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, 1996                                          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. X

     The aggregate  market value of the Common Stock held by  non-affiliates  of
the  registrant as of March 18, 1997,  was  $18,563,000  (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 18, 1997:
6,255,000.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of 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, 1996 - Part II; (2) Proxy  statement  for 1997
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 600 limited-line  utility dealers located
in the United  States and  Canada.  Its  product  lines vary from an  eight-foot
livestock trailer to a specially  designed trailer which houses a rare traveling
museum  exhibition or a custom  designed  trailer to transport race cars,  spare
parts, tools and work shops of race car owners and drivers.

     In 1996,  the Company  began  manufacturing  and  marketing a custom luxury
motorcoach  primarily  through the acquisition of Vantare  International,  Inc.,
which is among the leaders  and  fastest  growing  companies  in the  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  that  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(TM)  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 introduce
new and innovative designs.  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  simple,  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. 

     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.  Featherlite intends to
expand its promotional activities as the Company enters new markets.

<PAGE>

Specialty Trailer and Motorcoach Industries

     The company  operates in two principal  industries  and business  segments:
specialty  trailers and  motorcoaches,  as  discussed  in the  sections  labeled
"Management's  Discussion and Analysis" which appears in Company's Annual Report
to  Shareholders  for the year ended  December  31,  1996 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.

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 of 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 by 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 ten or more companies in this industry.

<PAGE>

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(TM)".  In addition,  the Company manufactures and sells
combination  steel and aluminum  trailers under its  FEATHERLITE-STL(TM)  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.  The Company and an affiliate provide
dealer  and  retail  product  financing.  For  1996,  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 sales by
product type in 1994, 1995 and 1996 (dollars in thousands):

<TABLE>
<CAPTION>


                                                                 Years ended December 31
                                           1994                           1995                           1996
                                   Amount         Percent         Amount         Percent        Amount         Percent*

<S>                                <C>             <C>            <C>             <C>           <C>              <C>
Horse                              $21,179         37.3%          $23,985         36.8%         $29,697          31.1%
Livestock                           14,590         25.7%           13,604         20.9%          17,789          18.6%
Car and race car
 transporters                        9,237         16.3%           14,333         22.0%          15,847          16.8%
Utility and                          2,600          4.5%            4,468          6.9%           7,206           7.5%
 recreational
Commercial and semi                  9,229         16.2%            8,786         13.4%          10,150          10.6%
Motorcoaches                          ---           ---              ---           ---           14,785          15.5%
Net Trailer &
 Motorcoach Sales                  $56,835        100.0%          $65,176        100.0%         $95,474         100.0%

</TABLE>

*Product mixed percentages in 1996 affected by addition of motorcoaches.

Trailers

     The Company is unique among trailer manufacturers because of the many types
of trailers it makes. The Company's FEATHERLITE(R),  FEATHERLITE- STL(TM) 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 and cargo,  snowmobile  and car trailers as well as race car
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.  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 82% of
the Company's total trailer sales.  FEATHERLITE-STL(TM)  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(TM)  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,
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,  rollup doors,  access and side doors and windows,  aluminum wheels and
hubcaps, and hydraulic or air brakes.

<PAGE>

     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, and $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 and which were  previously  developed by Vantare
International, Inc. when it was in the business of building yachts.

     All coaches are built to customer order from selected  options,  except for
show  motorcoaches  which are built for  demonstration  and resale  purposes  at
particular  shows or events.  Retail  prices range from  $500,000 to $900,000 or
more.

     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 and luxury
motorcoaches,  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 1996  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  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.  The  Company's
other business activities,  in the aggregate,  accounted for approximately 5.6%,
5.8% and 3.9% of the Company's net sales for 1994, 1995 and 1996, respectively.

