10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2008.

OR

o  TRANSITION 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 of incorporation or organization)	(IRS Employer Identification No.)

423 North Main Street, Middlebury, Indiana	46540
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (574) 825-5821

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o    No x

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

Number of shares of Common Stock, without par value, outstanding as of the close of business on June 30, 2008:  15,873,722

FORM 10-Q
INDEX
PartI. Financial Information	Page
Financial Statements:
Consolidated Balance Sheets at June 30, 2008 and December 31, 2007	3
Consolidated Statements of Operations for the three and six months ended June 30, 2008 and 2007	4
Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007	5
Notes to Consolidated Financial Statements	6-13
Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-20
Quantitative and Qualitative Disclosures About Market Risk	21
Controls and Procedures	21
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders	22
Item 6. Exhibits	22
Signatures	23
Index to Exhibits	24

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 Coachmen Industries, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)

		June 30,			December 31,
		2008			2007
Assets		(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	2,279		$	1,549
Trade receivables, less allowance for doubtful receivables 2008 - $849 and 2007 - $744		23,943			9,122
Other receivables		6,044			3,819
Refundable income taxes		1,556			1,628
Inventories		80,983			79,268
Prepaid expenses and other		1,752			3,804
Assets held for sale		5,021			-
Total current assets		121,578			99,190
Property, plant and equipment, net		46,055			52,932
Goodwill		12,993			12,993
Cash value of life insurance, net of loans		26,469			33,936
Other		7,903			8,617
TOTAL ASSETS	$	214,998		$	207,668
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Short-term borrowings	$	32,392		$	20,073
Accounts payable, trade		19,356			15,042
Accrued income taxes		497			536
Accrued expenses and other liabilities		26,900			33,235
Floorplan notes payable		3,390			4,116
Current maturities of long-term debt		819			852
Total current liabilities		83,354			73,854
Long-term debt		2,975			3,010
Deferred income taxes		1,990			1,990
Postretirement deferred compensation benefits		6,832			7,632
Other		49			49
Total liabilities		95,200			86,535
COMMITMENTS AND CONTINGENCIES(Note 9)
SHAREHOLDERS' EQUITY
Common shares, without par value: authorized 60,000 shares; issued 2008 - 21,200 shares and 2007 - 21,180 shares		92,629			92,552
Additional paid-in capital		7,643			7,856
Accumulated other comprehensive loss		(44	)		(48	)
Retained earnings		78,291			79,927
Treasury shares, at cost, 2008 - 5,327 shares and 2007 - 5,402 shares		(58,721	)		(59,154	)
Total shareholders' equity		119,798			121,133
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	214,998		$	207,668

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,
	2008			2007				2008			2007
Net sales	$	96,708		$	149,763			$	218,026		$	280,006
Cost of sales		89,832			143,769				200,287			272,586
Gross profit		6,876			5,994				17,739			7,420
Operating expenses:
Selling		4,821			5,939				9,418			11,752
General and administrative		4,379			6,976				8,912			13,210
Gain on sale of assets, net		(39	)		(22	)			(247	)		(467	)
Goodwill impairment charge		-			3,872				-			3,872
		9,161			16,765				18,083			28,367
Operating loss		(2,285	)		(10,771	)			(344	)		(20,947	)
Nonoperating (income) expense:
Interest expense		1,110			944				2,138			1,787
Investment income		(260	)		(479	)			(554	)		(953	)
Other income, net		(172	)		(119	)			(292	)		(215	)
		678			346				1,292			619
Loss before income taxes		(2,963	)		(11,117	)			(1,636	)		(21,566	)
Income tax credit		-			(994	)			-			(995	)
Net loss	$	(2,963	)	$	(10,123	)		$	(1,636	)	$	(20,571	)
Loss per share - Basic & Diluted	$	(.18	)	$	(.64	)		$	(.10	)	$	(1.31	)
Number of common shares used in the computation of loss per share:
Basic		15,774			15,726				15,762			15,722
Diluted		15,774			15,726				15,762			15,722
Cash dividends declared per common share	$	-		$	.03			$	-		$	.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,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,636	)	$	(20,571	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,688			3,011
Provision for doubtful receivables, net of recoveries		234			314
Net realized and unrealized gains on derivatives		4			9
Goodwill impairment charge		-			3,872
Gains on sale of properties and other assets, net		(247	)		(467	)
Increase in cash surrender value of life insurance policies		(544	)		(1,120	)
Deferred income tax provision (benefit)		-			(1,659	)
Other		(580	)		1,337
Changes in certain assets and liabilities:
Trade receivables		(16,870	)		(13,336	)
Inventories		(1,715	)		8,640
Prepaid expenses and other		2,052			1,944
Accounts payable, trade		4,314			14,295
Income taxes - accrued and refundable		33			7,599
Accrued expenses and other liabilities		(6,335	)		(4,600	)
Net cash used in operating activities		(18,602	)		(732	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of properties and other assets		630			808
Investments in life insurance policies		(1,989	)		(1,509	)
Purchases of property and equipment		(1,036	)		(1,702	)
Other		125			387
Net cash used in investing activities		(2,270	)		(2,016	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings		16,813			10,659
Payments of short-term borrowings		(5,220	)		(6,272	)
Payments of long-term debt		(68	)		(164	)
Proceeds from borrowings on cash value of life insurance policies		19,000			-
Payments of borrowings on cash value of life insurance policies		(9,000	)		-
Issuance of common shares under stock incentive plans		77			88
Cash dividends paid		-			(944	)
Purchases of common shares for treasury		-			(15	)
Net cash provided by financing activities		21,602			3,352
Increase in cash and cash equivalents		730			604
CASH AND CASH EQUIVALENTS:
Beginning of period		1,549			2,651
End of period	$	2,279		$	3,255
Supplemental disclosures of cash flow information:
Operating cash received during the period related to insurance settlement	$	600,000		$	-

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 by Coachmen Industries, Inc. (“the Company”), without audit, in accordance with accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States for complete financial statements. Management believes the disclosures made in this document are adequate so as not to make the information presented misleading.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements, taken as a whole, contain all adjustments which are of a normal recurring nature necessary to present fairly the financial position of the Company as of June 30, 2008, and the results of its operations and cash flows for the interim periods presented. Operating results for the six-month period ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2007.

Adoption of New Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 also expands financial statement disclosure requirements about a company’s use of fair value measurements, including the effect of such measures on earnings. SFAS No. 157 was effective for fiscal years beginning after November 15, 2007.

The Company adopted the provisions of SFAS No. 157 related to its financial assets and liabilities in the first quarter of 2008, which did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Assets or liabilities that have recurring fair value measurements are shown below as of June 30, 2008 (in thousands):

				Fair Value Measurements at Reporting Date Using
				Quoted Prices in
				Active Markets		Significant			Significant
				For Identical		Other Observable			Unobservable
				Assets		Inputs			Inputs
	Total as of
Description	June 30, 2008			(Level 1)		(Level 2)			(Level 3)
Cash	$	2,279		$	2,279	$	-		$	-
Interest Rate Swap (1)		(44	)		-		(44	)		-
Net	$	2,235		$	2,279	$	(44	)	$	-

(1) Included in other long-term liabilities on consolidated balance sheet.

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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 and Housing. The Company evaluates the performance of its segments based primarily on net sales and pre-tax income and allocates resources to them based on performance. There are no inter-segment revenues. The Company allocates certain corporate expenses to these segments based on three dimensions: revenues, subsidiary structure and number of employees. Differences between reported segment amounts and corresponding consolidated totals represent corporate income or expenses for administrative functions and income, costs or expenses relating to property and equipment 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 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net sales
Recreational vehicles	$	58,781		$	111,227		$	149,260		$	215,379
Housing		37,927			38,536			68,766			64,627
Consolidated total	$	96,708		$	149,763		$	218,026		$	280,006
Gross profit
Recreational vehicles	$	(251	)	$	(69	)	$	4,942		$	(935	)
Housing		7,127			6,063			12,798			8,356
Other reconciling items		-			-			(1	)		(1	)
Consolidated total	$	6,876		$	5,994		$	17,739		$	7,420
Operating expenses
Recreational vehicles	$	6,738		$	12,181		$	13,023		$	19,253
Housing		4,027			5,016			8,317			10,037
Other reconciling items		(1,604	)		(432	)		(3,257	)		(923	)
Consolidated total	$	9,161		$	16,765		$	18,083		$	28,367
Operating income (loss)
Recreational vehicles	$	(6,989	)	$	(12,250	)	$	(8,082	)	$	(20,188	)
Housing		3,100			1,047			4,481			(1,681	)
Other reconciling items		1,604			432			3,257			922
Consolidated total	$	(2,285	)	$	(10,771	)	$	(344	)	$	(20,947	)
Pre-tax income (loss)
Recreational vehicles	$	(6,868	)	$	(12,270	)	$	(7,924	)	$	(20,315	)
Housing		3,051			1,096			4,409			(1,581	)
Other reconciling items		854			57			1,879			330
Consolidated total	$	(2,963	)	$	(11,117	)	$	(1,636	)	$	(21,566	)

	June 30,		December 31,
	2008		2007
Total assets
Recreational vehicles	$	91,320	$	86,816
Housing		63,844		54,601
Other reconciling items		59,834		66,251
Consolidated total	$	214,998	$	207,668

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3. INVENTORIES.

