10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(MARK ONE)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________to__________________

Commission file number 1-7160

COACHMEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

INDIANA	35-1101097
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification number)
2831 Dexter Drive, Elkhart, Indiana	46514
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 574-262-0123

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.YesxNoo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).YesxNoo

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

At July 31, 2005:

Common Shares, without par value 15,826,766 shares outstanding including an equivalent number of common share purchase rights.

FORM 10-Q

INDEX
	Page No.
Part I. Financial Information
Financial Statements:
Consolidated Balance Sheets-	3-4
June 30, 2005 and December 31, 2004
Consolidated Statements of Operations-	5
Three and Six Months Ended June 30, 2005 and 2004
Consolidated Statements of Cash Flows-	6
Six Months Ended June 30, 2005 and 2004
Notes to Consolidated Financial Statements	7-15
Management’s Discussion and Analysis of Financial	16-19
Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk	20
Controls and Procedures	20
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders	21
Item 6. Exhibits	21
Signatures	22
Index to Exhibits	23

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Coachmen Industries, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)

	June 30,			December 31,
	2005			2004
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,905		$	14,992
Marketable securities		-			1,747
Trade receivables, less allowance for
doubtful receivables 2005 - $1,491
and 2004 - $919		49,930			58,805
Other receivables		6,189			4,209
Refundable income taxes		4,385			244
Inventories		152,769			136,088
Prepaid expenses and other		3,247			4,144
Deferred income taxes		6,110			6,014
Total current assets		227,535			226,243
Property, plant and equipment, at cost		166,584			163,709
Less, accumulated depreciation		(84,351	)		(81,358	)
Property, plant and equipment, net		82,233			82,351
Goodwill		18,132			18,132
Cash value of life insurance, net of loans of $15,000		27,693			25,162
Real estate held for sale		60			60
Other		5,708			5,775
Total assets	$	361,361		$	357,723

See Notes to Consolidated Financial Statements.

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Coachmen Industries, Inc. and Subsidiaries

Consolidated Balance Sheets (continued)

(in thousands)

	June 30,			December 31,
	2005			2004
	(Unaudited)
Liabilities
Current liabilities:
Short-term borrowings	$	2,940		$	20,000
Accounts payable, trade		59,206			33,805
Accrued income taxes		-			2,479
Accrued expenses and other liabilities		43,223			39,466
Floorplan notes payable		6,542			6,986
Current portion of long-term debt		2,242			2,195
Total current liabilities		114,153			104,931
Long-term debt		14,304			14,943
Deferred income taxes		3,512			3,512
Postretirement deferred compensation benefits		10,052			9,724
Other		142			195
Total liabilities		142,163			133,305
Shareholders’ equity
Common shares, without par value:
authorized 60,000 shares; issued 2005 - 21,122 shares and 2004 - 21,108 shares		92,008			91,850
Additional paid-in capital		7,772			8,894
Retained earnings		179,577			184,284
Treasury shares, at cost: 2005 - 5,295 shares
and 2004 - 5,384 shares		(58,463	)		(59,002	)
Unearned compensation		(1,632	)		(1,700	)
Accumulated other comprehensive income (loss)		(64	)		92
Total shareholders’ equity		219,198			224,418
Total liabilities and shareholders’ equity	$	361,361		$	357,723

See Notes to Consolidated Financial Statements.

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Coachmen Industries, Inc. and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Net sales	$	208,978		$	231,138		$	414,095		$	428,603
Cost of sales		184,868			195,500			368,824			368,648
Gross profit		24,110			35,638			45,271			59,955
Operating expenses:
Delivery		10,519			10,337			20,376			19,136
Selling		8,675			8,277			16,572			15,208
General and administrative		8,648			9,334			14,019			18,589
Gain on sale of properties, net		(45	)		(69	)		(49	)		(1,079	)
Total operating expenses		27,797			27,879			50,918			51,854
Operating income (loss)		(3,687	)		7,759			(5,647	)		8,101
Nonoperating (income) expense:
Interest expense		846			478			1,928			891
Investment income		(440	)		(347	)		(1,257	)		(1,275	)
Other income, net		(218	)		(26	)		(293	)		(86	)
Total nonoperating (income) expenses		188			105			378			(470	)
Income (loss) from continuing operations before income taxes		(3,875	)		7,654			(6,025	)		8,571
Income taxes (credit)		(2,405	)		2,579			(3,169	)		2,909
Net income (loss) from continuing operations		(1,470	)		5,075			(2,856	)		5,662
Discontinued operations:
Income from operations of discontinued entity (net of taxes)		-			109			-			164
Net income (loss)	$	(1,470	)	$	5,184		$	(2,856	)	$	5,826
Earnings per share - Basic
Continuing operations	$	(.09	)	$	.33		$	(.18	)	$	.37
Discontinued operations		-			.01			-			.01
Net earnings per share	$	(.09	)	$	.34		$	(.18	)	$	.38
Earnings per share - Diluted
Continuing operations	$	(.09	)	$	.33		$	(.18	)	$	.36
Discontinued operations		-			.01			-			.01
Net earnings per share	$	(.09	)	$	.34		$	(.18	)	$	.37
Number of common shares used in computation of earnings per share:
Basic		15,546			15,468			15,540			15,464
Diluted		15,546			15,542			15,540			15,545
Cash dividends per common share	$	.06		$	.06		$	.06		$	.06

See Notes to Consolidated Financial Statements.

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Coachmen Industries, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2005			2004
Cash flows from operating activities:
Net income (loss)	$	(2,856	)	$	5,826
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation		4,463			4,817
Provision for doubtful receivables, net of recoveries		418			(9	)
Gain on sale of properties and other assets		(49	)		(1,079	)
Increase in cash surrender value of life insurance policies		(385	)		(1,008	)
Net realized and unrealized (gains) losses on marketable securities and derivatives		(369	)		289
Deferred income tax benefit		(96	)		(622	)
Tax benefit from stock options exercised		3			14
Other		(266	)		640
Changes in certain assets and liabilities:
Trade receivables		6,477			(17,018	)
Inventories		(16,681	)		(22,734	)
Prepaid expenses and other		897			1,197
Accounts payable, trade		25,401			10,920
Income taxes - accrued and refundable		(6,620	)		(82	)
Accrued expenses and other liabilities		3,313			7,782
Net cash provided by (used in) operating activities		13,650			(11,067	)
Cash flows from investing activities:
Proceeds from sales of marketable securities		1,933			1,199
Proceeds from sale of property and other assets		77			2,393
Investments in marketable securities		(2,119	)		(1,458	)
Purchases of property and equipment		(4,338	)		(6,413	)
Other		32			(863	)
Net cash used in investing activities		(4,415	)		(5,142	)
Cash flows from financing activities:
Proceeds from short-term borrowings		232			28,500
Payments of short-term borrowings		(17,292	)		(8,000	)
Proceeds from long-term debt		224			-
Payments of long-term debt		(816	)		(264	)
Issuance of common shares under stock incentive plans		181			234
Cash dividends paid		(1,887	)		(1,873	)
Other		36			-
Net cash provided by (used in) financing activities		(19,322	)		18,597
Increase (decrease) in cash and cash equivalents		(10,087	)		2,388
Cash and cash equivalents:
Beginning of period		14,992			6,408
End of period	$	4,905		$	8,796

See Notes to Consolidated Financial Statements.

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Coachmen Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. BASIS OF PRESENTATION

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six-month period ended June 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004.  

2. SEGMENT INFORMATION

The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting, which disaggregates its business by product category. The Company’s two reportable segments are recreational vehicles, including related parts and supplies, and housing and building. The Company evaluates the performance of its segments and allocates resources to them based on performance. Differences between reported segment amounts and corresponding consolidated totals represent corporate expenses for administrative functions and income or expenses relating to property and equipment or other items that are not allocated to segments.

The table below presents information about segments used by the chief operating decision maker of the Company for the three and six month periods ended June 30, 2005 (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005			2004		2005			2004
Net sales
Recreational Vehicles	$	145,737		$	162,713	$	303,044		$	312,914
Housing and Building		63,241			68,425		111,051			115,689
Total	$	208,978		$	231,138	$	414,095		$	428,603
Gross profit
Recreational Vehicles	$	8,508		$	18,326	$	20,428		$	32,349
Housing and Building		15,669			17,144		24,843			27,404
Other		(67	)		168		-			202
Total	$	24,110		$	35,638	$	45,271		$	59,955
Operating expenses
Recreational Vehicles	$	14,400		$	12,772	$	27,801		$	23,530
Housing and Building		13,595			14,042		26,680			26,786
Other		(198	)		1,065		(3,563	)		1,538
Total	$	27,797		$	27,879	$	50,918		$	51,854

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Operating income (loss)
Recreational Vehicles	$	(5,892	)	$	5,554		$	(7,373	)	$	8,819
Housing and Building		2,074			3,102			(1,837	)		618
Other		131			(897	)		3,563			(1,336	)
Total	$	(3,687)		$	7,759		$	(5,647)		$	8,101
Pre-tax income (loss) from
continuing operations
Recreational Vehicles	$	(6,063	)	$	5,539		$	(7,733	)	$	8,794
Housing and Building		1,979			3,053			(1,978	)		756
Other		209			(938	)		3,686			(979	)
Total	$	(3,875	)	$	7,654		$	(6,025	)	$	8,571

	June 30,		December 31,
	2005		2004
Total assets
Recreational Vehicles	$	184,305	$	174,101
Housing and Building		110,326		111,099
Other		66,730		72,523
Total	$	361,361	$	357,723

3.INVENTORIES

Inventories consist of the following (in thousands):

	June 30,		December 31,
	2005		2004
Raw materials	$	37,482	$	39,524
Work in process		22,646		21,173
Improved lots		2,239		2,236
Finished goods		90,402		73,155
Total	$	152,769	$	136,088

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4.ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following (in thousands):

	June 30,		December 31,
	2005		2004
Wages, salaries, bonuses and commissions	$	2,902	$	5,366
Dealer incentives, including volume
bonuses, dealer trips, interest
reimbursement, co-op advertising and
other rebates		2,579		5,119
Warranty		10,780		10,140
Insurance-products and general liability,
workers’ compensation, group health and other		7,139		5,589
Customer deposits and unearned revenues		9,550		7,340
Other current liabilities		10,273		5,912
Total	$	43,223	$	39,466

During the three-month period June 30, 2005, approximately 120 salaried positions were eliminated throughout the Company. Severance costs related to the eliminations were $0.4 million, of which $0.2 million had been paid as of June 30 and $0.2 million is accrued at June 30 and will be paid by September 30, 2005.

