  expected  increases  in  sales;  underutilization  of
Featherlite's  manufacturing facilities,  resulting in production inefficiencies
and higher costs;

The inability to obtain adequate insurance coverage at an acceptable price or in
a sufficient  amount to protect  Featherlite from the adverse effects of product
and other liability claims;

The risks  related  to being a  licensed  aircraft  dealer  which  deals in used
business aircraft,  including the purchase, sales, use and operation of aircraft
and the volatility in the sales volume and value of aircraft;

Payments or  repurchases  by  Featherlite  related to  guarantees of debt or the
repurchase of trailers under certain circumstances in connection with dealer and
retail product financing arrangements;

The costs and other effects of legal and  administrative  cases and  proceedings
(whether  civil,  such  as  environmental  and  product-related,  or  criminal),
settlements and investigations, claims and changes in those items;

A change  in  foreign,  federal,  state and local  laws,  rules and  regulations
related to Featherlite, its products, or activities.

ITEM 2.  PROPERTIES

     The Company's principal sales,  marketing and executive offices are located
in a recently  completed  20,000 square foot building  owned by the Company near
Cresco,  Iowa.  Adjacent to it is a Company-owned  50,000 square foot (including
20,000 added in 1997) parts  distribution  center and a rework,  maintenance and
trailer distribution  facility,  from which substantially all trailer deliveries
to dealers are made.

     The Company has production and warehouse  facilities in Cresco,  Nashua and
Shenandoah,  Iowa. The Cresco facilities presently consist of five buildings and

<PAGE>

include   approximately  238,000  square  feet  including  140,000  square  foot
expansion  completed  in March 1995.  Three  buildings,  totaling  approximately
136,000  square  feet of Company  owned  space and 30,000  square feet of leased
space,  are used for production of trailers and  fabrication  of  components.  A
58,000 square foot building is used,  pursuant to a lease,  for custom  interior
finishing and a 14,000 square foot building, which the Company owns, is used for
storage  of raw  materials.  In 1998,  the  Company  plans to build a  warehouse
facility for raw material  storage at its Cresco location at an approximate cost
of $1.8 million which will be financed with new borrowings.

     The  Shenandoah  facilities  include a 117,000  square  foot  manufacturing
facility   acquired  in  October  1995  in  connection  with  the  DIAMOND  D(R)
acquisition.  All of  the  assets  of  DIAMOND  D  Trailer  Manufacturing  Inc.,
including the office and production  facilities  were purchased for $2.4 million
in cash.  The  consideration  paid was based  primarily on the book value of the
acquired assets on the date of purchase.  The  Company-owned  Nashua  facilities
include a 51,000 square foot manufacturing plant and an 18,000 square foot plant
office  building.  The  Company  also  owns  three  buildings  in Grand  Meadow,
Minnesota   that   were   used   as   the   Company's   corporate   office   and
rework/distribution  center prior to the relocation of these  activities to Iowa
in 1993. The Company currently is attempting to sell the Grand Meadow facilities
which are being  leased on a short term basis to offset  real  estate  taxes and
other costs of holding the property.

     In July 1996, the Company  acquired  office and  production  facilities and
other assets of Vantare International, Inc. in Sanford, Florida. (See Note 10 to
financial statement). This facility includes approximately 55,000 square feet of
production  and  office  space  and  is  used  for  the  manufacture  of  luxury
motorcoaches.  This  facility is owned by Seminole  Port  Authority and is being
leased by the Company under the terms of an operating  lease.  These  facilities
were  expanded in 1997 to add 24,000  square feet to the  production  and office
space as well as 6,000 square feet for outside service bays. The outside parking
area was also improved and vacant land near the Vantare facilities was purchased
for  future  expansion,  possibly  beginning  in late 1998 or early 1999 on some
phases.  The  Company's  profit  margins  will  depend in part on its ability to
increase  unit sales volume to fully  utilize its new  facilities  and integrate
operations efficiently.

     In the  future,  the  Company may  determine  to build or acquire  existing
manufacturing  facilities  outside of  Northeastern  Iowa,  which  would  create
additional risks to the Company's ability to manage growth.