<PAGE>

Marketing and Sales

Dealer Network

     The Company  markets its products  primarily  through a network of over 240
full-line  dealers  and over 600  limited-line  utility  dealers  located in the
United States and Canada,  one distributor  serving the southeast  region of the
United States, and one distributor serving Alberta and British Columbia, Canada.
Dealers   typically  handle  only  a  portion  of  the  entire   FEATHERLITE(R),
FEATHERLITE-STL(TM)  series and DIAMOND  D(R)  product  lines and may sell other
steel trailer brands. Featherlite dealers are not prohibited by their agreements
with the Company from selling other brands of aluminum trailers but generally do
not do so. No single dealer represents more than 10% of the Company's net sales.
The Company's top 50 dealers accounted for approximately 74%, 76% and 54% of the
Company's net trailer  sales for 1994,  1995 and 1996,  respectively.  For these
periods,  79% 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.  The  Company  does not sell  direct  its  horse and
livestock trailers. For these periods,  approximately 97% of the number of units
sold were sold by the dealer network.

     Dealers and distributors sell  FEATHERLITE(R),  FEATHERLITE-STL(TM)  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 and  distributors  may be terminated.  Such laws
have not materially  adversely  affected the Company to date. Changes in dealers
and  distributors  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.

     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 and 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 trailers and  motorcoaches
are paid for within ten days of  invoicing.  The Company has  arrangements  with
NationsCredit   Commercial   Corporation,   Deutsche  Financial  Services  Corp.
(formerly  ITT  Commercial  Finance  Corp.),   Bombardier   Capital,   and  with
TransAmerica  Commercial  Finance Corp. to provide  trailer floor plan financing
for its dealers.  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 and retail financing
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 such
payments or repurchases to date, there can be no assurance that such obligations
will not, in the future, adversely impact the Company.

     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, World of Outlaws the Indianapolis Motor Speedway"
and 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 1996 NASCAR Featherlite Southwest Tour was 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,  the  National  Cutting  Horse
Association,  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  factory  representatives  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  have  greater  financial  and  other  resources  than the  Company.
Furthermore,  certain of the Company's  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, Sooner

Drop Frame Vans                         Kentucky

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

<PAGE>

Competition - Motorcoaches

     The motorcoach industry is highly  competitive,  particularly in XL models,
with ten 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 1996.

     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.  Costs of
aluminum to the Company  remained  fairly  stable during the period 1992 through
1994 due in part to the  Company's  practice  during such period of  negotiating
annual pricing  contracts with  suppliers.  Due to significant  fluctuations  in
market  aluminum  prices  during 1995,  the Company was not able to contract for
extended periods at acceptable prices for all of 1995. As discussed in the M D &
A section of the Annual Report,  fluctuations  in aluminum prices did affect the
Company's  margins in 1995 and may do so again in the  future.  The  Company has
obtained  fixed  price  contracts  from  suppliers  for 1997 to reduce  the risk
related to fluctuations in the cost 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 1997. 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  affect  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 pool trailers may be scheduled to maximize the efficiency
of the production  lines.  The Company also utilizes  certain  production  lines
solely for standard model trailers.

<PAGE>

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

     The Company purchases its motorcoach shells from one manufacturer,  Prevost
Car, 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 the
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, 1996 the Company had  unfilled  confirmed  orders from its
customers in the amount of approximately  $28 million,  including $16 million in
motorcoach  orders,  and $7.2  million,  at  December  31,  1995.  All orders at
December 31, 1996 are expected to be filled during 1997.

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
application pending with respect to FEATHERLITE-STL(TM) 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   application   pending  for  VANTARE  by
Featherlite(TM)  trade name for use in conjunction with  motorcoaches and yachts
in the United States.

<PAGE>

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
years and certain  parts of 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, 1996, the Company had 1127  employees,  of whom 1018 are
full-time and 19 are part-time as follows:  Production and production  support -
1022, Sales and Marketing- 60, and Administration - 45.