Inventories consist of the following (in thousands):

	June 30,		December 31,
	2008		2007
Raw materials
Recreational vehicles	$	14,967	$	11,789
Housing		5,757		5,989
Consolidated total		20,724		17,778
Work in process
Recreational vehicles		8,516		12,913
Housing		5,172		2,941
Consolidated total		13,688		15,854
Improved lots
Housing		670		645
Consolidated total		670		645
Finished goods
Recreational vehicles		35,534		34,038
Housing		10,367		10,953
Consolidated total		45,901		44,991
Consolidated total	$	80,983	$	79,268

4.   LONG-TERM ASSETS

Property, Plant and Equipment

Property, plant and equipment consist of the following (in thousands):

	June 30, 2008		December 31, 2007
Land and improvements	$	10,848	$	11,452
Buildings and improvements		53,117		59,765
Machinery and equipment		24,323		24,429
Transportation equipment		13,499		14,654
Office furniture and fixtures		17,233		17,274
Total		119,020		127,574
Less, accumulated depreciation		72,965		74,642
Property, plant and equipment, net	$	46,055	$	52,932

At June 30, 2008, the Company had $5.0 million classified in assets held for sale. These assets were available and listed for sale during the first and second quarters of 2008. Housing Segment property and buildings accounted for the majority of these assets, including the former manufacturing facility in Zanesville, Ohio that was consolidated into a larger Indiana manufacturing plant, plus a warehouse and office building in Decatur, Indiana. In addition, with the relocation of the corporate offices to Middlebury, Indiana, the former corporate office building and land in Elkhart, Indiana are also held for sale.

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4.   LONG-TERM ASSETS, continued.

Notes Receivable – Variable Interest Entities

The Company has a note receivable of $2.5 million due from Miller Building Systems, Inc. resulting from the sale of its interest in the capital stock of Miller Building Systems, Inc. for $11.5 million, consisting of cash of $9.0 million and a $2.5 million secured note on March 31, 2006. The note, $2.4 million of which is included in other long-term assets and $0.1 million in other receivables on the Consolidated Balance Sheet, is to be repaid over 5 years and bears interest at the 1 year LIBOR rate plus 2.75% per annum with quarterly interest payments beginning September 30, 2006. Principal payments of $125,000 per quarter commence on June 30, 2009 and continue through the maturity date of March 31, 2011. In October 2007, a subsequent agreement with Miller Building Systems waived the interest on the secured $2.5 million note for two years; hence no interest will be earned from March 31, 2007 to March 31, 2009.  

In December 2007, the Company entered into an agreement to produce ADA compliant low floor accessible buses for ARBOC Mobility LLC., a marketer of specialized transit and shuttle buses designed for users with mobility challenges.  This bus incorporates patent pending technologies provided by ARBOC Mobility. In connection with the agreement with ARBOC Mobility LLC, the Company agreed to finance up to $1.0 million of start up costs. As of June 30, 2008, the Company also has a note receivable of $0.9 million due from ARBOC Mobility LLC. The note is on a month-by-month basis and bears interest at the rate of 1% per month on the principal balance. The note is included in other receivables on the Consolidated Balance Sheet.

5. ACCRUED EXPENSES AND OTHER LIABILITIES.

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

	June 30, 2008		December 31, 2007
Wages, salaries, bonuses and commissions	$	2,456	$	2,432
Dealer incentives, including volume bonuses, dealer trips, interest reimbursement, co-op advertising and other rebates		759		1,577
Warranty		6,511		8,123
Insurance-products and general liability, workers compensation, group health and other		6,103		8,519
Customer deposits and unearned revenues		3,766		4,208
Litigation		385		930
Interest		745		751
Sales and property taxes		1,734		1,837
Deferred gain on sale of real estate		814		1,145
Other current liabilities		3,627		3,713
Total	$	26,900	$	33,235

Changes in the Company's warranty liability during the three and six-month periods ended June 30, 2008 and 2007 were as follows (in thousands): 

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Balance of accrued warranty at beginning of period	$	7,277		$	10,132		$	8,123		$	11,099
Warranties issued during the period and changes in liability for pre-existing warranties		2,781			4,747			5,757			10,110
Settlements made during the period		(3,547	)		(5,113	)		(7,369	)		(11,443	)
Balance of accrued warranty at June 30	$	6,511		$	9,766		$	6,511		$	9,766

The decrease in the warranty accrual for 2008 was primarily the result of improvements in quality and lower sales levels.

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6.     COMPREHENSIVE INCOME (LOSS).

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net loss	$	(2,963	)	$	(10,123	)	$	(1,636	)	$	(20,571	)
Unrealized gains on cash flow hedges, net of taxes		26			13			4			9
Comprehensive loss	$	(2,937	)	$	(10,110	)	$	(1,632	)	$	(20,562	)

As of June 30, 2008 and 2007, the accumulated other comprehensive income (loss), net of tax, relating to deferred gains (losses) on cash flow hedges was ($44,000) and ($1,000), respectively.

7.     EARNINGS PER SHARE AND COMMON STOCK MATTERS.

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 and shares held in deferred compensation plans. Basic and diluted earnings per share for the three and six-month periods ended June 30 were calculated using the average shares as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Numerator:
Net loss available to common stockholders	$	(2,963	)	$	(10,123	)	$	(1,636	)	$	(20,571	)
Denominator:
Number of shares outstanding, end of period:
Weighted average number of common shares used in basic EPS		15,774			15,726			15,762			15,722
Effect of dilutive securities		-			-			-			-
Weighted average number of common shares used in dilutive EPS		15,774			15,726			15,762			15,722

As the Company reported a net loss for the three and six-month periods ended June 30, 2008 and 2007, 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.

8.   INCOME TAXES.

The Company accounts for income taxes based upon Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company continues to carry a full valuation allowance on all of its deferred tax assets.

As of the beginning of fiscal year 2008, the Company had an unrecognized tax benefit liability of $2.4 million including interest and penalties. There has been no significant change in the amount of the unrecognized tax benefit liability through June 30, 2008.

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8.     INCOME TAXES, continued.

The Company is subject to periodic audits by U.S. federal and state taxing authorities. Currently, the Company is undergoing an audit by the Internal Revenue Service for a claim for research and development credits. It is reasonably possible that the amounts recorded as an unrecognized tax benefit liability could change in the next twelve months as a result of the audit.

For the majority of tax jurisdictions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2004.

Due to the Company’s cumulative losses in recent years, a valuation allowance of $0.5 million was recognized to offset potential net operating loss tax benefits associated with losses for the three and six-month periods ended June 30, 2008, essentially reducing the effective tax rate to zero for the respective periods. In 2007, valuation allowances of $2.0 million and $6.5 million were recognized to offset potential net operating loss tax benefits associated with the losses for the three and six-month periods ended June 30, 2007.

9. COMMITMENTS AND CONTINGENCIES.

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 assigned to a unit in the production process. At that point, the Company is obligated to purchase the chassis and it is recorded as inventory. At June 30, 2008 and December 31, 2007, chassis inventory, accounted for as consigned inventory, approximated $13.6 million and $14.5 million, respectively.

Repurchase Agreements

The Company was contingently liable at June 30, 2008 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 and cost of sales at the time of repurchase. Although the estimated contingent liability approximates $159.3 million at June 30, 2008 ($176.0 million at December 31, 2007), 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, 2008 and December 31, 2007, $1.2 million and $0.7 million, respectively, were recorded as an accrual for estimated losses under repurchase agreements.

The Company was also contingently liable at June 30, 2008 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 and cost of sales at the time of repurchase. Although the estimated contingent liability approximates $7.9 million at June 30, 2008 ($14.6 million at December 31, 2007), 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 as of June 30, 2008 and $0.2 million at December 31, 2007 for estimated losses under the repurchase agreement.

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9.     COMMITMENTS AND CONTINGENCIES, continued.