<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

     The Company in the course of its  business has been named as a defendant in
various legal actions.  Most, but not all, of such actions are product liability
or workers'  compensation  claims in which the  Company is covered by  insurance
subject to applicable deductibles.  Although the ultimate outcome of such claims
cannot be  ascertained  at this time,  it is the  opinion of  management,  after
consultation  with  counsel,  that the  resolution of such suits will not have a
material  adverse  effect on the  financial  position  of the Company but may be
material to the Company's operating results for any particular period.

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

     No matter  was  submitted  during the  fourth  quarter  of the fiscal  year
covered by this report to a vote of security holders.


                      EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth certain information concerning the executive
officers of the Company:

Name of
Executive Officer       Age      Present Position with Company
--------------------------------------------------------------------------------
Conrad D. Clement       54       President, Chief Executive Officer and Director
Jeffery A. Mason        57       Chief Financial Officer and Director
Tracy J. Clement        31       Executive Vice President and Director
Gary H. Ihrke           51       Vice President of Operations & Secretary
Eric P. Clement         28       Vice President of Sales
Steven J. Sheldon       47       Vice President of Market Development
Larry D. Clement        52       Treasurer

     The term of office of each executive  officer is from one annual meeting of
directors  until the next annual  meeting of  directors  or until a successor is
elected.

     The business  experience  of the  executive  officers  during the past five
years is as follows:

     Conrad D.  Clement has been the  Chairman,  President  and Chief  Executive
Officer and a director of the Company since its inception in 1988.  From 1969 to
1988,  Mr.  Clement  was the  President  and  principal  owner of  several  farm
equipment and  agricultural  businesses.  Mr.  Clement is also the President and
Chief Executive Officer and a shareholder of Featherlite Credit Corporation,  an
affiliate of the Company ("Featherlite  Credit").  Mr. Clement is the brother of
Larry D. Clement and the father of Tracy J. Clement and Eric P. Clement.

     Jeffery A. Mason has been the Chief Financial Officer and Controller of the
Company  since  August 1989 and has been a director  of the  Company  since June
1993.  From 1969 to 1989,  Mr.  Mason  served in  various  financial  management
capacities with several  companies,  including Arthur Andersen & Co. and Carlson
Companies. Mr. Mason is a certified public accountant.

     Tracy J. Clement has been  Executive  Vice  President and a director of the
Company since 1988.  Prior to 1988, Mr. Clement was a shareholder and manager of
several farm equipment and  agricultural  businesses with his father,  Conrad D.
Clement. Mr. Clement is also an officer and shareholder of Featherlite Credit.

     Gary H. Ihrke was appointed  Secretary in August 1996 and Vice President of
Operations in March 1996 after service as Vice President of Manufacturing  since
June 1993 and was  previously  a director of the  Company.  From January 1989 to
June 1993,  Mr.  Ihrke was the General  Manager of the  Company's  Cresco,  Iowa
facilities.  From 1969 to 1989, he served as general  manager and branch manager
of an agricultural equipment manufacturing company.

<PAGE>

     Eric P.  Clement  has been Vice  President  of Sales since March 1996 after
service as Vice President of Operations  since January 1991 and was previously a
director of the Company.  Prior to that time, Mr. Clement  attended  college and
worked part time for  businesses  owned by his father,  Conrad D.  Clement.  Mr.
Clement is also an officer and shareholder of Featherlite Credit.

     Steven J. Sheldon has been Vice President of Market Development since March
1996 after service as Vice President of Sales since June 1993 and was previously
a director of the Company.  From 1988 to June 1993,  he was the  national  sales
manager of the Company.

     Larry D.  Clement  has been  Treasurer  of the  Company  since 1988 and was
previously  secretary and a director of the Company.  He has also been the owner
and President of several auto and truck  dealerships  since 1971. Mr. Clement is
the  President  and  Secretary of Clement Auto & Truck,  Inc., a  FEATHERLITE(R)
dealer. Mr. Clement is the brother of Conrad D. Clement.