     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, and Michael
Guth,  President  of the  Vantare  Division  of  Featherlite.  The  loss  of Mr.
Clement's or Mr. Guth's  services  could have a material  adverse  effect on the
Company's  business and development.  There can be no assurance that an adequate
replacement  could be found for either individual 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
provide 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.

<PAGE>

     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.

Cautionary Statements

     Featherlite  desires to take advantage of the new "Safe Harbor"  provisions
of the Private  Securities  Litigation Reform Act of 1995. Many of the following
important factors discussed below have been discussed in Featherlite's prior SEC
filings.

     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 for 1996 and beyond,  to differ  materially  from those expressed in any
forward-looking statements made by, or on behalf of, Featherlite:

o    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;

o    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;

o    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;

o    Inability of motorcoach  shell  manufacturer  to deliver shells on a timely
     basis;

o    The effects of changes  within  Featherlite's  organization,  including the
     loss of the services of key  management  personnel,  including  Mr.  Conrad
     Clement,  President and Chief Executive Officer and Michael Guth, President
     of Vantare division of Featherlite;

o    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;

o    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;

o    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;

o    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;

o    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;

o    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;

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

<PAGE>

ITEM 2. PROPERTIES

     The Company's principal sales,  marketing and executive offices are located
in a 20,000  square  foot  building  owned by the  Company  near  Cresco,  Iowa.
Adjacent to it is a Company-owned  30,000 square foot 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
include   approximately  238,000  square  feet  including  a  140,000  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.

     The  Shenandoah  facilities  include a 117,000  square  foot  manufacturing
facility  for steel  trailers  acquired in October 1995 in  connection  with the
Diamond D  acquisition.  All of the  assets of  Diamond D Trailer  Manufacturing
Inc.,  including the office and  production  facilities  were purchased for $2.4
million,  including the  assumption of certain  liabilities  of $408,000 and the
payment of $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 11 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  County Port  Authority and is
being leased by the Company under terms of an operating lease.  These facilities
are in the process of being  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 is also being  improved.  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.

ITEM 3. LEGAL PROCEEDINGS

     Other  than  routine  immaterial  litigation  incidental  to the  Company's
business,  there are no other legal  proceedings  pending  or, to the  Company's
knowledge,  threatened to which the Company is or may be a party or to which its
property is or may be subject.

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.

<PAGE>

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       53       President, Chief Executive Officer and Director
Jeffery A. Mason        56       Chief Financial Officer and Director
Tracy J. Clement        30       Executive Vice President and Director
Gary H. Ihrke           50       Vice President of Operations & Secretary
Eric P. Clement         27       Vice President Sales
Steven J. Sheldon       46       Vice President of Market Development
Larry D. Clement        51       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.

     Eric P.  Clement  has been Vice  President  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 sections labeled "Corporate  Information" and "Financial  Information" which
appear in the Company's  Annual Report to Shareholders for the fiscal year ended
December 31, 1996.

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, 1996.

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,
1996.

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, 1996.

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

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     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 1997 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 1997 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 1997 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 1997 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, 1996 and 1995                   *
             Statements of Operations for each of the years
                    ended December 31, 1996, 1995 and 1994                  *
             Statements of Cash Flows for each of the years
                    ended December 31, 1996, 1995 and 1994                  *
             Statements of Shareholders' Investment for each
                    of the years ended December 31, 1996, 1995 and 1994     *
             Notes to Consolidated Financial Statements                     *

       (2)   Financial Statement Schedules:

             Report of Independent Auditor                                
             Schedule II - Valuation and Qualifying Accounts              

       (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,  1996, a copy of which is included
     with this Form 10-K as Exhibit 13.

                            MCGLADREY & PULLEN, LLP
                  Certified Public Accountants and Consultants

To the Board of Directors
Featherlite Mfg., Inc.
Cresco, Iowa

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
consolidated   financial   statements   taken  as  a  whole.   The  consolidated
supplemental  Schedule  II is  presented  for  purposes  of  complying  with the
Securities  and  Exchange  Commission's  rules  and is not a part  of the  basic
consolidated  financial  statements.  This  Schedule  has been  subjected to the
auditing  procedures applied in our audits of the basic  consolidated  financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic consolidated financial statements taken as a whole.

