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.:  0-24804
December 31, 1998

                                FEATHERLITE, 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 9, 1999, was $14,024,000 (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 9, 1999:6,500,051.

                       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, 1998 - Part II; (2) Proxy statement for 1999 Annual Meeting - Part
III.



<PAGE>
                                                       PART I

ITEM 1.      DESCRIPTION OF BUSINESS

General

         Featherlite, Inc. (formerly 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 1,000
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. In 1998, the Company expanded its presence in
this market by acquiring the assets of Mitchell Motorcoach Sales. 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 FeatherliteTM" and Featherlite Vogue(R). Beginning in
1999, these motorcoaches will be marketed under the trade names Featherlite
Vantare(R), Featherlite Vogue(R) and Featherlite Luxury CoachesTM.

         The Company markets its primary trailer 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 trailer 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 number of affluent retirees and business
owners who represent the target market for luxury motorcoaches produced by
Featherlite is continuing to grow at a healthy pace.

         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.

         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, NHRA, IRL,

<PAGE>

ARCA, ASA, World of Outlaws,,the Indianapolis Motor Speedway and Speedway Motor
Corporations five race tracks. Featherlite has an association with the All
American Quarter Horse Congress, the National Western Livestock Show and Rodeo,
United States Team Roping Competition, Professional Bull Riders, Black Hills
Livestock Show and the National High School Finals Rodeo. The Company's luxury
motorcoach divisions are the "Official Coach" of NASCAR, NHRA, 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, 1998 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 customer's 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 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.

<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". In 1998, the Featherlite Vogue brand of motorcoaches
was added when the Company purchased the assets of Mitchell Motorcoach Sales,
Inc. 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 1998, 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 1996, 1997 and 1998 (dollars in
thousands):

<TABLE>
<CAPTION>

                                                                Years ended December 31,         
                                          -----------------------------------------------------------------
                                          1996                            1997                         1998
                             --------------------------------    -------------------------     ---------------------------
                                      Amount         Percent         Amount        Percent         Amount        Percent
                                      ------         -------         ------        -------         ------
<S>                                  <C>               <C>          <C>              <C>          <C>    
Horse                                $29,697           29.9%        $31,202          23.2%        $38,637          20.2%
Livestock                             17,789           17.9%         21,468          16.0%         20,866          10.9%
Car and race car/specialty
transporters
                                      15,847           15.9%         24,797          18.5%         29,458          15.4%
Utility and recreational               7,206            7.3%          8,897           6.6%          9,707           5.1%
Commercial                            10,150           10.2%          7,244           5.4%          7,741           4.1%
Motorcoaches                          14,785           14.9%         34,355          25.6%         76,522          40.1%
                              --------------- --------------- -------------- -------------- -------------- --------------
Net Trailer & Motorcoach
Sales                                $95,474           96.1%       $127,963          95.2%       $182,931          95.8%
Parts, Deliver & Scrap                 3,855            3.9%          6,424           4.8%          7,943           4.2%
                              --------------- --------------- -------------- -------------- -------------- --------------
Net Sales                            $99,329          100.0%       $134,387         100.0%       $190,874         100.0%
                                     =======          ======       ========         ======       ========         ======

</TABLE>

         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 48% 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. With the addition
of the Featherlite Vogue(R) brand, the Company also offers a high quality Class
A series motorcoach, a living unit entirely constructed on a base, specially
designed motor vehicle chassis.

         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
demonstration at particular shows or events and resale purposes. Retail prices
range from about $400,000 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 and the Vogue facility in Pryor, Oklahoma, 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
motorcoaches, the Company sells replacement and specialty trailer and coach
parts to its dealers and to others. It coordinates delivery of completed
trailers to customers and to dealers for a fee and in 1998 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

<PAGE>

Company, conducts such aircraft dealer activities. Featherlite Aviation Company
currently holds for resale two 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 the other income caption in the Company's Statement of
Income. The Company's other business activities, excluding aircraft, in the
aggregate, accounted for approximately 3.9%, 4.8% and 4.2% of the Company's net
sales for 1996, 1997 and 1998, respectively.

Marketing and Sales

         Dealer Network

         The Company markets its products primarily through a network of over
240 full-line dealers and over 1,000 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 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 54% of the Company's
net trailer sales for 1996, 1997 and 1998. 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 and distributors 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 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. 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(R)"
and Featherlite Vogue(R) motorcoaches.

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 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.

<PAGE>

         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.

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, NHRA, IRL ARCA, ASA, NHRA, World of Outlaws, the
Indianapolis Motor Speedway and Speedway Motor Corporations five race tracks and
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. The 1998 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, the Professional Bull
Riders Association, 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.





<PAGE>

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, 
Race Car Transporters....................     Wells Cargo, Haulmark, PACE,
                                              Sooner

Competition - Motorcoaches

         The motorcoach industry is highly competitive, particularly in XL and
high-end Class A 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, and Custom.