<PAGE>


                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The information  required by Item 5 is incorporated  herein by reference to
the section labeled  "Corporate  Information" and "Financial  Information" which
appears in the Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1997.

ITEM 6.  SELECTED FINANCIAL DATA

     The information  required by Item 6 is incorporated  herein by reference to
"Selected Financial Information" which appears in the Company's Annual Report to
Shareholders for the fiscal year ended December 31, 1997.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

     The information  required by Item 7 is incorporated  herein by reference to
the section labeled "Management's  Discussion and Analysis" which appears in the
Company's  Annual Report to Shareholders  for the fiscal year ended December 31,
1997.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information  required by Item 8 is incorporated  herein by reference to
the consolidated  financial statements,  notes thereto and Independent Auditors'
Report thereon which appear in the Company's  Annual Report to Shareholders  for
the fiscal year ended December 31, 1997.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

     Other than "Executive Officers of the Registrant" which is set forth at the
end of  Part I of  this  Form  10-K,  the  information  required  by  Item 10 is
incorporated  herein by reference to the section labeled "Election of Directors"
which appears in the Company's  definitive  Proxy  Statement for its 1998 Annual
Meeting of Shareholders.

ITEM 11.   EXECUTIVE COMPENSATION

     The information  required by Item 11 is incorporated herein by reference to
the section  labeled  "Executive  Compensation"  which  appears in the Company's
definitive Proxy Statement for its 1998 Annual Meeting of Shareholders.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  required by Item 12 is incorporated herein by reference to
the sections labeled  "Principal  Shareholders"  and "Management  Shareholdings"
which appear in the  Company's  definitive  Proxy  Statement for its 1998 Annual
Meeting of Shareholders.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required by Item 13 is incorporated herein by reference to
the  section  labeled  "Certain  Transactions"  which  appears in the  Company's
definitive Proxy Statement for its 1998 Annual Meeting of Shareholders.

<PAGE>

                                     PART IV

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

         (a)      Documents filed as part of this report:

                  (1)  Consolidated Financial Statements:
                                                                           Page

                       Report of Independent Auditor                          *
                       Balance Sheets at December 31, 1997 and 1996           *
                       Statements of Operations for each of the years
                         ended December 31, 1997, 1996 and 1995               *
                       Statements of Cash Flows for each of the years
                         ended December 31, 1997, 1996 and 1995               *
                       Statements of Shareholders' Investment for each
                         of the years ended December 31, 1997, 1996 and 1995  *
                       Notes to Consolidated Financial Statements             *

                  (2)  Financial Statement Schedules:

                       None

                  (3)  Exhibits.  See Exhibit Index on page following 
                       signatures.

         (b)      Reports on Form 8-K.  No reports on Form 8-K have been filed 
                  during the last quarter of the period  covered by this report.





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

*Incorporated  by reference to the Company's  Annual Report to Shareholders  for
the fiscal year ended  December 31, 1997, a copy of which is included  with this
Form 10-K as Exhibit 13.

<PAGE>


SIGNATURES

     In  accordance  with  the  requirements  of  Section  13 or  15(d)  of  the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.


                                          FEATHERLITE MFG., INC.

                                          By:/s/ Conrad D. Clement
                                          Conrad D. Clement
Date:  March 20, 1998                     President and Chief Executive Officer


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

                                POWER OF ATTORNEY

     Each person whose signature appears below constitutes CONRAD D. CLEMENT and
TRACY J. CLEMENT his true and lawful  attorneys-in-fact  and agents, each acting
alone,  with full power of substitution and  resubstitution,  for him and in his
name, place and stead, in any and all capacities,  to sign any or all amendments
to this  Annual  Report  on Form 10-K and to file the  same,  with all  exhibits
thereto,  and other documents in connection  therewith,  with the Securities and
Exchange  Commission,  granting  unto said  attorneys-in-fact  and agents,  each
acting alone,  full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,  as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming  all said  attorneys-in-fact  and agents,  each acting alone,  or his
substitute  or  substitutes,  may  lawfully  do or  cause  to be done by  virtue
thereof.