Corporate Guarantees

The Company was contingently liable under guarantees to financial institutions of their loans to independent dealers for amounts totaling approximately $5.9 million at June 30, 2008 and $2.6 million at December 31, 2007. The Company has 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 Vehicle 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, at June 30, 2008 the Company was contingently liable to the financial institutions up to a maximum of $2.0 million of aggregate losses, as defined by the agreement, incurred by the financial institutions on designated dealers with higher credit risks that are accepted into the reserve pool financing program. The Company has recorded a loss reserve of $0.1 million at June 30, 2008 and December 31, 2007 associated with these guarantees.

Financing Obligation

During the second quarter of 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 for which the Company was to provide modular units. As of June 30, 2008, the Company provided $2.3 million in financing to the developer under this arrangement. The loans are collateralized by a first priority interest in all tangible and intangible property of the borrower. The developer was unable to obtain a building permit, so the Company is pursuing its legal remedies through litigation to recoup the financing extended to date. No additional funding has been or will be provided. During the fourth quarter of 2006, the Company obtained title to the real estate that was partial collateral for this note. In the event the sale of the property does not generate proceeds sufficient to cover the financing previously provided, the Company will continue pursuing its legal remedies to recover any shortfall. The Company has recorded the property at its estimated fair value less costs to sell.

Litigation

The Company has been named as a defendant in a number of lawsuits alleging that the plaintiffs were exposed to levels of formaldehyde in FEMA-supplied trailers manufactured by the Company's subsidiaries (and other manufacturers) and that such exposure entitles plaintiffs to an award, including injunctive relief, a court-supervised medical monitoring fund, removal of formaldehyde-existing materials, repair and testing, compensatory, punitive and other damages, including attorneys’ fees and costs.  Currently, the litigation is proceeding through the class certification process.  It is anticipated that soon all independent filings that have been served on the Company, will be consolidated into a single cause of action in which the issue of class certification will be determined. We do not believe that a liability is probable of occurrence and reasonably estimable with respect to these claims and we have not recorded a provision for these claims in our financial statements.

During the second quarter of 2008, as a result of the favorable settlement of two lawsuits involving insurance recoveries, the Company recorded income of approximately $1.0 million. During the first quarter of 2008, the Company also recorded income of approximately $1.0 million as a result of the favorable settlement of two lawsuits involving insurance recoveries. These favorable settlements are classified as a reduction to general and administrative expenses on the consolidated statement of operations.

The Company is involved in various other 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.

- 12 - -

10.  STOCK-BASED COMPENSATION.

Stock options generally vest over a four-year service period. The Company has not granted any stock option awards since 2003. Compensation expense related to the Company's Employee Stock Purchase Plan was not significant for either the three or six-month periods ended June 30, 2008.  Since the adoption of SFAS 123R, there have been no modifications to outstanding stock-based awards.

On January 4, 2008, the Company granted Restricted Stock Awards to certain key employees as a means of retaining and rewarding them for performance and to increase their ownership in the Company. The awards are governed by the Company’s 2000 Omnibus Stock Plan. Participants will earn the restricted shares awarded to them based on attainment of certain performance goals for the second quarter of 2008 and for the full calendar year 2008. If the Company meets the minimum or maximum target levels of pre-tax profits, the participants will earn corresponding levels of awards. To the extent the Company meets the performance goals for the first quarter and/or the full year, and the participant remains employed by the Company during the vesting period, the earned restricted shares will vest and be delivered to the participants over a three-year vesting period: one-third on January 1, 2009, one-third on January 1, 2010 and one-third on January 1, 2011. A total of 237,375 shares, assuming 100% of the performance goal is achieved, could be granted. At March 31, 2008, the Company determined that the minimum target of the performance goal for the first quarter of 2008 would be achieved; therefore, compensation expense in the amount of $0.1 million was recorded related to this plan for the quarter ended March 31, 2008. As of June 30, 2008, the Company determined that it is not yet probable that the performance conditions associated with the restricted stock grants for the full calendar year 2008 will be achieved; therefore, no additional compensation expense was recorded.

- 13 - -

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):

Three Months Ended
											Percentage Change
				Percentage					Percentage			2008
	June 30,			of		June 30,			of			to
	2008			Net Sales		2007			Net Sales			2007
Net sales:
Recreational vehicles	$	58,781		60.8	%	$	111,227		74.3	%		(47.2	)%
Housing		37,927		39.2			38,536		25.7			(1.6	)
Consolidated total		96,708		100.0			149,763		100.0			(35.4	)
Gross profit:
Recreational vehicles		(251	)	(0.3	)		(69	)	-			n/m
Housing		7,127		7.4			6,063		4.0			17.5
Consolidated total		6,876		7.1			5,994		4.0			14.7
Operating expenses:
Selling		4,821		5.0			5,939		4.0			(18.8	)
General and administrative		4,379		4.5			6,976		4.6			(37.2	)
Gain on sale of assets, net		(39	)	-			(22	)	-			(77.3	)
Goodwill impairment charge		-		-			3,872		2.6			(100.0	)
Consolidated total		9,161		9.5			16,765		11.2			(45.4	)
Nonoperating expense		678		0.7			346		0.2			96.0
Loss before income taxes		(2,963	)	(3.1	)		(11,117	)	(7.4	)		73.3
Income tax credit		-		-			(994	)	(0.7	)		100.0
Net loss	$	(2,963	)	(3.1	)%	$	(10,123	)	(6.7	)%		70.7	%
n/m - not meaningful

- 14 - -

Six Months Ended
											Percentage Change
				Percentage					Percentage			2008
	June 30,			of		June 30,			of			to
	2008			Net Sales		2007			Net Sales			2007
Net sales:
Recreational vehicles	$	149,260		68.5	%	$	215,379		76.9	%		(30.7	)%
Housing		68,766		31.5			64,627		23.1			6.4
Consolidated total		218,026		100.0			280,006		100.0			(22.1	)
Gross profit:
Recreational vehicles		4,942		2.2			(935	)	(0.3	)		n/m
Housing		12,798		5.9			8,356		2.9			53.2
Other		(1	)	-			(1	)	-			-
Consolidated total		17,739		8.1			7,420		2.6			139.1
Operating expenses:
Selling		9,418		4.3			11,752		4.2			(19.9	)
General and administrative		8,912		4.1			13,210		4.7			(32.5	)
Gain on sale of assets, net		(247	)	(0.1	)		(467	)	(0.2	)		47.1
Goodwill impairment charge		-		-			3,872		1.4			(100.0	)
Consolidated total		18,083		8.3			28,367		10.1			(36.3	)
Nonoperating expense		1,292		0.6			619		0.2			108.7
Loss before income taxes		(1,636	)	(0.8	)		(21,566	)	(7.7	)		92.4
Income tax credit		-		-			(995	)	(0.4	)		100.0
Net loss	$	(1,636	)	(0.8	)%	$	(20,571	)	(7.3	)%		92.0	%
n/m - not meaningful

The following table presents key items impacting the results of operations for the periods presented (in thousands):

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30,			June 30,			June 30,			June 30,
	2008			2007			2008			2007
Gain on sale of assets	$	(39	)	$	(22	)	$	(247	)	$	(467	)
Legal/Insurance expense recoveries	$	(987	)	$	-		$	(1,937	)	$	-
Goodwill impairment charge	$	-		$	3,872		$	-		$	3,872

- 15 - -

NET SALES

Consolidated net sales for the quarter ended June 30, 2008 were $96.7 million, a decrease of $53.1 million, or 35.4%, from the $149.8 million reported for the corresponding quarter last year. Net sales for the six months ended June 30, 2008 were $218.0 million, representing a decrease of $62.0 million, or 22.1%, reported for the same period of 2007. The Company’s Recreational Vehicle Segment experienced a net sales decrease of 47.2% for the quarter and a decrease of 30.7% for the six-month period, as significant deterioration in the RV market accelerated in the second quarter. Through May 31, 2008 total industry shipments of all types of recreational vehicles declined 13.9% with towables declining 11.3% and motorhomes declining 28.3%. For the quarter, RV Segment wholesale unit shipments of all product types decreased by 36.4% to 2,535 units and decreased 29.4% to 5,602 units for the six-month period. RV Segment wholesale shipments of motorhomes were down 43.0% and towables declined 24.2% during the first six months of 2008 compared to 2007. One bright spot in these challenging market conditions was fifth wheel trailers increasing unit shipments by 4.9% for the second quarter and 28.9% for the six-month period.