Changes in the Company’s warranty liability during the three and six-month periods ended June 30 were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Balance of accrued warranty at beginning of period	$	10,316		$	9,484		$	10,140		$	8,658
Warranties issued during the period and changes in liability for pre-existing warranties		6,267			6,114			11,543			11,838
Cash settlements made during the period		(5,803	)		(5,088	)		(10,903	)		(9,986	)
Balance of accrued warranty at June 30	$	10,780		$	10,510		$	10,780		$	10,510

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5.EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per common share is based on the weighted average number of shares outstanding during the period, after consideration of the dilutive effect of stock options and awards. Basic and diluted earnings per share for the three and six-month periods ended June 30 were calculated as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Numerator:
Net income (loss) applicable to common stock	$	(1,470	)	$	5,184		$	(2,856	)	$	5,826
Denominator:
Number of shares outstanding, end of period:
Common stock		15,827			15,672			15,827			15,672
Effect of weighted average
contingently issuable shares
outstanding during period		(272	)		(198	)		(232	)		(149	)
Effect of weighted average shares
outstanding during period		(9	)		(6	)		(55	)		(59	)
Weighted average number of
common shares used in basic EPS		15,546			15,468			15,540			15,464
Effect of dilutive securities,
stock options and awards		-			74			-			81
Weighted average number of
common shares used in
diluted EPS		15,546			15,542			15,540			15,545

As the Company reported a net loss for the three and six-month periods ended June 30, 2005, the dilutive effect of stock options and awards did not enter into the computation of diluted earnings per share because their inclusion would have been antidilutive.

For the three and six-month periods ended June 30, 2004, outstanding stock options covering 85,800 and 12,000 shares, respectively, were not included in the computation of diluted earnings per share because their exercise price was greater than the average market prices for the periods and their inclusion would have been antidilutive.

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6.COMPREHENSIVE INCOME (LOSS)

The changes in components of comprehensive income for the three and six-month periods ended June 30 are as follows (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005			2004		2005			2004
Net income (loss)	$	(1,470	)	$	5,184	$	(2,856	)	$	5,826
Unrealized losses on securities held for sale, net of taxes		(57	)		61		(188	)		(146	)
Unrealized gains (losses) on cash flow hedges, net of taxes		(27	)		118		32			75
Comprehensive income (loss)	$	(1,554	)	$	5,363	$	(3,012	)	$	5,755

As of June 30, 2005 and 2004, the accumulated other comprehensive income (loss), net of tax, relating to unrealized gains (losses) on securities available for sale was $0 and $304,000, respectively, and relating to deferred losses on cash flow hedges was ($64,000) and ($85,000), respectively.

7.COMMITMENTS, CONTINGENCIES AND GUARANTEES

Obligation to Purchase Consigned Inventories

The Company obtains vehicle chassis for its recreational vehicle products directly from automobile manufacturers under converter pool agreements. The agreements generally provide that the manufacturer will provide a supply of chassis at the Company's various production facilities under the terms and conditions as set forth in the agreement. Chassis are accounted for as consigned inventory until either assigned to a unit in the production process or 90 days have passed. At the earlier of these dates, the Company is obligated to purchase the chassis and it is recorded as inventory. At June 30, 2005 and December 31, 2004, consigned chassis inventory approximated $38.3 million and $29.7 million, respectively. 

Repurchase Agreements

The Company was contingently liable at June 30, 2005 to banks and other financial institutions on repurchase agreements in connection with financing provided by such institutions to most of the Company’s independent dealers in connection with their purchase of the Company’s recreational vehicle products. These agreements provide for the Company to repurchase its products from the financing institution in the event that they have repossessed them upon a dealer’s default. Products repurchased from dealers under these agreements are accounted for as a reduction in revenue at the time of repurchase. Although the estimated contingent liability approximates $288 million at June 30, 2005 ($298 million at December 31, 2004), the risk of loss resulting from these agreements is spread over the Company’s numerous dealers and is further reduced by the resale value of the products repurchased. Based on losses previously experienced under these obligations, the Company has established a reserve for estimated losses under repurchase agreements. At June 30, 2005, $0.4 million ($0.3 million at December 31, 2004) was recorded as an accrual for estimated losses under repurchase agreements.

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The Company was also contingently liable at June 30, 2005 to a financial institution on repurchase agreements in connection with financing provided by the institution to certain of the Company’s independent home builders in connection with their purchase of the Company’s housing products. This agreement provides for the Company to repurchase its products from the financing institution in the event that they have repossessed them upon a builder’s default. Products repurchased from builders under this agreement are accounted for as a reduction in revenue at the time of repurchase. Although the estimated contingent liability approximates $8.0 million at June 30, 2005 ($4.5 million at December 31, 2004), the risk of loss resulting from these agreements is spread over the Company’s numerous builders and is further reduced by the resale value of the products repurchased. The Company has evaluated the potential for losses under this agreement and has recorded an accrual of $0.1 million at June 30, 2005 ($0.1 million at December 31, 2004) for estimated losses under the repurchase agreement.

Corporate Guarantees

During 2003, the Company entered into an agreement with a financial institution to form a private-label financing program to provide wholesale inventory financing to the Company’s dealers in the Recreational Vehicles Segment. The agreement provides for a preferred program that provides financing that is subject to the standard repurchase agreement described above. In addition, the agreement provides for a reserve pool whereby the financial institution makes available an aggregate line of credit not to exceed $40 million that will provide financing for dealers that may not otherwise qualify for credit approval under the preferred program. No dealer being provided financing from the reserve pool can receive an aggregate line of credit exceeding $5 million. In addition to the standard repurchase agreement described above, for the remainder of 2005 the Company will be liable to the financial institution for a maximum of $3.1 million of aggregate losses, as defined by the agreement, incurred by the financial institution on designated dealers with higher credit risks that are accepted into the reserve pool financing program. Thereafter, the Company will be liable to the financial institution for the first $2 million of aggregate losses annually. The total amount financed under the reserve pool arrangement totaled approximately $11.3 million at June 30, 2005 ($19.2 million at December 31, 2004). The Company has recorded a loss reserve of $0.1 million at June 30, 2005 ($0.3 million at December 31, 2004) associated with these guarantees.

During the first quarter of 2004, the Company entered into an agreement to guarantee the indebtedness incurred by a recreational vehicle dealer towards the purchase of a dealership facility. The guarantee is in the principal amount of $1 million for a period of five years or until all indebtedness has been fully paid, whichever occurs first. The Company has evaluated the potential for losses under this agreement and has determined that the resolution of any claims that may arise in the future would not materially affect the Company’s financial statements.

In addition, the Company is liable under a guarantee to a financial institution for model home financing provided to certain independent builders doing business with the Company’s Housing and Building Segment. The amount outstanding under this agreement at June 30, 2005 is $0.9 million ($1.2 million at December 31, 2004). Any losses incurred under this guarantee would be offset by the proceeds from the resale of the model home and losses are limited to 20% of the original contract price, and cannot exceed $2.0 million. As of June 30, 2005, no losses have been incurred by the Company under the model home financing program.

Financing Obligation

During 2004, the Company entered into an agreement to provide financing of up to $4.9 million to a developer for the construction of a hotel. After the construction loan financing period, as defined in the agreement, the construction loan may be converted to a term loan for a period of two years, provided the terms and conditions of the agreement are met. The loans are collateralized by a first priority interest in all tangible and intangible property of the borrower. As of June 30, 2005, the Company has provided $2.0 million in financing to the developer.

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Litigation

In January 2004, the Company entered into a long-term exclusive licensing agreement with The Coleman Company, Inc. to design, produce and market a full line of new Coleman® brand recreational vehicles. In November 2004, the judge presiding over the legal dispute between Fleetwood Enterprises, Inc. and The Coleman Company, Inc. entered an order granting Fleetwood’s request for an injunction against Coleman, prohibiting their use of the trademark registration “Coleman” in the recreational vehicle industry. To protect its rights under its existing license agreement with Coleman, Consolidated Leisure Industries, LLC, doing business as the Coachmen RV Group, filed suit against The Coleman Company, Inc. in federal court in Kansas City, Kansas, to enforce its rights under the License Agreement.

On March 21, 2005, the Company entered into a settlement agreement with The Coleman Company, Inc. to resolve the licensing agreement suit. Pursuant to the settlement agreement, the Company has received $4,425,000 from The Coleman Company, Inc. in exchange for releasing all claims in the suit. The settlement of $4,425,000 was paid in two installments of $2,212,500, one of which was received by the Company on March 23, 2005 and the second of which was received on April 20, 2005, plus interest. In addition, the agreement provides for the potential of an additional payment of $500,000 if certain provisions of the agreement are breached. The settlement of $4,425,000 was reflected in the first quarter results as a reduction of $1,721,000 to cost of sales and a reduction of $461,000 to operating expenses at the RV Segment plus a reduction of $2,243,000 to the Company’s general and administrative expenses.