Manufacturing

         The Company manufactures substantially all of its trailers at plants
located in Cresco, Nashua and Shenandoah Iowa. It has an agreement with one
other company 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 1998.

         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 1999 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 effect of fluctuations in the price of aluminum.

         The Company presently purchases substantial amounts of aluminum
extrusions from three major suppliers, Alumax Extrusions Inc., Tifton Aluminum
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

<PAGE>

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 1999. 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. The Company utilizes an independent outside contractor to
provide customer specified paint and graphic designs on specialty trailers.
There is a risk related to delays in completing trailer delivery to the customer
due to delays by the subcontractor. This could adversely affect reported sales
and operating income.

         The Company manufactures all of its motorcoaches at plants located in
Sanford, Florida and Pryor, Oklahoma. Except for the coach shell, engines and
transmissions for Class A models and electronic equipment, various kitchen and
bathroom fixtures and accessories and other purchased items, the Company
fabricates all the components for its coaches, including building the chassis
for Class A type motorcoaches. 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.

         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.

         The Company purchases engines and transmissions from local dealers. The
Company does have an informal commitment from the dealers for sufficient
transmissions and engines to meet projected requirements for 1999. In the event
the dealers are unable to deliver engines and transmissions to the Company, the
Company's revenues and profits could be materially and adversely affected.

Backlog

         At December 31, 1998 the Company had unfilled confirmed orders from its
customers in the amount of approximately $31 million including $19 million in
motorcoach orders, compared with $27 million, including $14 million in
motorcoaches, at December 31, 1997. All orders in backlog at December 31, 1998
are expected to be filled during 1999.



<PAGE>


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 expired 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, snowmobile trailers and horse trailers.

         The Company has a United States trademark for "VANTARE by
Featherlite(R)" for use in conjunction with motorcoaches and yachts in the
United States and for Featherlite Vogue(R) for motorcoaches in the United
States. The Company is in the process of registering two new trademarks,
"Featherlite Vantare" and "Featherlite Luxury Coaches", for motorcoaches 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 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
manufacturers' of the shell, transmission and engine generally is for two years.


<PAGE>


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, 1998, the Company had 1,652 employees, of whom 1,623
are full-time and 29 are part-time as follows: Production and production support
- 1,429, Sales and Marketing - 133, and Administration - 90.

         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. 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 the Company approximately $870,000 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.

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:

o        A moderating growth rate or decline 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 graphics/paint subcontractor to complete custom specified
         paint and graphic designs could delay delivery of specialty trailers on
         a timely basis;

o        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;

o        Inability of engine and transmission manufacturers to deliver
         engines/transmissions on a timely basis.

<PAGE>

o        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.

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.

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 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 include approximately 258,000 square feet including 140,000 square foot
expansion completed in March 1995 and a 20,000 square foot expansion in 1998.
Three buildings, totaling approximately 156,000 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 indefinitely deferred plans to build a warehouse facility for raw
material storage at its Cresco location.

         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. In 1998, the Company sold two of the three buildings
owned 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
remaining Grand Meadow facility.

         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

<PAGE>

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. In 1997, vacant
land near the Vantare facilities was purchased for future expansion. In November
1998, the Company began the construction of an 18,000 square foot sales office
at a cost of approximately $2.9 million. This expansion project is scheduled to
be completed by the end of the second quarter in 1999. It also includes site
preparation work necessary to add a service center adjacent to the sales office
at an additional cost of approximately $800,000. This project may also be
completed in 1999.

         In May, 1998, the Company acquired office and production facilities and
other assets of Mitchell Motorcoach Sales, Inc. in Pryor, Oklahoma. (See Note 10
to financial statements). This facility includes approximately 150,000 square
feet of production and office space and is used to manufacture luxury
motorcoaches. It is owned by Oklahoma Ordnance Works Authority and is being
leased to the Company under the terms of an operating lease which expires in
March, 2011.

         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

         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            Age      Present Position with Company
 Executive Officer

  Conrad D. Clement      55      President, Chief Executive Officer and Director
  Jeffery A. Mason       58      Chief Financial Officer and Director
  Tracy J. Clement       32      Executive Vice President and Director
  Gary H. Ihrke          52      Vice President of Operations & Secretary
  Eric P. Clement        29      Vice President of Sales
  Steven J. Sheldon      48      Vice President of Market Development
  Larry D. Clement       53      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:

<PAGE>
         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 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.

                                     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, 1998.

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, 1998.

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, 1998.

<PAGE>

ITEM 7A. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Featherlite is exposed to market risks related to changes in U.S. and
International interest rates. Substantially all of the Company's debt bears
interest at a variable rate. To a limited extent, the Company manages its
interest rate risk through the use of interest rate swaps. As of December 31,
1998, the fair value of interest rate swaps was not material. A 10% increase in
interest rates would reduce the Company's future annual earnings by
approximately $385,000 at current debt levels.