The Company’s Housing Segment experienced a net sales decrease for the quarter ended June 30, 2008 of 1.6%, from $38.5 million during the second quarter of 2007 to $37.9 million for the second quarter of 2008. Net sales for the six months ended June 30, 2008 were $68.8 million, representing an increase of $4.2 million, or 6.4%, from net sales of $64.6 million for the same period of 2007. The small decrease in sales during the second quarter and the increase in sales for the six-month period were primarily attributable to the impact of major project revenues offsetting the weakness in traditional single-family housing markets. The Company’s All American Building Systems (AABS) commercial business unit began deliveries for the military housing project at Fort Carson in Colorado early in 2008 and deliveries continued through the second quarter, significantly contributing to net sales volume.

The national housing market continues to decline as evidenced by U.S. Census Bureau data showing single-family housing starts declining 40.1% in the first five months of 2008, following a full year 2007 decline of 28.6%. The Housing Segment continues its efforts to grow its traditional business by enhancing the design and marketing of single-family homes, with exciting new products including the introduction of the products available in the All American Homes Green Catalog, recognizing the increasing need for energy efficiency and the use of sustainable materials in the construction of new homes. In addition, the Company has an agreement with Solar Village to market a line of solar energy powered homes. The Housing Segment continues to aggressively pursue major project opportunities in the multi-family residential, military housing and commercial markets.

COST OF SALES

Cost of sales decreased 37.5%, or $53.9 million, for the three months ended June 30, 2008, and 26.5% or $72.3 million for the six months ending June 30, 2008. As a percentage of net sales, cost of sales was 92.9% and 91.9% for the three and six-month periods ending June 30, 2008 compared to 96.0% and 97.4% for the comparable time periods of 2007. Cost of sales decreased more than net sales declined, increasing corresponding gross profit to $6.9 million or 7.1% for the three-month period ended June 30, 2008 compared to $6.0 million or 4.0% for the three months ended June 30, 2007. Improvement in gross profit is the result of action plans implemented by management during 2007, including the strategic sourcing project reducing material costs, continued product quality initiatives, reduction of warranty expenses, and consolidating manufacturing facilities in order to reduce expenses and improve profitability through improved capacity utilization of fewer facilities. In late 2007, the RV Segment consolidated Class A production into a single facility, relocated a paint facility in Elkhart, Indiana to the main complex in Middlebury, Indiana, and consolidated two towable assembly plants into a single facility, while the Housing Segment consolidated its All American Homes production facility located in Zanesville, Ohio with its larger facility located in Decatur, Indiana. These improvements in cost of sales were offset by the reduction in motorhome revenues during the second quarter, shifting the product mix and adversely affecting gross profit.

OPERATING EXPENSES

As a percentage of net sales, operating expenses, which include selling, general and administrative expenses, were 9.5% and 8.4% for the three and six-month periods ended June 30, 2008, respectively, and 8.6% and 8.9% for the corresponding periods in 2007. The $1.1 million reduction in selling expenses for the three-month period of 2008 versus 2007 and $2.3 million reduction for the six months was primarily due to reduced payroll related costs and lower sales promotion expenses as a result of planned cut backs and the overall lower revenues. General and administrative expenses were 4.5% of net sales for the 2008 second quarter compared to 4.6% for the 2007 corresponding quarter, and 4.1% for the first six months of 2008 compared to 4.7% in 2007. The decrease of $2.6 million in general and administrative expenses for the three-month period of 2008 versus 2007 was primarily the result of legal settlements and insurance recoveries of $1.0 million, and other various expense reductions including professional services and payroll related expenses. General and administrative expenses declined $4.3 million for the six-month period of 2008 versus 2007 as a result of legal settlements and insurance recoveries of $2.0 million, and other various expense reductions including professional services and payroll related expenses.

- 16 - -

GAIN ON THE SALE OF ASSETS, NET

For the three months ended June 30, 2008, the gain on the sale of assets was approximately $39,000, as compared to $22,000 in the same quarter of 2007. For the six-month period ended June 30, 2008, the gain on the sale of assets was $0.2 million compared to $0.5 million in the same period of 2007.

INTEREST EXPENSE

Interest expense was $1.1 million and $2.1 million for the three and six-month periods ended June 30, 2008 compared to $0.9 million and $1.8 million for the three and six-month periods ended June 30, 2007, respectively. Interest expense increased due to higher borrowings during the quarter and six-month period, offset partially by the lower applicable interest rates.

INVESTMENT INCOME

There was net investment income of $0.3 and $0.6 million for the three and six-month periods ended June 30, 2008 compared to $0.5 million and $1.0 million in the same periods of 2007. Investment income is principally attributable to earnings of the life insurance policies held. 

OTHER INCOME, NET

Other income, net, represents income of $0.1 million and $0.3 million for the three and six-month periods of 2008 and income of $0.1 and $0.2 million for the same periods of the previous year.

PRE-TAX INCOME (LOSS)

Pre-tax loss for the three and six-month periods ended June 30, 2008 was $3.0 million and $1.6 million compared with pre-tax loss of $11.1 million and $21.6 million in the corresponding periods of 2007. The Company's RV Segment generated a pre-tax loss of $6.9 million, or 11.7% of recreational vehicle net sales in the second quarter of 2008, compared with a pre-tax loss of $12.3 million, or 11.0% of the RV Segment's net sales in the second quarter of 2007. The pre-tax loss for the RV Segment in the second quarter of 2007 contained a non-cash goodwill impairment charge of $3.9 million, or 3.5% of segment net sales. The Housing Segment recorded a pre-tax income of $3.1 million in the second quarter of 2008 or 8.0% of segment net sales compared with pre-tax income of $1.1 million in the second quarter of 2007 or 2.8% of segment net sales (see Note 2 of Notes to Consolidated Financial Statements).

INCOME TAXES

Due to the Company’s cumulative losses in recent years, a valuation allowance of $0.5 million was recognized to offset potential net operating loss tax benefits associated with losses for the three and six-month periods ended June 30, 2008, essentially reducing the effective tax rate to zero for the respective periods. In 2007, valuation allowances of $2.0 million and $6.5 million were recognized to offset potential net operating loss tax benefits associated with the losses for the three and six-month periods ended June 30, 2007, also essentially reducing the effective tax rate to zero for the respective periods (see Note 8 of Notes to Consolidated Financial Statements).

NET INCOME (LOSS)

Net loss for the three and six months ended June 30, 2008 was $3.0 million (a loss of $0.18 per diluted share) and $1.6 million (a loss of $0.10 per diluted share) compared to a net loss for the three and six months ended June 30, 2007 of $10.1 million (a loss of $0.64 per diluted share) and $20.6 million (a loss of $1.31 per diluted share).

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

The Company generally relies on funds from operations as its primary source of working capital and liquidity. In addition, the Company maintains a $55.0 million secured line of credit to meet its seasonal working capital needs. At June 30, 2008 there was $32.4 million in outstanding borrowings. At June 30, 2007, there was $13.4 million in borrowings. At June 30, 2008 the Company had approximately $16.4 million available for additional borrowings under the terms of the secured line of credit. The Company also has the ability to borrow against the accumulated cash surrender value of life insurance policies. As of June 30, 2008 and December 31, 2007, $27.7 million and $17.6 million, respectively, had been borrowed against the cash surrender value of Company-owned life insurance contracts. As of June 30, 2008, the cash surrender value of life insurance is approximately $54.1 million, with $27.7 million borrowed, resulting in a cash surrender value net of loans of $26.4 million. As of June 30, 2008, the Company had capacity to borrow an additional maximum amount of $23.8 million against the net cash surrender value.

- 17 - -

At June 30, 2008, working capital increased to $38.2 million from $25.3 million at December 31, 2007. The $22.4 million increase in current assets at June 30, 2008 versus December 31, 2007 was primarily due to an increase in accounts receivable of $14.8 million and assets held for sale of $5.0 million. The $9.5 million increase in current liabilities at June 30, 2008 versus December 31, 2007 was primarily due to an increase in accounts payable of $4.3 million and an increase in short-term borrowings of $12.3 million, offset by decreases in accrued expenses and other liabilities of $6.3 million.

Given the deterioration of already weak RV and housing markets, management has and continues to proactively consolidate operations to align capacity, overhead costs and operating expenses with market demand which also more closely aligns cash outflows with inflows. Management believes that the Company’s existing cash and cash equivalents as of June 30, 2008, together with its available line of credit facility, and the cash surrender value of life insurance policies along with the 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, 2007. During the first six months of fiscal 2008, there was no material change in the accounting policies and assumptions previously disclosed.

New Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141 (revised 2007), Business Combinations, (SFAS No. 141R). SFAS No. 141R provides revised guidance on how acquirers recognize and measure the consideration transferred, identifiable assets acquired, liabilities assumed, noncontrolling interests, and goodwill acquired in a business combination. SFAS No. 141R also expands required disclosures surrounding the nature and financial effects of business combinations. SFAS No. 141R is effective, on a prospective basis, for fiscal years beginning after December 15, 2008. The Company believes that the adoption of SFAS 141 (revised 2007) could have an impact on the accounting for any future acquisition, if one were to occur.