During the three months ended June 30, 2005, the Company settled a personal injury suit for $5,000,000, $1,000,000 of which has been paid by the Company’s primary insurance carrier. The Company’s self-insured retention is $250,000. Although the excess carrier has currently denied coverage, the Company believes it is probable that the excess carrier will ultimately be required to honor its obligation to fund the remaining settlement costs of $3,750,000. As of June 30, 2005, the Company has paid $1,500,000 in addition to the amount paid by its primary carrier and has recorded an other current liability of $2,500,000 to recognize the remaining amount to be paid on the settlement and the $250,000 retention. Due to the probable coverage of the claim by the excess carrier, a receivable of $3,750,000 has been recorded as an other current receivable.

The Company is involved in various legal proceedings, most of which are ordinary disputes incidental to the industry and most of which are covered in whole or in part by insurance. Management believes that the ultimate outcome of these matters and any liabilities in excess of insurance coverage and self-insurance accruals will not have a material adverse impact on the Company’s consolidated financial position, future business operations or cash flows.

8.STOCK-BASED COMPENSATION

In 2003, the Company adopted the Performance Based Restricted Stock Plan to permit grants of shares, subject to restrictions, to key employees of the Company as a means of retaining and rewarding them for long-term performance and to increase their ownership in the Company. The plan is accounted for in accordance with the variable plan accounting provisions of FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, and therefore awards are expensed based upon the fair value of the estimated shares to be earned over the vesting period. The exact number of shares that each employee will receive is dependent on the Company’s performance, with respect to net income, over a three-year period. The weighted-average grant-date fair value was $13.60 in 2005 and $16.65 in 2004, for the shares awarded under the plan during the respective years. The market value of the shares awarded is recognized as unearned compensation in the consolidated statements of shareholders’ equity and is amortized to operations over the vesting period. During the first quarter of 2005, the Company determined that it was probable that the performance requirements of the 2003 Plan would not be achieved and as a result, reversed the expenses which had been previously recorded related to this plan. For the three months ended June 30, 2005, the Company amortized $48,000 to compensation expense related to the 2004 and 2005 Plans. For the six months ended June 30, 2005, the Company reduced compensation expense, which is a component of general and administrative expenses, by $710,000 related to these programs. The Company amortized $217,000 and $435,000 to compensation expense for the three and six-month periods ended June 30, 2004.

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The Company has stock option plans and an employee stock purchase plan. The Company accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net earnings for these plans, as all options granted under these plans have an exercise price equal to the market value of the underlying common stock at the date of grant. The table below illustrates the effect on net income (loss) and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation.

	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2005				2004			2005			2004
	(in thousands, except per share amounts)
Net income (loss), as reported	$		(1,470	)	$	5,184		$	(2,856	)	$	5,826
Add: Stock-based compensation expense under variable plan included in reporting net income, net of taxes			(23	)		144			(512	)		288
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of taxes			(1	)		(208	)		290			(415	)
Pro forma net income (loss)	$		(1,494	)	$	5,120		$	(3,078	)	$	5,699
Net earnings per share:
Basic - as reported	$		(.09	)	$	.34		$	(.18	)	$	.38
Basic - pro forma	$	(.10		)	$	.33		$	(.20	)	$	.37
Diluted - as reported	$	(.09		)	$	.34		$	(.18	)	$	.37
Diluted - pro forma	$		(.10	)	$	.33		$	(.20	)	$	.37

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9.INCOME TAXES

For the second quarter ended June 30, 2005, the effective tax credit was 62.1% and the year-to-date credit was 52.6% compared with a 2004 second quarter and year-to-date tax rate from continuing operations of 33.7% and 33.9%, respectively. The Company’s effective tax rate fluctuates based upon income levels, the states where sales occur, the amount of export sales and the impact of nontaxable dividend on investments.

In addition, the Company has recently completed a project to identify eligible research and development (“R&D”) expenditures for the purpose of filing amended Federal and Indiana income tax returns to claim tax credits for eligible R&D activities. The Company is in the process of preparing those amended income tax returns for 1999 - 2003 which will reflect refund claims for R&D tax credits. In addition, the Company’s 2004 Federal and Indiana income tax returns, when filed, will also include R&D tax credits which were not considered in the calculation of the 2004 income tax provision. During the quarter ended June 30, 2005, the Company recorded $1.5 million of tax refunds receivable, applicable to estimated refunds for prior years’ R&D tax credits, with a related credit to the 2005 income tax provision. The prior years’ R&D tax credits, recorded in the current year, increased the Company’s effective tax benefit rate by 38.5% for the quarter and 24.7% for the 2005 year-to-date. In addition, the Company expects that its effective tax rate for 2005 will be favorably impacted by 3.6% for estimated current year’s R&D tax credits and by 0.8% for additional tax deductions provided to manufacturers under the 2004 American Jobs Creation Act.

10.NEW ACCOUNTING PRONOUNCEMENTS

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Statement 123(R) must be adopted no later than January 1, 2006 for the Company. Early adoption will be permitted in periods in which financial statements have not yet been issued. The Company expects to adopt Statement 123(R) on January 1, 2006.

Statement 123(R) permits public companies to adopt its requirements using one of two methods:

1.A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of Statement 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123(R) that remain unvested on the effective date.

2.A “modified retrospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under Statement 123 for purposes of pro forma disclosures for all prior periods presented.

The Company is still evaluating the adoption alternatives available to adopt Statement 123(R).

As permitted by Statement 123, the Company currently accounts for share-based payments to employees using the intrinsic value method of APB Opinion 25 and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have an impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share as previously noted. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.

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Coachmen Industries, Inc. and Subsidiaries

Management’s Discussion and Analysis

Of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors, which have affected the Company’s financial condition, results of operations and cash flows during the periods included in the accompanying consolidated financial statements.

A summary of the changes in the principal items included in the consolidated statements of operations is shown below (dollar amounts in thousands).

	Comparison of
	Three Months					Six Months
	Ended June 30, 2005 and 2004
	Increase (Decrease)
		Amount		Percentage			Amount		Percentage
Net sales	$	(22,160	)	(9.6	)%	$	(14,508	)	(3.4	)%
Cost of sales		(10,632	)	(5.4	)		176		0.0
Delivery expenses		182		1.8			1,240		6.5
Selling expenses		398		4.8			1,364		9.0
General and administrative expenses		(686	)	(7.3	)		(4,570	)	(24.6	)
Gain on sale of properties, net		(24	)	(34.8	)		(1,030	)	(95.5	)
Interest expense		368		77.0			1,037		116.4
Investment income		93		26.8			(18	)	(1.4	)
Other income, net		192		n/m			207		n/m
Income (loss) from continuing operations before income taxes		(11,529	)	(150.6	)		(14,596	)	(170.3	)
Income taxes (credit)		(4,984	)	(193.3	)		(6,078	)	(208.9	)
Net income (loss) from continuing operations		(6,545	)	(129.0	)		(8,518	)	(150.4	)
Income from operations of discontinued entity, net of taxes		(109	)	(100.0	)		(164	)	(100.0	)
Net income (loss)		(6,654	)	(128.4	)		(8,682	)	(149.0	)

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NET SALES

Consolidated net sales for the quarter ended June 30, 2005 were $209.0 million, a decrease of $22.2 million, or 9.6%, from the $231.1 million reported for the corresponding quarter last year. Net sales for the six months were $414.1 million, representing a decrease of 3.4%, or $14.5 million, reported for the same period in 2004. The Company’s Recreational Vehicles Segment experienced a net sales decrease of 10.4% for the quarter and a decrease of 3.2% for the six-month period. Wholesale unit shipments for the RV Segment decreased 13.5% during the second quarter of 2005 and 12.3% for the six-month period. Wholesale unit shipments of motorized products decreased 21.2% and 15.2% for the three and six-month periods ended June 30, 2005, respectively, while wholesale unit shipments of towable products were down 10.1% and 10.9% for the three and six-month periods ended June 30, 2005, respectively. Backlog for the RV Segment increased 19.4% to $88.6 million from $74.2 million at the end of the second quarter of 2004.

The Company’s Housing and Building Segment experienced a net sales decrease for the quarter ended June 30, 2005 of 7.6% and a decrease of 4.0% for the six-month period. The decreases in sales dollars were principally attributable to wholesale unit shipments being down 19.2% for the quarter and down 13.8% for the six-month period ended June 30. The Housing and Building Segment continued to experience an increase in the average sales price per unit, thereby partially offsetting the reductions in shipments. Backlog for the Housing and Building Segment as of June 30, 2005 has decreased 19.4% to $56.2 million, compared with $69.7 million at June 30, 2004.

COST OF SALES

Cost of sales decreased 5.4%, or $10.6 million, for the three months ended June 30, 2005. For the six-month period, cost of sales was $0.2 million greater in 2005 than 2004. As a percentage of net sales, cost of sales was 88.5% and 89.1% for the three and six-month periods ended June 30, 2005 compared to 84.6% and 86.0% for the three and six months ended June 30, 2004. The change in the dollar amount of cost of sales in the current quarter and six-month periods is attributable to the decrease in sales dollars offset by higher labor, which included severance expenses, insurance, and workers’ compensation costs. In addition, reductions in the production levels caused lower overhead absorption and labor inefficiencies.