                                /s/ McGladrey & Pullen, LLP
                                    McGladrey & Pullen, LLP

Rochester, Minnesota
February 19, 1997

                Schedule II - Valuation and Qualifying Accounts
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                                       Additions
                                                            Balance at    Charged To                                      Balance
                                                            Beginning       Costs         Charged To                       at End
Description                                                 of Period     and Expenses   Other Accounts  Deductions(1)   of Period
<S>                                                            <C>           <C>            <C>           <C>              <C>    

Year ended December 31, 1994:
         Allowance for doubtful accounts                        $20           $25           $--            $ (5)            $40
         Allowance for inventory obsolescence                    45            68            --              --             113

Year ended December 31, 1995:
         Allowance for doubtful accounts                        $40           $16           $1             $(16)            $41
         Allowance for inventory obsolescence                   113            --           --              (14)             99

Year ended December 31, 1996:
         Allowance for doubtful accounts                        $41           $16           $--            $(16)            $41
         Allowance for inventory obsolescence                    99           101            --             (50)            150
</TABLE>
(1) Write off of uncollectible accounts/obsolete inventory

<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 18, 1997                      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 18, 1997
Conrad D. Clement         Officer and Director (Principal
                          Executive Officer)

/s/ Jeffery A. Mason      Chief Financial Officer and            March 18, 1997
Jeffery A. Mason          Director (Principal Financial
                          and Accounting Officer)

/s/ Tracy J. Clement      Executive Vice President and           March 18, 1997
Tracy J. Clement          Director

/s/ Donald R. Brattain    Director                               March 18, 1997
Donald R. Brattain

/s/ Thomas J. Winkel      Director                               March 18, 1997
Thomas J. Winkel

/s/ Kenneth D. Larson     Director                               March 18, 1997
Kenneth D. Larson

/s/ John H. Thomson       Director                               March 18, 1997
John H. Thomson

<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  EXHIBIT INDEX
                                       TO
                         FORM 10-K FOR FISCAL YEAR ENDED
                                DECEMBER 31, 1996


                             FEATHERLITE MFG., INC.


 EXHIBIT
 NUMBER                DESCRIPTION

2.1       Agreement between Diamond D Trailer Manufacturing Inc. and Featherlite
          Mfg.,  Inc. dated  September 30, 1995 -  incorporated  by reference to
          Exhibit  10.21 of the  Company's  Form 10-K for the fiscal  year ended
          December 31, 1995*

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*

<PAGE>

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 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 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  Company's  10-Q  for the
          quarter ended March 31, 1996*

10.19     Agreement  dated  August  1,  1996  between  the  Company  and  Dolton
          Aluminum--incorporated  by reference to Company's 10-Q for the quarter
          ended September 30, 1996.*

10.20     Agreement  dated  August  1,  1996  between  the  Company  and  Alumax
          Extrusions  Inc.--incorporated  by reference to the 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

10.22     Agreement  for  wholesale  financing  dated  October  3, 1996  between
          Deutsche Financial Services and Featherlite Mfg., Inc.

10.23**   Amendment to 1994 Stock Option Plan dated May 14, 1996

10.24***  Agreement  dated  August 26, 1996  between  the  Company and  Reynolds
          Aluminum

10.25***  Agreement  dated  September  13,  1996  between the Company and Samuel
          Whittar Inc.

10.26***  Agreement  dated  November  27,  1996  between  the Company and Dolton
          Aluminum

10.27***  Agreement  dated  November  27,  1996  between  the Company and Alumax
          Transportation Products

13        Portions of annual  report to  shareholders  for the fiscal year ended
          December 31, 1996 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.

***  Portions of this documents have been omitted pursuant to a request for
     confidential treatment.