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, (SFAS No. 160). SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

- 18 - -

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 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 ability of the management team to achieve desired results;

• interest rates, which affect the affordability of the Company's products;

• consumer confidence and the availability of consumer credit;

• the Company’s ability to utilize manufacturing resources efficiently;

• the Company’s ability to introduce new models that achieve consumer acceptance;

• the margins associated with the mix of products the Company sells in a particular period;

• the availability of floorplan financing for the Company's recreational vehicle dealers and corresponding availability of cash to the Company;

• oil supplies and the availability and price of gasoline and diesel fuel, which can impact the sale of recreational vehicles;

• the Company's dependence on chassis and other suppliers;

• potential liabilities under repurchase agreements and guarantees;

• consolidation of distribution channels in the recreational vehicle industry;

• 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;

• the price volatility of materials used in production and the ability to pass on rapidly increasing costs of product components and raw materials to end buyers;

• the availability and cost of real estate for residential housing;

• the increased size and scope of work of military housing projects, and other major projects, as compared to the Company's traditional single-family homes business, with increased reliance on third parties for performance which could impact the Company; 

• the ability to perform in new market segments or geographic areas where it has limited experience;

• the impact of performance on the valuation of intangible assets;

• the supply of existing homes within the Company’s markets;

• the impact of home values on housing demand;

• uncertainties and timing with respect to sales resulting from recovery efforts in the Gulf Coast;

• adverse weather conditions affecting home deliveries;

• changing government regulations, including those covering accounting standards;

• environmental matters or product warranties and recalls, which may affect costs of operations, revenues, product acceptance and profitability;

• the state of the recreational vehicle and housing industries in the United States;

• changes in property taxes and energy costs;

• changes in federal income tax laws and federal mortgage financing programs;

• competition in the industries in which the Company operates;

• further developments in the war on terrorism and related international crises;

• uncertainties of matters in litigation and other risks and uncertainties;

• the ability of the Company to generate taxable income in future years to utilize deferred tax assets and net operating loss carryforwards that are available;

• the availability of financing under the Company’s line of credit;

• the Company’s ability to increase gross margins which are critical whether or not there are increased sales;

• the Company’s use of incentives at either the wholesale or retail level;

• the impact of sub-prime lending on the availability of credit for the broader housing market;

• the dependence on key customers within certain product types;

• the potential fluctuation in the Company’s operating results;

• the addition or loss of our dealers or builders;

• the introduction and marketing of competitive product by others, including significant discounting offered by our competitors;

• uncertainties regarding the impact of the disclosed restructuring steps in both the Recreational Vehicle and Housing Segments.

- 19 - -

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 housing 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.

- 20 - -

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 2008, the Company has utilized its secured line of credit to meet short-term working capital needs. The Company had $32.4 million outstanding against the revolving credit facility on June 30, 2008. The Company had $13.4 million outstanding borrowings against the line of credit on June 30, 2007.

At June 30, 2008, the Company had one interest rate swap agreement with a notional amount of $2.4 million that was used to convert the variable interest rates on an industrial development revenue bond to a fixed rate. In accordance with the terms of the swap agreement, the Company pays a 3.71% interest rate, and receives the Bond Market Association Index (BMA), calculated on the notional amount, with net receipts or payments being recognized as adjustments to interest expense. This swap agreement is designated as a cash flow hedge for accounting purposes and effectively converts a portion of the Company's variable-rate borrowing 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 agreement represents the estimated receipts or payments that would be made to terminate the agreements. A cumulative gain of approximately $26,000, 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) for the quarter ended June 30, 2008. Total accumulated gain on the swap agreement for the six-month period ending June 30, 2008 was approximately $4,000. If in the future the interest rate swap agreement was determined to be ineffective or was terminated before the contractual termination date, 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 gain (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, 2008. 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, 2008.

There have been no changes during the quarter ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 

- 21 - -

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 1, 2008.

b)The following nominees were elected Directors for three-year terms expiring in 2011:

Geoffrey B. Bloom

William P. Johnson

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

	For	Withheld
Geoffrey B. Bloom	12,563,320	320,221
William P. Johnson	12,776,517	107,024

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

Robert J. Deputy, John A. Goebel, Donald W. Hudler, Richard M. Lavers, Edwin W. Miller

Item 6. Exhibits

See Index to Exhibits incorporated by reference herein.

- 22 -

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: July 24, 2008	By:	/s/ Richard M. Lavers
		Richard M. Lavers, Chief Executive Officer
Date: July 24, 2008	By:	/s/ Colleen A. Zuhl
		Colleen A. Zuhl, Chief Financial Officer
Date: July 24, 2008	By:	/s/ Stephen L. Patterson
		Stephen L. Patterson, Corporate Controller

- 23 -

INDEX TO EXHIBITS

Number Assigned In Regulation S-K, Item 601	Description 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 May 1, 2008.
(31.1)	Rule 13a-14(a) Certification of Chief Executive Officer.
(31.2)	Rule 13a-14(a) Certification of Chief Financial Officer.
(32.1)	Section 1350 Certification of Chief Executive Officer.
(32.2)	Section 1350 Certification of Chief Financial Officer.

- 24 -

EX-3.B

BY-LAWS OF

COACHMEN INDUSTRIES, INC.

(as modified through May 1, 2008)

ARTICLE I

OFFICES

Principal Offices.  The principal office of the Corporation shall be located in Elkhart County, Indiana, and the Corporation may have such other offices, either within or without the State of Indiana, as it may require from time-to-time.

ARTICLE II

SHAREHOLDERS

Section 2.1 - Place of Meetings.  All meetings of the shareholders for the election of Directors shall be held at the offices of the Corporation in the County of Elkhart, State of Indiana, or elsewhere as the Board of Directors may designate.  Meetings of shareholders for any purpose may be held at such place as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof.

Section 2.2 - Annual Meetings.  An annual meeting of the shareholders, commencing with the year 1983, shall be held at a time and place to be determined by the Chairman on the fifth (5th) Thursday after the end of the first quarter, but if a legal holiday, then on the next secular day following, or at such other time as the Board of Directors shall determine, at which they shall vote on any Directors standing for election and transact such other business as may properly be brought before such meeting.

Section 2.3 - Special Meetings.  Special meetings of the shareholders may be called by the Chairman, or by a majority of the Board of Directors.

Section 2.4 - Shareholders Suits. As a condition precedent to any shareholder in a representative capacity bringing any action or suit against the Corporation or its directors or officers, or any of them or any combination thereof (in their respective capacities), including but not limited to allegations of securities irregularities or fraud, the shareholder must enter into a written agreement with the Corporation providing that the prevailing party(ies) shall be reimbursed by the adverse party(ies) for its/his/their reasonable attorney’s fees, court costs and other expenses of litigation incurred in connection with the action or suit.

Section 2.5 – Notice of Meetings. Written or printed notice stating the place, day, and hour of the meeting of shareholders, and in case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten (10) days nor more than sixty (60) days before the meeting, either personally or by mail, by or at the direction of the Chairman, the President, or the Secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of the Corporation, with postage thereon prepaid.  No business may be transacted at a special meeting other than that described in the notice thereof.

Section 2.6 - Shareholders Entitled to Vote.  The Board of Directors may fix a date as the record date in order to determine the shareholders entitled to notice of a shareholders meeting, to demand a special meeting, to vote, or to take any other action, such date in any case to be not more than seventy (70) days before the meeting or action requiring a determination of shareholders.

Section 2.7 - Voting Lists.  The officer or agent who has charge of the transfer books for shares of the Corporation shall make, at least five (5) business days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period beginning five (5) business days prior to such meeting and continuing through the meeting, shall be kept on file at the principal office of the Corporation and shall be subject to inspection of any shareholder in accordance with applicable law during the whole time of the meeting.  The original share ledger or transfer book, or a duplicate thereof kept in this state shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer books or to vote at any meeting of shareholders.  Failure to comply with the requirements of this Section 2.7 shall not affect the validity of any action taken at a shareholders’ meeting.

Section 2.8 - Quorum.  A majority of the outstanding shares of the Corporation entitled to vote at any meeting, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, provided that if less than such quorum is present, the meeting may be adjourned, in accordance with Section 2.10 of this Article, until a quorum is present.

Section 2.9 - Manner of Acting.  Every decision (other than the election of Directors) with respect to which the votes cast in favor exceed the votes cast in opposition shall be approved as a corporate act unless a larger affirmative vote is required by applicable statute or regulation, the Articles of Incorporation of the Corporation, the Rules of the New York Stock Exchange, these by-laws, or the Board of Directors.  Directors are elected by a plurality of the votes cast by shares entitled to vote in the election at a meeting at which a quorum is present, unless otherwise provided in the Articles of Incorporation of the Corporation.