OPERATING EXPENSES

As a percentage of net sales, operating expenses, which include delivery, selling, general and administrative expenses, were 13.3% and 12.3% for the 2005 quarter and six-month periods compared to 12.1% and 12.4% for the 2004 quarter and six-month periods. As a percentage of sales, delivery expenses increased by 0.5 and 0.4 percentage points for the three and six-month periods of 2005 as compared to the prior year three and six-month periods. The increase in delivery expense during the quarter and six-month period was primarily related to higher fuel costs and higher utilization of outside carriers for delivery services.

Selling expenses were 4.2% of net sales for the 2005 quarter compared to 3.6% of net sales for the three-month period ended June 30, 2004. For the six-month periods, selling expenses were 4.0% of net sales for 2005 compared to 3.5% of net sales for 2004. The increase in selling expense dollars and as a percentage of net sales during the quarter and six months ended June 30, 2005 is related to increased personnel costs and increased expenses related to travel, new product shows, and promotional expenses.

General and administrative expenses were 4.1% of net sales for the quarter compared to 4.0% for the 2004 corresponding quarter and 3.4% of net sales for the six-month period compared to 4.3% for 2004. For the second quarter, general and administrative expense dollars decreased, although as a percentage of net sales, the expenses increased 0.1 percentage points. The decrease in dollars for the three-month period was primarily a result of reduced payroll related costs. The decrease in both dollars and as a percentage of net sales of general and administrative expenses for the six-month period was primarily related to the first quarter 2005 settlement of the Company’s dispute over an RV licensing agreement with The Coleman Company, Inc. which reduced operating expenses by $2,704,000, the first quarter 2005 reversal of expenses related to the 2003 Performance Based Restricted Stock Plan grant due to the probable failure to meet the Plan’s required thresholds for payment which reduced operating expenses by $758,000 and reduced payroll related costs.

- 17 - -

GAIN ON THE SALE OF PROPERTIES, NET

There were no significant gains or losses from property transactions for the three or six months ended June 30, 2005. For the six months ended June 30, 2004, the gain on the sale of properties was $1.1 million. In late March 2004, Coachmen RV Company sold its 70,000 square-foot facility in Goshen, Indiana, and moved production to a newly acquired replacement facility located five miles north of its Middlebury, Indiana complex. There were no significant gains or losses from property transactions for the three months ended June 30, 2004.

INTEREST EXPENSE

Interest expense was $846,000 and $1,928,000 for the three and six-month periods ended June 30, 2005 compared to $478,000 and $891,000 in the same periods last year. Interest expense increased based on the higher amount of average outstanding long-term debt, borrowings on the Company’s revolving credit facility and higher applicable interest rates.

INVESTMENT INCOME

There was a net investment income of $440,000 for the quarter ended June 30, 2005 compared to $347,000 in the same quarter of 2004. For the six-month period, the net investment income of $1,257,000 compared to investment income of $1,275,000 in the previous year. The investment income for the three-month period ended June 30, 2005 and 2004 was principally attributable to earnings of the life insurance policies held and realized gains on the sale of preferred stock. The investment income for the six-month period ended June 30, 2005 was also attributable to earnings of the life insurance policies held and realized gains on the sale of preferred stock. The investment income for the six-month period ended June 30, 2004 was attributable to a cumulative preferred dividend of $536,000 from a utility company emerging from bankruptcy and earnings of the life insurance policies held.

OTHER INCOME, NET

Other income, net, represents income of $218,000 for the second quarter of 2005 and income of $26,000 for the same quarter of the previous year. For the six-month period, other income, net for 2005 was $293,000 compared to income of $86,000 in 2004. No items of significance caused the variances between the comparable quarters.

INCOME TAXES

For the second quarter ended June 30, 2005, the effective tax credit was 62.1% and the year-to-date credit was 52.6% compared with a 2004 second quarter and year-to-date tax rate from continuing operations of 33.7% and 33.9%, respectively. The Company’s effective tax rate fluctuates based upon income levels, the states where sales occur, the amount of export sales and the impact of nontaxable dividend on investments.

In addition, the Company has recently completed a project to identify eligible research and development (“R&D”) expenditures for the purpose of filing amended Federal and Indiana income tax returns to claim tax credits for eligible R&D activities. The Company is in the process of preparing those amended income tax returns for 1999 - 2003 which will reflect refund claims for R&D tax credits. In addition, the Company’s 2004 Federal and Indiana income tax returns, when filed, will also include R&D tax credits which were not considered in the calculation of the 2004 income tax provision. During the quarter ended June 30, 2005, the Company recorded $1.5 million of tax refunds receivable, applicable to estimated refunds for prior years’ R&D tax credits, with a related credit to the 2005 income tax provision. The prior years’ R&D tax credits, recorded in the current year, increased the Company’s effective tax benefit rate by 38.5% for the quarter and 24.7% for the 2005 year-to-date. In addition, the Company expects that its effective tax rate for 2005 will be favorably impacted by 3.6% for estimated current year’s R&D tax credits and by 0.8% for additional tax deductions provided to manufacturers under the 2004 American Jobs Creation Act.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

The Company generally relies on funds from operations as its primary source of liquidity. In addition, the Company maintains a $35 million, unsecured revolving credit facility to meet its seasonal working capital needs. At June 30, 2005, there were outstanding borrowings of $2.9 million against this bank line of credit. At December 31, 2004, there were short-term borrowings of $20.0 million outstanding. During 2004, the Company also borrowed against the cash surrender value of the Company’s investments in life insurance contracts. As of June 30, 2005 and December 31, 2004, $15 million had been borrowed against the cash surrender value of Company owned life insurance contracts.

- 18 - -

At June 30, 2005, working capital decreased to $113.4 million from $121.3 million at December 31, 2004. The $1.3 million increase in current assets at June 30, 2005 versus December 31, 2004 was primarily due to increased inventories and refundable income taxes, offset by decreases in cash and cash equivalents and trade receivables. The increase in current liabilities of $9.2 million was substantially due to increased trade payables and other accrued expenses offset by a decrease in short-term borrowings.

Management believes that the Company’s existing cash and cash equivalents as of June 30, 2005, together with its available revolving credit facility and cash expected to be generated from future operations, will be sufficient to fund future planned capital expenditures and other operating cash requirements for the foreseeable future.

CRITICAL ACCOUNTING POLICIES

The preparation of the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from the Company's estimates. However, actual results may differ from these estimates under different assumptions or conditions. A summary of the Company’s more significant accounting policies that require the use of estimates and judgments in preparing the financial statements is provided in the Company’s 10-K report for the year ended December 31, 2004. During the first six months of fiscal 2005, there was no material change in the accounting policies and assumptions previously disclosed.

FORWARD-LOOKING STATEMENTS

This Form 10-Q Report contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks and uncertainties, and are dependent on various factors, many of which are outside the control of the Company. These uncertainties and other factors include, but are not limited to, the potential fluctuations in the Company’s operating results; the availability for floorplan financing for the Company's recreational vehicle dealers and corresponding availability of cash to the Company; overcapacity and discounting in the recreational vehicle industry; the impact of performance on the valuation of intangible assets; the availability and price of gasoline and diesel fuel, which can impact the sale of recreational vehicles; price volatility of raw materials used in production; the Company's dependence on chassis and appliance suppliers, which are used in the production of many of the Company's recreational vehicle products; interest rates, which affect the affordability of the Company's products; the availability and cost of real estate for residential housing; the ability of the Housing and Building Segment to perform in new market segments where it has limited experience; potential liabilities under repurchase agreements and guarantees; changing government regulations, such as those covering accounting standards; environmental matters or product warranties and recalls, which may affect costs of operations, revenues, product acceptance and profitability; legislation governing the relationships of the Company with its recreational vehicle dealers, which may affect the Company’s options and liabilities in the event of a general economic downturn; consolidation of distribution channels in the recreational vehicle industry; the impact of consumer confidence and economic uncertainty on high-cost discretionary product purchases, which can hinder the sales of recreational vehicles; the demand for commercial structures in the various industries that the Housing and Building Segment serves; and also on the state of the recreational vehicle and housing industries in the United States. Other factors affecting forward-looking statements include changes in property taxes and energy costs, changes in federal income tax laws and federal mortgage financing programs, changes in public policy, competition in these industries, the Company’s ability to increase gross margins which are critical to profitability whether there are or are not increased sales, the Company’s use of incentives at either the wholesale or retail level, further developments in the war on terrorism and related international crises, oil supplies, and other risks and uncertainties. In addition, investors should be aware that generally accepted accounting principles prescribe when a company must disclose or reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results may therefore appear to be volatile in certain accounting periods. The foregoing lists are not exhaustive, and the Company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.

At times, the Company's actual performance differs materially from its projections and estimates regarding the economy, the recreational vehicle and building industries and other key performance indicators. Readers of this Report are cautioned that reliance on any forward-looking statements involves risks and uncertainties. Although the Company believes that the assumptions on which the forward-looking statements contained herein are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or nonoccurrence of future events. There can be no assurance that the forward-looking statements contained in this Report will prove to be accurate. The inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company's objectives will be achieved.

- 19 - -

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, operations of the Company are exposed to fluctuations in interest rates. These fluctuations can vary the costs of financing and investing yields. During the first six months of 2005, the Company has utilized its revolving credit facility to meet short-term working capital needs. The Company had $2.9 million outstanding against the revolving credit facility on June 30, 2005.