         The Company uses substantial quantities of aluminum in its
manufacturing of trailers. The Company generally seeks to limit its exposure to
the risk of fluctuations in the price of aluminum by entering into fixed-price
contracts with suppliers for quantities sufficient to satisfy its requirements
for up to one year in advance. The Company does not engage in hedging
transactions or other use of derivatives in connection with its operations.

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, 1998.

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 1999 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 1999 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 1999 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 1999 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, 1998 and 1997...........*
                       Statements of Operations for each of the years
                         ended December 31, 1998, 1997 and 1996...............*
                       Statements of Cash Flows for each of the years
                         ended December 31, 1998, 1997 and 1996...............*
                       Statements of Shareholders' Investment for each
                         of the years ended December 31, 1998, 1997 
                         and 1996.............................................*
                       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, 1998, a copy of
         which is included with this Form 10-K as Exhibit 13.

                                   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, INC.

                                          By:/s/ Conrad D. Clement     
                                          Conrad D. Clement
Date:  March 20, 1999                     President and Chief Executive Officer



<PAGE>


         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            March 20, 1999
Conrad D. Clement            Executive Officer and
                             Director (Principal
                             Executive Officer)

/s/ Jeffery A. Mason         Chief Financial Officer     March 20, 1999
Jeffery A. Mason             and Director (Principal
                             Financial and Accounting
                             Officer)

/s/ Tracy J. Clement         Executive Vice President    March 20, 1999
Tracy J. Clement             and Director

/s/ Donald R. Brattain       Director                    March 20, 1999
Donald R. Brattain

/s/ Thomas J. Winkel         Director
Thomas J. Winkel                                         March 20, 1999

/s/ Kenneth D. Larson        Director                    March 20, 1999
Kenneth D. Larson

/s/ John H. Thomson          Director                    March 20, 1999
John H. Thomson


<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            -------------------------
                                  EXHIBIT INDEX
                                       TO
                         FORM 10-K FOR FISCAL YEAR ENDED
                                DECEMBER 31, 1998
                            -------------------------
                                FEATHERLITE, INC.

 EXHIBIT
 NUMBER                         DESCRIPTION
-------- -----------------------------------------------------------------------
 
2.1      Agreement and Plan of Reorganization dated May 8, 1998 with Mitchell
         Motorcoach Sales, Inc.-- incorporated by reference to Exhibit 10.10 to
         Company's 10-Q for the quarter ended June 30, 1998*

2.2      Amendment to Agreement between the Company and Mitchell Motorcoach
         Sales, Inc. dated December 31, 1998

3.1      The Company's Articles of Incorporation, as amended-- incorporated by
         reference to Exhibit 3.1 to Company's 10-Q for the quarter ended March
         31, 1998*

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*

10.1     Agreements with Samuel-Whittar, Inc. dated February 3, 1998, May 13,
         1998, June 29, 1998 and June 30, 1998-- incorporated by reference to
         Exhibit 10.4 to Company's 10-Q for the quarter ended June 30, 1998*

10.2     Agreement with Easco Aluminum dated May 1, 1998-- incorporated by
         reference to Exhibit 10.5 to Company's 10-Q for the quarter ended June
         30, 1998*

10.3     Agreement with Aluminum Shapes dated May 1, 1998-- incorporated by
         reference to Exhibit 10.6 to Company's 10-Q for the quarter ended June
         30, 1998*

10.4     Agreement with Alumax Transportation Products dated May 14, 1998 --
         incorporated by reference to Exhibit 10.7 to Company's 10-Q for the
         quarter ended June 30, 1998*

10.5     Agreements with Aluminum Line Products Company dated June 10, 1998 and
         June 30, 1998-- incorporated by reference to Exhibit 10.8 to Company's
         10-Q for the quarter ended June 30, 1998*

10.6     Letter to Tifton Aluminum dated May 1, 1998-- incorporated by reference
         to Exhibit 10.9 to Company's 10-Q for the quarter ended June 30, 1998*

10.7     Revolving Loan and Security Agreement with Firstar Financial Services,
         Division of Firstar Bank, Milwaukee, Wisconsin-- incorporated by
         reference to Exhibit 10.1 to Company's 10-Q for the quarter ended
         September 30, 1998*

10.8     Amendment to Revolving Loan and Security Agreement between the Company
         and Firstar Financial Services dated February 8, 1999

10.9     **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. 82564*

<PAGE>

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*

10.14    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, 1998*

10.15    Inventory Repurchase Agreement, dated February 27, 1995, between the
         Company 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*

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

10.17    **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*

10.18    Construction Loan Agreement, dated November 30, 1998 between the
         Company and First Union Bank

10.19    Real Estate Promissory Note, dated November 30, 1998 in the amount of
         $4,000,000 to First Union Bank

10.20    Swap Transaction Confirmation dated November 30, 1998 between the
         Company and First Union Bank 

13       Portions of annual report to shareholders for the fiscal year ended
         December 31, 1998 incorporated by 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