Section 2.10 - Adjournment.  If an annual or special shareholders’ meeting is adjourned to a different date, time, or place, notice thereof need not be given if the new time, date, or place is announced at the meeting before the adjournment.  A new record date need not be set if the adjournment is within one hundred twenty (120) days of the original meeting date.

Section 2.11 – Proxies.  At all meetings of shareholders, a shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney in fact.  Such proxy shall be filed with the meeting.  No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy.

Section 2.12 – Voting of Shares.  At every such meeting, each shareholder shall be entitled to cast one vote in person or proxy for each voting share of stock held in his name upon each matter submitted to vote.

Shares of its own stock belonging to this Corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by it in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares at any given time.

Section 2.13 – Voting of Shares by Certain Holders.  Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board of Directors of such corporation may appoint or as the by-laws of such corporation may prescribe.

Shares standing in the name of a deceased person, a minor ward, or an incompetent person may be voted by his administrator, executor, court appointed guardian or conservator, either in person or by proxy without a transfer of such shares into the name of such administrator, executor, court appointed guardian or conservator.  Shares standing in the name of a trustee may be voted by him, either in person or by proxy.

Shares standing in the name of a receiver or trustee in bankruptcy may be voted by such receiver or trustee in bankruptcy, and shares held by or under the control of a receiver or trustee in bankruptcy may be voted by such receiver or trustee in bankruptcy without the transfer thereof into his name if authority so to do be contained in an appropriate order of the court by which such receiver or trustee in bankruptcy was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote shares so transferred.

Section 2.14 – Voting by Ballot.  Voting on any question may be viva voce unless the presiding officer shall order that voting be by written ballot, and except that voting in elections shall be by written ballot, if a shareholder entitled to vote at that election so requests.

Section 2.15 – Notice of Director Nominations and Shareholder Proposals

(a)   Nominations for the election of Directors may be made by the Board of Directors or by any stockholder holding five percent (5%) or more of the outstanding shares entitled to vote for the election of Directors. Nominations by stockholders shall be made by notice in writing, either delivered to the Secretary of the Corporation, or mailed to the Secretary of the Corporation by first-class United States mail, postage prepaid, and in either case received by the Secretary of the Corporation not less than ninety (90) days prior to the month and day of the anniversary of the last meeting of the stockholders called for the election of Directors.  Notice of nominations which are proposed by the Board of Directors shall be given to the Secretary by the Chairman on behalf of the Board, by any reasonable means before the mailing of the proxy statement.

(b)   Each notice under subsection (a) must contain the name and number of shares beneficially held by the nominating stockholder, a clear and unequivocal statement of nomination, and certain information about each proposed nominee, including his/her name, age, business and residence addresses, principal occupation, the number of shares of Common Stock beneficially he/she owns, and such other information as is required under procedures adopted for nominations by the Governance Committee, and as is required to be included in a proxy statement soliciting proxies for the election of such proposed nominee.

(c)   Stockholders wishing to bring a proposal before a meeting of stockholders, whether or not it is to be included in a proxy statement, must submit it to the Secretary of the Corporation in writing, either delivered to the Secretary of the Corporation or mailed to the Secretary of the Corporation by first class United States mail, postage prepaid, and in either case received by the Secretary of the Corporation not less than sixty (60) days prior to the month and day of the anniversary of the mailing of the prior year’s proxy statement, together with identification and address of the proposing stockholder and such other information as would be required to determine the appropriateness of including the proposal in a proxy statement.  The Secretary, in conjunction with the Chairman and such professional advisors as they deem necessary, shall determine whether and in what form to include the stockholder proposal in proxy materials.

(d)   If the Chairman of the meeting of stockholders determines that a nomination or a proposal was not made in accordance with the foregoing procedures, such nomination is void and such proposal shall not be submitted for consideration at the meeting.

ARTICLE III

DIRECTORS

Section 3.1 – General Powers.  The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section 3.2 – Number, Tenure, and Qualifications. The number of Directors of the Corporation shall be not less than six (6) nor more than twelve (12), the exact number of Directors to be determined from time-to-time by resolution of the Board of Directors.  The term for each Director shall be three (3) years, staggered so that the terms of approximately one third (1/3rd) of the Directors expire each year, except a shorter term may be authorized by a unanimous resolution of the Board of Directors in special circumstances.Each Director shall hold office until his term shall expire and his successor shall have been elected and qualified. Directors need not be residents of Indiana or shareholders of the Corporation, except as the Directors may direct by resolution from time to time.  No person shall be eligible for election of the Board of Directors who will have attained the full age of seventy-five (75) years prior to the beginning of the term for which said person is to serve as a Director, except pursuant to a unanimous resolution of the Board of Directors authorizing continued service for a limited period of time in special circumstances.

Directors may be removed with or without cause by action of a majority of the Directors acting at a meeting when the removal of a Director is included in the notice of the meeting as a purpose of the meeting. A Director may also be removed by the shareholders in any manner provided by statute.

Section 3.3 – Committees.  The Board of Directors, by resolution adopted by a majority of Directors, may create one or more committees and appoint members of the Board to serve on the committee or committees.  Each committee shall have one or more members, who serve at the pleasure of the Board.

The Board of Directors shall have three (3) standing committees: the Governance Committee, the Management Development & Compensation Committee, and the Audit Committee. Membership on these standing committees shall be limited to Independent Directors, and the authority and duties of these standing committees shall be determined according to charters for each of them adopted by the Board of Directors, all in accordance with applicable statutes and regulations, the Rules of the New York Stock Exchange and the Corporation’s Governance Guidelines. To the extent specified by the Board of Directors or in the Articles of Incorporation or these by-laws, each other committee may exercise the authority of the Board of Directors under the Indiana Business Corporation Law, provided, however, no committee may: (1) authorize distributions, except a committee may authorize or approve a reacquisition of shares if done according to a formula or method prescribed by the Board of Directors; (2) approve or propose to shareholders action that requires shareholders’ approval under the Indiana Business Corporation Law; (3) fill vacancies on the Board of Directors or on any of its committees; (4) amend the Articles of Incorporation of this Corporation; (5) adopt, amend, or repeal these by-laws; or (6) approve a plan of merger not requiring shareholder approval.

Section 3.4 – Regular Meetings.  A regular meeting of the Board of Directors shall be held without other notice than this by-law, immediately after, and at the same general location as the annual meeting of shareholders.  If such meeting is not held as above provided, the election of officers may be held at any subsequent meeting of the Board of Directors specifically called in the manner hereinafter provided.  The Board of Directors may provide, by resolution, the time and place, either within or without the State of Indiana, for the holding of additional regular meetings without other notice than such resolution.

Section 3.5 – Special Meetings.  Special meetings of the Board of Directors may be called by or at the request of the Chairman or any three Directors, or as otherwise provided in these by-laws.  The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Indiana, as the place for holding any special meeting of the Board of Directors called by them.

Section 3.6 – Notice  Notice of any special meeting of Directors shall be given to be effective at least three (3) daysprior to the meeting.  Notice shall include the date, time and place of the meeting.  Neither the business to be transacted at, nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting, except as otherwise specifically provided in these By-laws, the Articles of Incorporation or by applicable statute or regulation. Written notice of any special meeting of Directors shall be given as follows: by mail (which includes U.S. mail and private carrier service); or, by electronic mail or facsimile to an address or number provided by the Director(s) for such purposes; or, by personal delivery, telegram, teletype or other form of wire or wireless communication; in all cases, to each Director at his/her business address, or, in the event delivery  is to be made on a Saturday, Sunday, or legal holiday, then to the resident address of each Director.  Written notice is effective at the earliest of the following:  when received; five (5) days after the date of regular mailing, as evidenced by the postmark if correctly addressed to the address listed in the most current records of the corporation; or, on the date shown on the return receipt of a mailing or private carrier receipt, if the receipt is signed by or on behalf of the addressee.  If sent by electronic mail or facsimile, such notice will be presumed and determined to be delivered when the electronic records indicate that a good transmission was made unless proven otherwise. For purposes of dealing with an emergency situation, as conclusively determined by the Director(s)  calling the meeting, notice may be given in person, orally or by  any means that reasonably may be expected to provide notice under the circumstances, not less than two (2) hours prior to the meeting.  If the Secretary fails or refuses to give such notice, then the notice may be given by the  Director(s) calling the meeting.  Any Director may waive notice of any meeting.  The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends and announces that  the express purpose of his/her attendance at the beginning of the meeting is to object to the holding of the meeting or the transaction of any business because the meeting is not lawfully called or convened, and provided that such Director does not thereafter participate in any way, vote for or assent or dissent to or on the record abstain from voting on any action taken at the meeting.