In January of 2003, the Company entered into various interest rate swap agreements that became effective beginning in October of 2003. These swap agreements, which are designated as cash flow hedges for accounting purposes, effectively convert a portion of the Company’s variable-rate borrowings to a fixed-rate basis through November of 2011, thus reducing the impact of changes in interest rates on future interest expense. The fair value of the Company’s interest rate swap agreements represents the estimated receipts or payments that would be made to terminate the agreements. A loss of $27,000, net of taxes, attributable to changes in the fair value of interest rate swap agreements was recorded as a component of accumulated other comprehensive income (loss) during the second quarter of 2005. Total accumulated gain on the swap agreements for the six-month period ended June 30, 2005 was $32,000. If in the future the interest rate swap agreements were determined to be ineffective or were terminated before the contractual termination dates, or if it became probable that the hedged variable cash flows associated with the variable-rate borrowings would stop, the Company would be required to reclassify into earnings all or a portion of the unrealized losses on cash flow hedges included in accumulated other comprehensive income (loss).

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2005. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2005.

During the second quarter of 2005, the Company established a shared service center for the processing of accounts payable for its Recreational Vehicle Segment. Other than the establishment of this shared service center, there have been no changes during the quarter ended June 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Subsequent to the end of the second quarter, the shared service center also began processing of accounts payable for the Housing and Building Segment.

- 20 -

PART II. OTHER INFORMATION

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

(a)   The annual meeting of the shareholders of Coachmen Industries, Inc. was held on May 5, 2005.

(b)   The following nominees were elected Directors for three-year terms expiring in 2008:

Geoffrey B. Bloom

William P. Johnson

Rex Martin

(c)   The tabulation of votes for each Director nominee was as follows:

	For	Withheld
Geoffrey B. Bloom	14,923,107	55,028
William P. Johnson	13,875,130	1,103,005
Rex Martin	14,454,746	523,389

The terms of office of the following directors continued after the meeting:

Donald W. Hudler, Philip G. Lux, Claire C. Skinner, Robert J. Deputy, Edwin W. Miller

Item 6. Exhibits

See Index to Exhibits incorporated by reference herein.

- 21 -

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COACHMEN INDUSTRIES, INC.

(Registrant)

Date: August 8, 2005	By:	/s/ Claire C. Skinner
		Claire C. Skinner, Chairman of the
		Board and Chief Executive Officer
Date: August 8, 2005	By:	/s/ Joseph P. Tomczak
		Joseph P. Tomczak, Executive Vice
		President and Chief Financial Officer
Date: August 8, 2005	By:	/s/ Colleen A. Zuhl
		Colleen A. Zuhl, Vice President
		and Controller

- 22 -

INDEX TO EXHIBITS

Number Assigned

In Regulation

S-K, Item 601Description of Exhibit

3(a)(i)Articles of Incorporation of the Company as amended on May 30, 1995 (incorporated by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995)

3(a)(ii)Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 4.2 to the Company's Form S-3 Registration Statement, File No. 333-14579)

3(b)By-Laws as modified through March 1, 2005 (incorporated by reference to the Company's Form 8-K filed March 4, 2005)

10(e) Coachmen Industries, Inc. Supplemental Deferred Compensation Plan (Amended and Restated as of January 1, 2003)

31.1Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13(a)-14(a)/15(d)-14(a)

31.2Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13(a)-14(a)/15(d)-14(a)

32.1Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.2Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

- 23 - -

EX-10

COACHMEN INDUSTRIES, INC.

SUPPLEMENTAL DEFERRED COMPENSATION PLAN

(Amended and Restated as of

January 1, 2003)

Coachmen Industries, Inc. established the Coachmen Industries, Inc. Supplemental Deferred Compensation Plan, effective January 1, 2001, for the benefit of a select group of management and other highly compensated employees eligible to participate therein. The Employer has amended from time to time and now completely restates the Plan, effective January 1, 2003, in the form stated herein below.

ARTICLE 1

ESTABLISHMENT/PURPOSE

1.01 Purpose: This Plan is intended to permit the Employer to establish an unfunded, non-qualified deferred compensation plan for a select group of its management or highly compensated employees. Accordingly, it is intended that this Plan be exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

1.02 Adoption of Plan: The Employer, through the Committee, adopts this restatement of the Plan pursuant to a directive of the Board.

ARTICLE 2

DEFINITIONS

When used in this Plan and its Schedules, the following words shall have the meanings defined below, unless the context clearly indicates otherwise:

2.01 Account: The bookkeeping accounts maintained by the Service Provider on behalf of the Employer, with appropriate sub-accounts, to reflect: (i) Salary Deferral Contributions, contributed to the Plan, as may be elected by each Participant; (ii) Employer Contributions (whether Employer Matching Contributions, Employer Basic Contributions or Employer Special Contributions), each as adjusted for Deemed investment experience, transfers, withdrawals and distributions made in accordance with this Plan.

2.02 Affiliate: Any entity which is part of (i) a controlled group of corporations or businesses under common control pursuant to Code §§414(b) or (c); (ii) an affiliated service group pursuant to Code §414(m); or (iii) any other entity required to be aggregated with the Employer for purposes of Code §414(o).

2.03 Beneficiary: Any person who is designated by a Participant to receive payment of benefits under this Plan, to the extent available, after the Participant’s death. The Participant may specify his Beneficiaries on a form approved by the Committee, and may make such changes to his Beneficiary designation at such times as may be allowed by the Committee. Notwithstanding anything in this Plan to the contrary, if the Participant designates his spouse as a Beneficiary of benefits payable hereunder, and the Participant’s marriage to that spouse is later terminated (whether by divorce, annulment, dissolution, or otherwise), the Participant’s designation of his spouse as a Beneficiary shall be null and void, and the portion of the Participant’s benefits that would, but for this provision, be payable to the Participant’s spouse will be payable as designated in the Participant’s Beneficiary designation, as if the spouse had predeceased the Participant.

2.04 Bonus Compensation: Any item of Compensation that would be payable to a Participant as a bonus but for the existence of a Salary Reduction Agreement executed by a Participant authorizing deferral of Bonus Compensation.

2.05 Bonus Deferral Contributions: A contribution to the Plan made pursuant to Section 4.01 of the Plan, and allocated to the Accounts of Participants entering into a Salary Reduction Agreement authorizing the deferral of Bonus Compensation.

2.06 Board: The Board of Directors (or other governing board) of the Employer.

2.07 Change in Control: A Change in Control shall mean the occurrence of any of the following:

(i) any “person” (as that term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding the Employer, its affiliates, and any qualified or non-qualified plan maintained by the Company or its affiliates) becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under such Act), directly or indirectly, of securities of the Employer representing more than 20% of the combined voting power of the Employer’s then outstanding securities;

(ii) during a period of 24 months, a majority of the Board of Directors of the Employer ceases to consist of the existing membership or successors nominated by the existing membership or their similar successors;

(iii) shareholder approval of a merger or consolidation of the Employer with any other corporation, other than a merger or consolidation which would result in the voting securities of the Employer outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Employer or such surviving entity outstanding immediately after such merger or consolidation; or

(iv) shareholder approval of either (A) a complete liquidation or dissolution of the Employer or (B) a sale or other disposition of all or substantially all of the assets of the Employer, or a transaction having a similar effect.

2.08 COA Holding: That bookkeeping account maintained in the Plan for the purpose of holding contributions that are to be converted to an equivalent of the common stock of the Employer as described in Plan Section 4.04(b)(i).

2.09 Code: The Internal Revenue Code of 1986, and amendments thereto.

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2.10 Committee: The Committee as provided for in this Plan, which shall have the authority to direct the operations of the Plan and such other authority as may be prescribed by the Plan. To the extent that the Employer does not appoint a Committee, the Employer shall have the duties assigned to the Committee by the Plan.

2.11 Compensation: Any Employee’s base salary (unreduced by deferrals made on a pre-tax basis to any plan maintained under Code §§401(k) or 125) plus Bonus Compensation.

2.12 Deemed: When the word “Deemed” modifies any other word, a Participant’s Account shall be adjusted or treated as if such other word actually occurred or existed within or to the Participant’s Account.

2.13 Disability: The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months. The permanence and degree of such impairment shall be supported by medical evidence. The Employer shall determine the existence of a Disability based on its current disability policy, applied on a uniform and nondiscriminatory basis.

2.14 Effective Date: The Effective Date of this restatement is January 1, 2003.

2.15 Eligible Employee: An Employee who has been designated by the Employer to be eligible to be a Participant in this Plan for the Plan Year. Eligible Employees shall be assigned to either Group A or Group B as designated by the Employer.

2.16 Employee: Any employee of the Employer maintaining the Plan.

2.17 Employer: Coachmen Industries, Inc. and any successor to the business of the Employer establishing the Plan. An entity that is related to the Employer by virtue of being a parent-subsidiary or brother-sister controlled group with the Employer, pursuant to Code §§414(b) or (c) may also be an Employer under the Plan with the consent of the Board.

2.18 Employer Basic Contributions: Those contributions to the Plan made pursuant to §4.01 and allocated to the Accounts of Participants pursuant to Schedule B.

2.19 Employer Contribution: An Employer Basic Contribution, Employer Matching Contribution, or Employer Special Contribution.

2.20 Employer Matching Contributions: Those contributions to the Plan made pursuant to §4.01 and allocated as a matching contribution to the Salary Reduction Contributions or Bonus Deferral Contributions.

2.21 Employer Special Contribution: Those contributions to the Plan made pursuant to §4.01 and allocated pursuant to the provisions of an agreement entered into between the Employer and a Participant.

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2.22 Employment Commencement Date: The date on which an Employee first is employed by the Employer.

2.23 ERISA: The Employee Retirement Income Security Act of 1974, as amended.

2.24 Investment Fund: One of the funds provided for in this Plan, as selected by the Employer or the Committee. The common stock of the Employer may be an Investment Fund.