Signature                     Title                                    Date
--------------------------------------------------------------------------------

/s/ Conrad D. Clement         President, Chief Executive          March 20, 1998
Conrad D. Clement             Officer and Director (Principal
                              Executive Officer)

/s/ Jeffery A. Mason          Chief Financial Officer and         March 20, 1998
Jeffery A. Mason              Director (Principal Financial
                              and Accounting Officer)

/s/ Tracy J. Clement          Executive Vice President and        March 20, 1998
Tracy J. Clement              Director

/s/ Donald R. Brattain        Director                            March 20, 1998
Donald R. Brattain

/s/ Thomas J. Winkel          Director                            March 20, 1998
Thomas J. Winkel

/s/ Kenneth D. Larson         Director                            March 20, 1998
Kenneth D. Larson

/s/ John H. Thomson           Director                            March 20, 1998
John H. Thomson

<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            -------------------------

                                  EXHIBIT INDEX
                                       TO
                         FORM 10-K FOR FISCAL YEAR ENDED
                                DECEMBER 31, 1997
                            -------------------------

                             FEATHERLITE MFG., INC.


     EXHIBIT
     NUMBER                                          DESCRIPTION

     2.2  Agreement  and Plan of  reorganization  dated July 1, 1996,  among the
          Registrant,   Vantare   International,   Inc.   and  Michael  Guth  --
          incorporated  by  reference  to  Exhibit 2 to the  Company's  Form 8-K
          filing  dated July 1, 1996*

     2.3  Amendment to Agreement and Plan of Reorganization  between Registrant,
          Vantare International, Inc. and Michael Guth dated December 30, 1996

     3.1  The Company's Articles of Incorporation, as amended -- incorporated by
          reference to Exhibit 3.1 to Company's S-1 Registration Statement, Reg.
          No. 33-82564*

     3.2  The  Company's  Bylaws,  as amended --  incorporated  by  reference to
          Exhibit  3.2  to  Company's  S-1  Registration  Statement,   Reg.  No.
          33-82564*

     4.1  Specimen  Form  of  the   Company's   Common  Stock   Certificate   --
          incorporated by reference to Exhibit 4.1 to Company's S-1 Registration
          Statement, Reg. No. 33-82564*

    10.2**1994 Stock Option  Plan,  including  Form of Incentive  Stock Option
          Agreement  --  incorporated  by reference to Exhibit 10.2 to Company's
          S-1 Registration Statement, Reg. No. 33-82564*

   10.10  Industrial  New  Jobs  Training  Agreement  between  the  Company  and
          Northeast  Iowa  Community  College --  incorporated  by  reference to
          Exhibit  10.10 to  Company's  S-1  Registration  Statement,  Reg.  No.
          33-82564*

   10.11  Industrial  New  Jobs  Training  Agreement  between  the  Company  and
          Hawkeye  Institute  of  Technology  --  incorporated  by  reference to
          Exhibit  10.11 to  Company's  S-1  Registration  Statement,  Reg.  No.
          33-82564*

   10.12  Inventory Repurchase Agreement,  dated September 12, 1990, between the
          Company and NationsCredit  Commercial  Corporation  (formerly Chrysler
          First Commercial  Corporation Limited) -- incorporated by reference to
          Exhibit  10.12 to  Company's  S-1  Registration  Statement,  Reg.  No.
          33-82564*

   10.13  Floorplan  Agreement,  dated March 27,  1992,  between the Company and
          ITT Commercial  Finance Corp. --  incorporated by reference to Exhibit
          10.13 to Company's S-1 Registration Statement, Reg. No. 33-82564*

   10.15  Agreement,  effective January 1, 1995, between the Company and Polaris
          Industries,  L.P.  --incorporated  by  reference  to Exhibit  10.15 to
          Company's Form 10-K for the fiscal year ended December 31, 1994*

   10.16  Inventory  Repurchase  Agreement,  dated  February 27,  1995,  between
          Featherlite Mfg., Inc. and TransAmerica Commercial Finance Corporation
          --  incorporated  by reference to Exhibit 10.23 to Company's Form 10-K
          for the fiscal year ended December 31, 1995*