Section 3.7 – Quorum.  A majority of the number of Directors fixed under these by-laws shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that if less than a majority is present, the majority of such Directors present may adjourn the meeting from time-to-time until a majority of the Board of Directors is present, without further notice.

Section 3.8 – Manner of Acting.  The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. A Chairman shall be chosen from the Board of Directors. The Chairman shall preside at all meetings of the shareholders and of the Board of Directors, and in general shall perform all duties incident to the office of the Chairman of the Board and such other duties as from time-to-time may be assigned to him/her by the Board of Directors. If the Chairman is not independent, an independent Director shall be elected by the independent Directors as the Lead Director. The Lead Director shall have authority to call and shall preside at all meetings of the independent and non-management Directors, and shall serve as the spokesperson for the independent Directors to the Chief Executive Officer and to the Chairman.

Section 3.9 – Vacancies.  Any vacancy occurring in the Board of Directors, and any Directorship to be filled by reason of an increase in the number of Directors, may be filled by the remaining Directors, though less than a quorum, at a regular or special meeting thereof.

Section 3.10 – Compensation.  By resolution of the Board of Directors, irrespective of any personal interest of any of the members, the Directors may be  compensated for their services to the Corporation in any reasonable manner, including but not limited to payment of their expenses, if any, of attendance at each meeting of the Board, or any duly organized committee of the Board of which they are members, and/or payment of a fixed sum for attendance at such  meeting(s) , and/or payment of a stated periodic amount for serving on the Board and/or any committee thereof.  Alternatively or additionally, the Directors may be paid either by issuance of a fixed number of shares of the Corporation, or payment of the fixed sums may be made by issuance of shares of the Corporation of an equivalent value as the amount due, as determined by the Board.  Such payment shall not alone preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore, subject to applicable law and the policies of the Company.

Section 3.11 – Presumption of Assent.  A Director of the Corporation who is present at a meeting of the Board of Directors, at which action on any corporate matter is taken, shall be conclusively presumed to have assented to the action taken, unless his dissent shall be entered in the minutes of the meeting, or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof, or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting.  Such right to dissent shall not apply to a Director who voted in favor of such action taken.

Section 3.12 – Informal Action by Directors.  Any action required to be taken at a meeting of the Board of Directors, or any other action which may be taken at a meeting of the Board of Directors, or any duly organized committee thereof acting within the scope of its delegated authority, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Directors entitled to vote with respect to the subject matter thereof or by all the members of such committee, as the case may be, and such consent is included in the minutes or filed with the corporate records reflecting the action taken.

ARTICLE IV

OFFICERS

Section 4.1 – Number.  The officers of the Corporation shall include a Chief Executive Officer, a President, a Treasurer, and a Secretary, all of whom shall be elected by the Board of Directors.

The Board of Directors may appoint such other officers as they deem necessary which may include various levels of Vice Presidents, a Controller, a Chief Financial Officer, a General Counsel, and others who shall have such authority and shall perform such duties as from time to time may be prescribed by the Board of Directors. Any two or more offices may be held by the same person.

The officers of the Corporation shall have such powers and authority in the control and management of the property and business of the Corporation as is usual and proper in the case of, and incident to, such corporate offices, except insofar as such power and authority is limited by these by-laws or by resolution of the Board of Directors. Officers shall report as designated by the Board of Directors or by these by-laws, or if there is no such designation, then as designated by the Chief Executive Officer.

Section 4.2 – Election and Term of Office.  The officers of the Corporation shall be elected annually, by the Board of Directors, at the first meeting of the Board of Directors held after each annual meeting of shareholders.  If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be.  Vacancies may be filled, or new offices filled, at any meeting of the Board of Directors.  Each officer shall hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall resign or shall have been removed in the manner hereinafter provided.

Section 4.3 – Removal.  Any officer or agent of the Corporation may be removed at any time by the Chairman, the Chief Executive Officer, or by the Board of Directors whenever, in his/her/its judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed; and, any such removal by the Chairman or Chief Executive Officer shall be subject to ratification by the Board of Directors, provided that such ratification shall be effective retroactive in effect to the date of removal.

Section 4.4 – Vacancies.  A vacancy in any office because of death, resignation, retirement, removal, disqualification or otherwise, may be filled by the Board of Directors, or to the extent permitted by applicable law, by the Chief Executive Officer, subject to ratification at the next regular meeting of the Board of Directors, in either case for the unexpired portion of the term.

Section 4.5 – Bonds.  If the Board of Directors by resolution shall so require, any officer or agent of the Corporation shall give bond to the Corporation in such amount and with such surety as the Board of Directors may deem sufficient, conditioned upon the faithful performance of their respective duties and offices.

Section 4.6 – Chief Executive Officer - The Chief Executive Officer shall have executive authority to see that all orders and resolutions of the Board of Directors are carried into effect and, subject to the control vested in the Board of Directors by statute, by the Articles of Incorporation or by these by-laws, shall administer and be responsible for the overall management of the business and affairs of the Corporation.  He/she may sign with the Secretary, or any other proper officer of the Corporation thereunto authorized by the Board of Directors, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors, or by these by-laws, to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed and, in general, shall perform all duties as may be prescribed by the Board of Directors from time-to-time.

Section 4.7 – President.  The President shall be chosen by the Board of Directors, and shall be directly in charge of all of the Corporation’s operations.  He may sign with the Secretary, or any other proper officer of the Corporation thereunto authorized by the Board of Directors, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors, or by these by-laws, to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed and, in general, shall perform all duties as may be prescribed by the Board of Directors from time-to-time.

Section 4.8 – Vice Presidents and Other Officers.  Vice Presidents and other Officers shall have such authority within an appointed area as determined by the Board of Directors, and shall perform such other duties as from time to time may be assigned to them by the Chief Executive Officer, President, or the Board of Directors. The Chief Financial Officer shall be the Officer of the Corporation who is primarily responsible for and whose duties shall be the financial reporting and management of the finances of the Corporation. The General Counsel shall be an Officer of the Corporation, whose primary duties shall be to provide legal advice to the Corporation. The General Counsel may also serve in other officer capacities, and action taken by the General Counsel in such capacities shall not be considered legal advice by reason of his or her dual capacity. The act of settlement or failure to settle litigation brought against the Corporation or any of its subsidiaries is not the rendering of legal advice.

Section 4.9 – Treasurer.  If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine.  He shall: (a) have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of Article V of these by-laws; (b) in general, perform all duties incident to the office of Treasurer and such other duties as from time-to-time may be assigned to him by the Chief Executive Officer, the Chief Financial Officer, or the Board of Directors.

Section 4.10 – Secretary.  The Secretary shall: (a) keep the minutes of the shareholders and Board of Directors’ meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the Corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these by-laws; (d) keep a register of the post office address of each shareholder; (e) have general charge of the share transfer books of the Corporation; (f) in general, perform all duties incident to the office of Secretary and such other duties as from time-to-time may be assigned to him by the Chairman, the Chief Executive Officer, or by the Board of Directors. The Secretary may sign any document on behalf of the Corporation, subject to Articles V and VI.

Section 4.11 – Assistant Treasurers and Assistant Secretaries.  The Assistant Treasurers shall, respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine.  The Assistant Treasurers and Assistant Secretaries, in general, shall perform such duties as shall be assigned to them by the Treasurer or the Secretary, respectively, or by, the Chief Executive Officer, or the Board of Directors.

Section 4.12 – Compensation.  The compensation of the officers shall be fixed from time-to-time by the Board of Directors and no officer shall be prevented from receiving such compensation by reason of the fact that he is also a Director of the Corporation.

Section 4.13 – Succession.  The Board of Directors by resolution shall from time to time establish emergency succession procedures and authority in case of the unexplained absence of, or inability to reach, the Chairman, the Chief Executive Officer, and/or the President for a period of forty-eight (48) hours, or in the event of the inability of any of them to act, or the refusal by any of them to act in accordance with the law or the directives of the Board of Directors. In the absence of such a resolution in such an event:

(a) with respect to the President, the Chief Executive Officer or any other officer whom the Chief Executive Officer shall designate shall perform the duties of the President;

(b) with respect to the Chief Executive Officer, the President shall perform the duties of the Chief Executive Officer;

(c) in case of such an unexplained absence or inability to reach both the Chief Executive Officer and the President, or such an inability or refusal to act by both the Chief Executive Officer and the President, then the Chairman shall perform the duties of both the Chief Executive Officer and the President; and, if the Chairman is unable to so perform, then the most senior Executive Vice President shall temporarily perform the duties of the Chief Executive Officer and President until action by the Board of Directors.