2.25 Normal Retirement Age: The date on which a Participant attains age 65.

2.26 Participant: An Eligible Employee who has been selected to participate in the Plan and who has contributions credited to his or her Account. An individual who has an Account in the Plan shall continue to be a Participant despite no longer being an Eligible Employee.

2.27 Plan: The non-qualified deferred compensation plan established by the Employer, which is intended to be a “top-hat” plan, as defined in Department of Labor Regulation §2520.104-23, and exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

2.28 Plan Year: The twelve-month period ending each December 31.

2.29 Qualified Plan: The Coachmen Industries, Inc. Retirement Plan and Trust, as amended from time to time.

2.30 Salary Reduction Agreement: An election of the Participant made annually to forego payment of Compensation in exchange for the Employer’s promise to pay benefits pursuant to this Plan. Such Salary Reduction Agreement, to be valid, must (i) be in writing, signed by the Participant prior to the start of the Plan Year to which it relates (except that an Eligible Employee may enter into a Salary Reduction Agreement effective for the remainder of the Plan Year in which the Participant’s participation in the Plan commences, provided that any reduction in Compensation specified in the Salary Reduction Agreement has effect only with respect to Compensation not yet earned or payable); (ii) take effect as of the start of the following Plan Year (or the date the Participant commences participation in the Plan, if later); (iii) be irrevocable during the Plan Year in which it is in effect (except that a Salary Reduction Agreement may be revoked in its entirety with respect to the remainder of the Plan Year upon election of the Participant); and (iv) be on a form and submitted as prescribed by the Committee. A Participant shall be permitted to enter into separate Salary Reduction Agreements for base pay and Bonus Compensation in a Plan Year. Any Salary Reduction Agreement in effect as of the last day of the Plan Year shall be deemed automatically renewed for each succeeding Plan Year unless a proper election modifying or terminating the prior Salary Reduction Agreement is duly filed with the Committee during the period of time prescribed by the Committee.

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2.31 Salary Reduction Contribution: A contribution made to this Plan pursuant to the Employer’s obligation to provide certain benefits in consideration of a Participant entering into a Salary Reduction Agreement.

2.32 Service Provider: That entity appointed by the Committee to perform administrative services in connection with the operation of the Plan.

2.33 Trust: The revocable grantor/rabbi trust established in connection with the Plan. The Employer or the Committee, as the case may be, shall have the discretion to determine whether or not a Trust shall be established in connection with the Plan; provided, however, in the event of a Change in Control, such discretion shall be removed from the Employer and the Committee, and a Trust shall be established (if not already in existence) and fully funded in accordance with Plan Section 4.03.

2.34 Trust Agreement: An agreement entered into between the Trustee and the Employer providing for trust services in connection with a grantor trust that may be established in connection with this Plan. As of the Effective Date, the Trust Agreement is The Amended and Restated Coachmen Industries, Inc. Executive Benefit and Estate Accumulation Trust, as amended effective December 13, 2000, and as may be amended from time to time.

2.35 Trustee: That individual or individuals or corporate entity having trust powers that is appointed by the Committee to perform trust services in connection with the Plan, whose responsibilities shall be governed by the Plan and by the Trust Agreement.

2.36 Year of Service: A consecutive 12-month period of continuous service in the employ of the Employer commencing on the latest of: (i) the Employee’s Employment Commencement Date; (ii) the effective date of the Employer’s establishment of this Plan; or (iii) the date the Employee becomes a Participant in the Plan.

ARTICLE 3

ELIGIBILITY AND PARTICIPATION

3.01 Eligibility: Employees will be designated as Eligible Employees and will be assigned as either Group A or Group B Participants in the sole and absolute discretion of the Board (or its designee). The Board (or its designee) may impose such terms and conditions upon each Eligible Employee prior to becoming a Participant, which shall be communicated to such Eligible Employee, in writing, prior to commencement of participation. An Eligible Employee shall commence Participation as of any date specified by the Board.

3.02 Participation: A Participant shall commence participation in Plan upon completion of an appropriate Salary Reduction Agreement specifying that his or her compensation be reduced, or by being credited with an Employer Contribution to his or her Account.

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ARTICLE 4

CONTRIBUTIONS/ACCOUNTS

4.01 Contributions: In accordance with this Plan and the agreement entered into with the Participant, the Employer shall establish each of the following book entries and credit each Participant’s Account with:

a) Salary Reduction Contributions: The amount of any Salary Reduction Contribution elected by an Eligible Employee in a Salary Reduction Agreement for the Plan Year;

b) Bonus Deferral Contributions: The Amount of any Bonus Deferral Contribution elected by an Eligible Employee in a Salary Reduction Agreement for the Plan Year;

c) Employer Basic Contributions: An amount, as determined in the sole discretion of the Employer, which will be allocated to the Accounts of Participants pursuant to an allocation formula specified by the Board. There shall be no requirement that a Basic Contribution be made, or if made, that it be made in the same amount or for any or all Participants in the Plan;

d) Employer Matching Contributions: A contribution made on account of a Participant’s Salary Reduction Contribution, which amount is described in Schedule A of the Plan.

e) Employer Special Contributions: An amount determined and allocated according to the Board. There is no requirement that any Employer Special Contribution be made, or if made, that it be made in the same amount or for any or all Participants in the Plan.

Benefits payable pursuant to this Plan shall be calculated with reference to the contributions credited to the Participant’s Account, together with any adjustments made thereto pursuant to the provisions of this Plan.

4.02 Participant Accounts: Each Participant shall have established an Account (with sub-accounts as may be appropriate) which shall reflect any contributions credited pursuant to Section 4.01 of this Plan. All contribution credits shall be bookkeeping entries only and shall not constitute an actual allocation of any assets of the Employer, or be deemed to create any trust, custodial account, or deposit with respect to any assets which may be utilized to satisfy the obligation of the Employer to provide the benefits specified in this Plan.

4.03 Rabbi Trust:

a)

Unsecured Obligation: The obligation of the Employer to provide benefits pursuant to this Plan shall be the sole unsecured promise of the Employer with respect to this Plan. Notwithstanding the foregoing, the Employer or the Committee may establish a trust, pursuant to a Trust Agreement, for the purpose of setting aside funds to provide for the payment of benefits under this Plan. However, the assets of the Trust shall at all time remain subject to the claims of the general creditors of the Employer, and no Participant or Beneficiary shall have any claim or right with respect to the assets held in the Trust, except to the extent that the Participant or Beneficiary is a general creditor of the Employer.

b)

Springing Trust: Notwithstanding anything in this Plan (or the Trust Agreement) to the contrary, upon a Change in Control, the Employer shall (i) establish a trust (if not already established) as described in Plan Section 2.33, (ii) maintain in the Trust an amount of money which is at all times at least equal to its obligations under this Plan by making sufficient contributions to the Trust, immediately upon such Change in Control in an amount equal to the Plan’s total liabilities; and (iii) direct the Trustee to invest the assets of the Trust proportionally in accordance with investment directions given by each Participant.

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4.04 Investments:

a)	Generally: To the extent that the Employer establishes a Trust, such contributions made to the Trust shall be invested in one or more Investment Funds as selected by the Committee. At the discretion of the Employer, a Participant may be entitled to request that his or her Account be adjusted for investment gains and losses, as if invested in one or more Investment Funds in accordance with a Deemed investment election of a Participant. Deemed investment elections may be (i) made with respect to existing Account balances or current contributions to the Participant’s Account, and (ii) shall be subject to any limitations imposed by the Committee from time to time, and made by such means as the Employer and Trustee may agree. The Employer or Service Provider (as the case may be) shall make such adjustments in Participants’ Accounts to reflect any investment gains or losses such Participants’ Accounts would experience if funds were actually invested in one or more Investment Funds pursuant to the Participant’s election.
b)	Rules for Investment Changes: Participants may make changes in Deemed investment elections at such time, and in such manner as may be specified by the Committee. Any Deemed investment election, or changes to Deemed investment elections, shall remain in effect until further changed by the Participant. Notwithstanding the preceding sentence, the following rules shall apply to a Participant for whom a Matching Employer Contributions sub-Account is maintained:
	i)	Beginning each calendar quarter on and after January 1, 2003, any contribution that is to be Deemed invested in the common stock of the Employer and any Deemed dividends paid on amounts Deemed to be invested in the common stock of the Employer shall be accumulated in COA Holding until the last business day of the calendar quarter. On such last business day, the closing price of one share of the Employer’s common stock on the first business day of the calendar quarter shall be compared with the closing price of one share of the Employer’s common stock on the last business day of the calendar quarter, and amounts tracked on behalf of each Participant in COA Holding shall be converted to Deemed shares of the Employer by dividing the total amount in COA Holding by the lower of the first business day closing price or the last business day closing price and by allocating those shares to each Participant based on his or her contributions. Once allocated to Participants, the Deemed shares are credited to the Participants’ appropriate sub-Accounts and COA Holding is reduced to zero. The closing prices shall be as provided on the New York Stock Exchange Composite Transaction Tape and reported in the Wall Street Journal, Midwest Edition, or as reported in another reputable publication (determined at the sole discretion of the Committee) if the Wall Street Journal is not available for the respective dates. All calculations shall include fractional shares carried to the ninth decimal place.