   10.17  Agreement  between  Featherlite  Mfg.,  Inc.  and  Featherlite  Credit
          Corporation --  incorporated by reference to Exhibit 10.2 to Company's
          10-Q for the quarter ended June 30, 1996*
       
   10.19  Agreement  dated  August  1,  1996  between  the  Company  and  Dolton
          Aluminum.  --  incorporated  by reference to Exhibit 10.1 to Company's
          10-Q for the quarter ended September 30, 1996*

<PAGE>

   10.20  Agreement  dated  August  1,  1996  between  the  Company  and  Alumax
          Extrusions,  Inc. --  incorporated  by  reference  to Exhibit  10.2 to
          Company's 10-Q for the quarter ended September 30, 1996*
      
   10.21  Amended and restated Credit and Security  Agreement dated December 30,
          1996 between  Featherlite  Mfg., Inc. and Firstar Bank -- incorporated
          by  reference to Exhibit  10.21 to Company's  10-K for the fiscal year
          ended December 31, 1996.*

   10.22  Agreement  for  wholesale  financing  dated  October  3, 1996  between
          Deutsche Financial Services and Featherlite Mfg., Inc. -- incorporated
          by  reference to Exhibit  10.22 to Company's  10-K for the fiscal year
          ended December 31, 1996.*

   10.23**Amendment  to  1994  Stock  Option  Plan  dated  May  14,  1996 --
          incorporated  by reference to Exhibit 10.23 to Company's  10-K for the
          fiscal year ended December 31, 1996.*

   10.24  Agreement  dated  August 26, 1996  between  the  Company and  Reynolds
          Aluminum --  incorporated  by reference to Exhibit  10.24 to Company's
          10-K for the fiscal year ended December 31, 1996.*
        
   10.25  Agreement  dated  September  13,  1996  between the Company and Samuel
          Whittar  Inc.  --  incorporated  by  reference  to  Exhibit  10.25  to
          Company's 10-K for the fiscal year ended December 31, 1996.*
        
   10.26  Agreement  dated  November  27,  1996  between  the Company and Dolton
          Aluminum --  incorporated  by reference to Exhibit  10.26 to Company's
          10-K for the fiscal year ended December 31, 1996.*

   10.27  Agreement  dated  November  27,  1996  between  the Company and Alumax
          Transportation  Products -- incorporated by reference to Exhibit 10.27
          to Company's 10-K for the fiscal year ended December 31, 1996.*

   10.28  First Amendment to Amended and Restated Credit and Security  Agreement
          -- incorporated by reference to Exhibit 10.1 to Company's 10-Q for the
          quarter ended June 30, 1997.*

   10.29  Second   Amendment  to  Amended  and  Restated   Credit  and  Security
          Agreement--  incorporated  by  reference  to Exhibit 10.1 to Company's
          10-Q for the quarter ended September 30, 1997.*

   10.30  Agreement  dated October 16, 1997 with Tifton Aluminum  Company,  Inc.
          -- incorporated by reference to Exhibit 10.2 to Company's 10-Q for the
          quarter ended September 30, 1997.*

   10.31  Agreement dated October 15, 1997 with EASCO  Aluminum,  Dolton Works--
          incorporated  by reference  to Exhibit 10.3 to Company's  10-Q for the
          quarter ended September 30, 1997.*

   10.32  Agreement   dated   October  22,   1997  with  Alumax   Transportation
          Products-- incorporated by reference to Exhibit 10.4 to Company's 10-Q
          for the quarter ended September 30, 1997.*

     13   Portions of annual  report to  shareholders  for the fiscal year ended
          December 31, 1997 incorporated as reference in this Form 10-K

     21   Subsidiaries of the Company:
                                                   State of
          Name                                   Incorporation
          ------------------------------------------------------
          Featherlite Aviation Company              Minnesota

     23   Consent of Independent Auditors

     24   Powers of Attorney of directors-- included under the "Signatures" 
          section of this Form 10-K

     27   Financial Data Schedule (filed in electronic format only)

----------------
*Incorporated  by reference to a previously  filed  document or report (File
#0-24804, unless otherwise indicated).
**Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this form 10-K.