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ii)	A Participant shall not be permitted to redirect the Deemed investment of his Matched Stock Account any time prior to the calendar year in which he attains age fifty-five (55). In the calendar year in which the Participant attains age fifty-five (55), and in any calendar year thereafter until the Participant attains age sixty-five (65), a Participant may redirect the Deemed investment of up to twenty percent (20%) of his or her Matched Stock Account balance among the other Investment Funds available in the Plan.
iii)	Notwithstanding the redirection provisions of this Section 4.04, a Participant may redirect the Deemed investment of his or her Matched Stock Account any time following the attainment of age sixty-five (65) or a Change in Control. A Beneficiary of a Participant shall have the right to redirect the Deemed investment of the Participant’s Matched Stock Account at any time following the Participant’s death.
iv)	A Participant who elects to receive a payment in the form of Employer stock for the amount represented by the Matched Stock Account will receive shares restricting his or her right or ability to sell or transfer such shares until the Participant has attained age fifty-five (55).
v)	For so long as Employer stock is a Deemed investment under the Plan, no Participant shall have the right to direct the vote or tender any Employer stock that is Deemed to be credited to his Account.
vi)	The Committee may in its sole discretion refuse to recognize participant elections that it determines may cause the Participant’s Accounts to become subject to the short-swing profit provisions of Section 16b of the Securities Exchange Act of 1934 and establish special election procedures for participants subject to Section 16 of such Act.

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4.05 Employer Stock: Deemed purchases and allocations of Employer stock to the bookkeeping entry Accounts of Plan Participants shall occur on a quarterly basis. Deemed purchases shall be allocated to such Accounts as of the last business day of each calendar quarter and shall be valued at the lesser of the stock’s closing price on the New York Stock Exchange on either the first business day of the quarter or the last business day of the quarter. Nothing herein shall be deemed to prevent the maintenance in the Participants’ Accounts of fractional shares. All dividends payable on the Employer’s common stock shall be Deemed to be reinvested in additional shares of the Employer’s common stock. Those additional shares attributable to the Matched Stock Account shall be credited to the Matched Stock Account and any other dividends Deemed received will be credited to the respective sub-Account that is not the Matched Stock Account.

4.06 Provisions Upon a Change in Control: If there occurs Change in Control, in addition to other requirements of the Plan, the Board may take any additional actions deemed reasonably necessary or desirable to accomplish the stated purposes of this Plan, and the Committee may cause the contribution by the Employer of any amount equal to up to three (3) years of additional Participant Contributions for select Group “A” Participants as determined by the Plan Sponsor, along with the Employer Matching Contributions to the Plan that would have been paid on such Participant Contributions, as if the Participants in Group “A” had contributed the maximum fifteen percent (15%) of base salary and Bonus Compensation each year.

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ARTICLE 5

VESTING AND FORFEITURE

5.01 Vesting

a)	A Participant’s sub-Account consisting of his or her Salary Reduction Contributions and Bonus Deferral Contributions, adjusted for Deemed earnings and losses thereon, shall always be 100% vested.
b)	A Participant's sub-Accounts consisting of Employer Contributions, adjusted for Deemed earnings and losses thereon shall be vested according to the vesting schedule prescribed in either Schedule A or Schedule B, as applicable.
c)	Notwithstanding the preceding provisions of this Section 5.01, a Participant shall be 100% vested in the value of his sub-Accounts consisting of Employer Contributions adjusted for Deemed earnings and losses thereon upon the earliest to occur of any of the following: (i) a Change in Control; (ii) termination of employment with the Employer as a result of the Participant’s death or Disability; (iii) termination of employment at or after Normal Retirement Age; or (iv) effective January 1, 2003, a termination of employment as a result of such other extenuating circumstance, as the Committee shall determine, in its sole discretion.

5.02 Forfeitures: The Participant shall forfeit any portion of his or her Account that is not vested at the time the Participant terminates employment with the Employer. Additionally, the Participant shall forfeit all of his or her Account attributable to Employer Contributions and Deemed earnings and losses thereon, regardless of the extent to which such Account is vested under Section 5.01 of the Plan, if the Participant, without the express written consent of the Employer and within six (6) months following his or her termination of employment with the Employer or its Affiliates, works in any capacity for or on behalf of any direct competitor (including the competitor’s affiliates) of the Employer or of any of its Affiliates and during such time violates his or her “Business Protection Agreement” with the Employer or its Affiliates, including the post-termination-of-employment restrictions on competition with the Employer, solicitation of the Employer’s employees, or solicitation of the Employer’s or its Affiliates’ vendors or customers (regardless of the enforceability of any such restrictions).

5.03 Non-vested Amounts: To the extent that the Employer has made a contribution to the Trust in connection with respect to this Plan, the amount of any such contributions held in trust and forfeited pursuant to Section 5.02 shall be returned to the Employer if the Trust is revocable; or if not revocable, then the forfeited amounts shall continue to be held in trust until full satisfaction of all of Employer’s obligations under this Plan.

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ARTICLE 6

BENEFITS/PAYMENTS

6.01 General: A Participant shall be entitled to receive a benefit, when payable pursuant to the terms of this Plan, in an amount equal to the total value of all vested contributions credited to his or her Account, and adjusted for any Deemed investment gains or losses. All benefit payments shall be made by the Employer, except as may be provided for in the Trust Agreement. All appropriate taxes, as determined by the Employer, shall be withheld from any payment distribution, as may be required by law, and remitted to the appropriate taxing authority by the Employer, or its agent.

6.02 Payment Events: A Participant shall be entitled to receive a distribution from the Plan, pursuant to his or her election as to the form of distribution in accordance with the following:

a)	Salary Reduction and Bonus Reduction Accounts: A Participant shall receive the balance of his or her Salary Reduction and Bonus Reduction sub-Accounts, adjusted for Deemed earnings and losses thereon, as soon as practicable following his or her termination of employment, in conformity with the Employer’s payroll practices, but no later than 100 days following the Participant’s termination of employment.
b)	Employer Contribution Sub-Accounts: A Participant shall receive the balance of his or her Employer Contribution sub-Accounts that have not been forfeited under Section 5.02 of the Plan six (6) months following his or termination of employment with the Employer and all of its Affiliates.
c)	Change in Control: Notwithstanding the provisions of paragraphs (a) and (b) above, a Participant shall receive the vested balance of his or her entire Account as soon as practicable following the third anniversary of a Change in Control, regardless of whether such Participant has incurred a termination of employment from the Employer or its Affiliates. If there occurs a Change in Control, the Committee and the Employer shall direct the Trustee to remit to the Employer amounts necessary to pay any taxes that may be due for such payments to the Participant within the time period described herein. After remittance of the tax reimbursement to the Employer, the Trustee shall remit the balance of the remaining account balances maintained on behalf of the Participant directly to the Participant. The Trustee shall not be responsible for the preparation of any tax reporting materials, nor the remittance of any such taxes, to any tax authorities. Such responsibilities shall be exclusively the responsibility of the Employer.

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6.03 Form of Payment:

a)	A Participant shall irrevocably elect to receive a payment of his or her benefits in either a single lump sum payment or annual installment payments over a period that shall not be less than 10 annual installments.
b)	A Participant’s benefits shall be paid to him or her in cash only.

6.04 Death Distributions: To the extent not forfeited pursuant to the terms of this Plan, upon the death of the Participant, any benefit to which the Participant would be entitled to (but for his or her death) shall be paid to the Participant’s Beneficiary or Beneficiaries in a form elected by the Participant. To the extent the Participant has not designated a Beneficiary to receive his or her benefits pursuant to this Plan, the Participant’s benefits (or the portion thereof not so payable to a Beneficiary) shall be paid to the Participant’s estate.

6.05 Valuation of Benefit Payments: Each day that the New York Stock Exchange is open shall be a valuation date for the Plan. For purposes of assigning a value to a distribution to occur under either Sections 6.02 or 6.04 of the Plan, the Committee (or in the case of a Change in Control, the Trustee), shall designate the value of the Participant’s Account as of the date or dates such Account is to be paid out to the Participant.

ARTICLE 7

ADMINISTRATION OF THE PLAN

7.01 Plan Administration: The Plan shall be administered by the Committee. A Participant who also is a member of the Committee shall not participate in any decision involving such individual’s rights, duties and obligations as a Participant under the Plan, if such participation constitutes a conflict of interest. Subject to the limitations of Section 8.01 of the Plan, any action to be taken by the Employer in the Plan may be taken by the Committee.

7.02 Committee Action: A majority of the Committee (if it has more than two members) shall constitute a quorum for the transaction of business. All actions taken by the Committee at a meeting shall be by the vote of a majority of those present at such meeting but any action may be taken by the Committee without a meeting upon written consent signed by all of the members of the Committee. The Committee is expressly authorized to delegate any and all authority granted it under this Plan to any employee of the Company, or to any other person.

7.03 Plan Rules and Regulations: The Committee may from time to time establish rules and regulations for the administration of the Plan and adopt standard forms to be used under the Plan, such as beneficiary designation forms, provided such rules and forms are not inconsistent with the provisions of the Plan. Any duties or responsibilities of the Committee may be delegated to any individual employee or departmental function within the Company.

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7.04 Determinations by Committee: All determinations of the Committee, irrespective of their character or nature, including, but not limited to, all questions of construction and interpretation, shall be final, binding and conclusive on all parties. The Committee shall have discretionary authority in making all decisions under the Plan, including factual determinations. In construing or applying the provisions of the Plan, the Committee shall have the right to rely upon a written opinion of legal counsel, which may be independent legal counsel or legal counsel regularly employed by the Company, whether or not any question or dispute has arisen as to any distribution from the Plan.

7.05 Plan Records: The Committee shall be responsible for maintaining books and records for the Plan. Each Participant or the Participant’s beneficiary or Representative shall be notified annually of the balance in the Participant’s Account including the vested portion thereof.

7.06 Plan Expenses: The Company shall pay all expenses of administering the Plan.

7.07 Claim Procedure: Any person who believes he or she is being denied rights or benefits under the Plan may file a written claim with the Committee. The Committee will notify the claimant in writing if the claim is denied. The notice will: (i) state the reasons for the denial, (ii) reference pertinent Plan provisions on which the denial is based, (iii) describe any additional material or information needed; and (iv) state the steps to be taken to request review of the decision. The notice will be given within 90 days after the Committee receives the claim (or within 180 days if special circumstances require an extension and written notice of the extension and circumstances is given to the claimant within the initial 90 day period). If the notice is not given within this period, the claim will be considered denied as of the last day of such period and the claimant may request review of the claim.

7.08 Review Procedure: Within 60 days of receipt by the claimant of the written notice of denial of the claim, or within 60 days after the claim is deemed denied, the claimant may file a written request with the Committee for review of the denied claim, including the conducting of a hearing, if deemed necessary by the Committee. The claimant may review pertinent documents and submit issues and comments in writing. The Committee will give its written decision on the claim appeal promptly, but not later than 60 days after the receipt of the claimant’s request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time, in which case the 60 day period may be extended to 120 days. The Committee shall notify the claimant in writing of the extension. The decision on review will: (i) state the reasons for the decision, and (ii) contain references to pertinent Plan provisions upon which the decision is based.

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ARTICLE 8

MISCELLANEOUS

8.01 Amendment or Termination: The Employer reserves the right to amend or terminate this Plan or its Trust (including the ability to revoke the Trust, but subject to Plan Section 4.03) at any time, or from time to time, in any respect, retroactively or prospectively, by written instrument adopted by the Committee, provided, however, that any amendment to the Plan intended to change the level or type of benefits provided under the Plan (whether by increasing or decreasing such benefits) must be approved by a written instrument adopted by the Compensation Committee of the Board. No amendment or termination of the Plan shall reduce, diminish, or otherwise alter the right of a Participant or Beneficiary to benefits to which he or she was entitled, had the Participant terminated employment with the Employer on the day before the effective date of the amendment or termination.

8.02 Spendthrift Provisions: Participants and Beneficiaries shall have no right of anticipation of any benefits hereunder, and may not sell, transfer, assign, pledge, attach, or otherwise alienate any benefits payable hereunder. Any such attempt at alienation shall be void, and not obligate the Employer, Committee, or Trustee, or their agents or designees, except to the extent provided for in this Plan.

8.03 Non-contractual Plan: Nothing contained in this Plan shall be construed as a commitment or agreement on the part of the Employer to continue the employment of any person employed by the Employer; to continue the employment of any person employed by the Employer; to continue employment of any person at any rate of pay or salary; or diminish the right of the Employer to discharge any Employee. The provisions of this Plan shall not operate as a guarantee that sufficient assets will exist for the Employer to pay any benefits pursuant to this Plan. Participants shall be general creditors of the Employer with respect to benefits payable hereunder.

8.04 Severability: To the extent that any provision of this Plan is deemed to be unenforceable, or would in any way cause this Plan to be subject to Parts 2, 3 or 4 of Title I of ERISA, it shall be deemed severed from this Plan, of no further force or effect, and shall not affect any other provision of this Plan which shall continue without the offending provision.

8.05 Governing Law: The provisions of this Plan shall be governed by the laws of the State of Indiana to the extent not preempted by federal law.

8.06 Corporate Successors: This Plan shall not automatically be terminated upon the sale, transfer, merger, or other conveyance of the Employer to, or with, another entity, but shall survive unless amended or terminated pursuant to Section 8.01 of the Plan.

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Executed on this the day of March, 2003.

THE COMMITTEE:

Chief Financial Officer

Controller

Treasurer

Sr. Vice President - Human Resources

30271007.1

3/14/03

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SCHEDULE A

Employees designated to be in the Plan as Group “A” Participants shall be administered within the parameters of this Schedule A. Schedule A is sometimes referred to as the Supplemental Executive Retirement Plan or “SERP”.

1.Eligibility: Group A Participants are eligible to participate in the Plan effective January 1, 2001. Participants are not required to first contribute to the Qualified Plan to be eligible to defer in this Plan.

2.Deferral Limits: Group A Participants may elect to defer no less than 1% nor more than 15% of each of his or her base salary and his or her Bonus Compensation into this Plan.

3.Employer Matching Contribution: Until modified by the Committee or the Board, Group A Participants shall receive an Employer Matching Contribution each pay period in an amount equal to 50% of the amount deferred by the Group A Participant for such week. Fifty percent of the Employer Matching Contribution shall be Deemed to be invested Employer common stock; the remaining 50% shall be Deemed to be invested in accordance with Plan Section 4.04.

4.Vesting: Employer Contributions for Group A Participants shall vest according to the following, subject to Plan Section 5.01:

Years of Service	Percent Vested
0-4	0%
5 or more	100%

SCHEDULE B

Employees designated to be in the Plan as Group “B” Participants shall be administered within the following parameters of this Schedule B. Schedule B is sometimes referred to as the “Mirror Plan” or Excess Benefit Plan.

1.Eligibility: Group B Participants are eligible to Participate in the Plan effective January 1, 2001. Group B Participants must participate in the Qualified Plan up to the limitations prescribed by the Qualified Plan.

2.Deferral Limits: Group B Participants may elect to defer no less than 1% nor more than 15% of each of his or her base salary and his or her Bonus Compensation into this Plan; provided, however, that the combined contributions between the Qualified Plan and this Plan may not exceed 20% of the Participant’s Compensation.

3.Employer Matching Contribution: Until modified by the Committee or the Board, Group B Participants shall receive an Employer Matching Contribution each pay period in an amount equal to 40% of the amount deferred by such Participant for such pay period, taking into account no more than 6% of such Participant’s Compensation deferred through this Plan and the Qualified Plan for such pay period. Fifty percent of the Employer Matching Contribution shall be Deemed to be invested Employer common stock; the remaining 50% shall be Deemed to be invested in accordance with Plan Section 4.04.

4.Vesting: Employer Contributions for Group B Participants shall vest according to the following, subject to Plan Section 5.01:

Years of Service	Percent Vested
1	20%
2	40%
3	60%
4	80%
5	100%

TABLE OF CONTENTS

ARTICLE 1		1
1.01	Purpose	1
1.02	Adoption of Plan	1
ARTICLE 2		1
2.01	Account	1
2.02	Affiliate	1
2.03	Beneficiary	1
2.04	Bonus Compensation	2
2.05	Bonus Deferral Contributions	2
2.06	Board	2
2.07	Change of Control	2
2.08	COA Holding	2
2.09	Code	2
2.10	Committee	3
2.11	Compensation	3
2.12	Deemed	3
2.13	Disability	3
2.14	Effective Date	3
2.15	Eligible Employee	3
2.16	Employee	3
2.17	Employer	3
2.18	Employer Basic Contributions	3
2.19	Employer Contribution	3
2.20	Employer Matching Contributions	3
2.21	Employer Special Contribution	3
2.22	Employment Commencement Date	4
2.23	ERISA	4
2.24	Investment Fund	4
2.25	Normal Retirement Age	4
2.26	Participant	4
2.27	Plan	4
2.28	Plan Year	4
2.29	Qualified Plan	4
2.30	Salary Reduction Agreement	4
2.31	Salary Reduction Contribution	5
2.32	Service Provider	5
2.33	Trust	5
2.34	Trust Agreement	5
2.35	Trustee	5
2.36	Year of Service	5
ARTICLE 3		5
3.01	Eligibility	5
3.02	Participation	5
ARTICLE 4		6
4.01	Contributions	6
4.02	Participant Accounts	6
4.03	Rabbi Trust	6
4.04	Investments	7
4.05	Employer Stock	9
4.06	Provisions Upon a Change in Control	9
ARTICLE 5		10
5.01	Vesting	10
5.02	Forfeitures	10
5.03	Non-vested Amounts	10
ARTICLE 6		11
6.01	General	11
6.02	Payment Events	11
6.03	Form of Payment	12
6.04	Death Distributions	12
6.05	Valuation of Benefit Payments	12
ARTICLE 7		12
7.01	Plan Administration	12
7.02	Committee Action	12
7.03	Plan Rules and Regulations	12
7.04	Determinations by Committee	13
7.05	Plan Records	13
7.06	Plan Expenses	13
7.07	Claim Procedure	13
7.08	Review Procedure	13
ARTICLE 8		14
8.01	Amendment or Termination	14
8.02	Spendthrift Provisions	14
8.03	Non-contractual Plan	14
8.04	Severability	14
8.05	Governing Law	14
8.06	Corporate Successors	14

EX-31

Exhibit 31.1

CERTIFICATION

I, Claire C. Skinner, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Coachmen Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a) - 15(e) and 15(d) - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a) - 15(f) and 15(d) - 15(f), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 8, 2005
	By:	/s/ Claire C. Skinner
		Claire C. Skinner
		Chairman of the Board and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Joseph P. Tomczak, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Coachmen Industries, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a) - 15(e) and 15(d) - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a) - 15(f) and 15(d) - 15(f), for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 8, 2005
	By:	/s/ Joseph P. Tomczak
		Joseph P. Tomczak
		Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Coachmen Industries, Inc. (the “Company”) for the quarterly period ended June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Claire C. Skinner, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period(s) covered in the Report.

	By:	/s/ Claire C. Skinner
		Claire C. Skinner
		Chairman of the Board and Chief Executive Officer
Date: August 8, 2005

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Coachmen Industries, Inc. (the “Company”) for the quarterly period ended June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Joseph P. Tomczak, Executive Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period(s) covered in the Report.

	By:	/s/ Joseph P. Tomczak
		Joseph P. Tomczak
		Executive Vice President and Chief Financial Officer
Date: August 8, 2005