(d) with respect to the Chairman, the Chief Executive Officer shall perform the duties of the Chairman if the offices are held by two individuals. In the event the offices of Chairman and Chief Executive Officer are unitary, then the President shall perform the duties of the Chief Executive Officer, and the Lead Director shall perform the duties of the Chairman.

The Chairman, or the Lead Director in his or her stead, shall call a Special Meeting of the Board of Directors within seven (7) days of such an event, for the express purpose of filling any vacancies and appointing new officers, as appropriate, unless the Chief Executive Officer, President or the Chairman, respectively, resumes his or her duties in the interim.

ARTICLE V

CONTRACTS, LOANS, CHECKS, AND DEPOSITS

Section 5.1 – Contracts.  The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of, and on behalf of, the Corporation, and such authority may be general or confined to specific instances. In the absence of any such applicable authorization, any two (2) of the Chief Executive Officer, the President, the Chief Financial Officer and the Secretary shall have the authority to sign any contract or deed in the name of, and on behalf of, the Corporation.

Section 5.2 – Loans.  No loans shall be contracted on behalf of the Corporation, and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors.  Such authority may be general or confined to specific instances.

Section 5.3 – Checks, Drafts, Etc.  All checks, drafts, or other order for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner as shall from time-to-time be determined by resolution of the Board of Directors.

Section 5.4 – Deposits.  All funds of the Corporation not otherwise employed shall be deposited from time-to-time to the credit of the Corporation in such banks, trust companies, or other depositaries as the Board of Directors may select.

ARTICLE VI

SHARES, CERTIFICATES FOR SHARES, AND TRANSFER OF SHARES

Section 6.1 – Regulation.  The Board of Directors may make such rules and regulations as it may deem expedient concerning the issuance, transfer, and registration of certificates for shares of the Corporation, including the appointment of transfer agents and registrars.

Section 6.2 – Shares.  Shares may be certificated or uncertificated as specifically provided in this Section.

(a) Except as specifically provided in this Section, all shares shall be represented by a certificate.  Certificates representing shares of the Corporation shall be respectively numbered serially, with due consideration for any uncertificated shares, for each class of shares, or series thereof, as they are issued, may be impressed with the Corporate seal, or a facsimile thereof, and shall be signed by the Chairman, Chief Executive Officer, or President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, provided that such signatures may be facsimile if the certificate is counter signed by a transfer agent, or registered by a registrar other than the Corporation itself or its employee.  Each certificate shall state the name of the Corporation, the fact that the Corporation is organized or incorporated under the laws of the State of Indiana, the name of the person to whom issued, the date of issue, the class (or series of any class), the number of shares thereby or a statement that such shares are without par value.  If the Articles of Incorporation of the Corporation authorize the issuance of more than one class of shares, a statement of the designations, preferences, qualifications, limitations, restrictions and special or relative rights of the shares of each class shall be set forth in full or summarized on the face or back of the certificates which the Corporation shall issue or in lieu thereof, the certificate may set forth that such a statement or summary will be furnished to any shareholder upon request without charge.  Each certificate shall be otherwise in such form as may be prescribed by the Board of Directors and as shall conform to the rules of any stock exchange on which the shares may be listed.

The Corporation shall not issue certificates representing fractional shares and shall not be obligated to make any transfers creating a fractional interest in a share of stock.  The Corporation may, but shall not be obligated to, issue script in lieu of any fractional shares, such scrip to have terms and conditions specified by the Board of Directors.

(b) Uncertificated, Book-entry Shares.  Uncertificated, book-entry shares shall be permitted only through the Direct Registration System (“DRS”) approved by the Securities Exchange Commission.  All registered shareholders owning uncertificated, book-entry shares through the DRS shall have the same rights as if they held certificated shares.

Section 6.3 – Cancellation of Certificates.  All certificates surrendered to the Corporation for transfer shall be cancelled and no new certificates shall be issued in lieu thereof until the former certificate for a like number of shares shall have been surrendered and cancelled, except as herein provided with respect to lost, stolen, or destroyed certificates.

Section 6.4 – Lost, Stolen, or Destroyed Certificates.  Any shareholder claiming that his certificate for shares is lost, stolen, or destroyed may make an affidavit or affirmation of that fact and lodge the same with the Secretary of the Corporation, accompanied by a signed application for a new certificate.  Thereupon, and upon the giving of a satisfactory bond of indemnity to the Corporation not exceeding in amount double the value of the shares represented by such certificate, such value to be determined by the Chairman and Treasurer of the Corporation, a new certificate may be issued of the same tenor and representing the same number, class, and series of shares as were represented by the certificate alleged to be lost, stolen, or destroyed.

Section 6.5 – Transfer of Shares.  Shares of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by his duly authorized attorney, upon the surrender and cancellation of a certificate or certificates for a like number of shares.  Upon presentation and surrender of a certificate for shares properly endorsed and payment of all taxes therefor, the transferee shall be entitled to a new certificate or certificates in lieu thereof.  As against the Corporation, a transfer of shares can be made only on the books of the Corporation and in the manner hereinabove provided, and the Corporation shall be entitled to treat the holder of record of any share as the owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the statutes of the State of Indiana.

ARTICLE VII

FISCAL YEAR

The fiscal year of the Corporation shall end of the last day of December in each calendar year.

ARTICLE VIII

DIVIDENDS

The Board of Directors may from time-to-time fix a record date, declaration date, and payment date with respect to any share dividend or distribution to shareholders in the manner and upon the terms and conditions provided by law and its Articles of Incorporation.

ARTICLE IX

SEAL

The Board of Directors shall provide a Corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal, Indiana.”

ARTICLE X

WAIVER OF NOTICE

Whenever any notice is required to be given under the provisions of these by-laws or under the provisions of the Articles of Incorporation or under the provisions of the Indiana Business Corporation Law, or otherwise, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.  Attendance at any meeting, in person, or by proxy shall constitute a waiver of notice of such meeting, unless the person or persons entitled to such notice at the beginning of the meeting objects to holding the meeting.

ARTICLE XI

INDEMNIFICATION

Section 11.1 – General.  The Corporation shall, to the fullest extent to which it is empowered to do so by the Indiana Business Corporation Law, or any other applicable laws, as from time-to-time in effect, indemnify any Indemnified Officer who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal administrative, or investigative, and whether formal or informal, by reason of the fact that he is or was a Director, officer, employee, or agent of the Corporation, or who, while serving as such Director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a Director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not, against judgments, settlements, penalties and fines (including excise taxes assessed with respect to employee benefit plans) and reasonable expenses (including counsel fees) incurred by him in accordance with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed, in the case of conduct in his official capacity, was in the best interests of the Corporation, and in all other cases, was not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, he either had reasonable cause to believe his conduct was lawful or no reasonable cause to believe his conduct was unlawful.  For these purposes, the giving of legal advice regarding matters pertaining to the Corporation by the General Counsel to the Corporation, a Director, or any member of management shall be deemed serving as an officer.

Any other person may be so indemnified if it is determined by the Board of Directors by a majority vote of a quorum none of whom were at the time parties to such action that such indemnification is in the interest of the Corporation, subject to the provisions of this Article.

The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not meet the prescribed standard of conduct.

Section 11.2 – Authorization of Indemnification.  To the extent that an Indemnified Officer of the Corporation has been successful, on the merits or otherwise in the defense of any action, suit or proceeding referred to in Section 11.1 of this Article, or in the defense of any claim, issue or matter therein, the Corporation shall indemnify such person against reasonable expenses (including counsel fees) incurred by such person in connection therewith.  Any other indemnification under Section 11.1 of this Article (unless ordered by a court) shall be made by the Corporation only as indemnification of the person to be indemnified is permissible in the circumstances because he has met the applicable standard of conduct, and as authorized as provided below.

Determination as to whether indemnification is permissible shall be made (a) by the Board of Directors by a majority vote of a quorum none of whom were  at the time parties to such action, suit or proceeding; or (2) if a quorum cannot be obtained under subdivision (1) by majority vote of a committee duly designated by the Board of Directors (in which designation Directors who are parties may participate), consisting solely of two or more Directors not at the time parties to such action, suit, or proceeding; or (3) by special legal counsel: (A) selected by the Board of Directors or its committee in the manner prescribed in subdivision (1) or (2), or (B) if a quorum of the Board of Directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full Board of Directors; or (4) by the shareholders, but shares owned by or voted under the control of Directors who are at the time parties to such action, suit or proceeding may not be voted on the determination.

Authorization of indemnification, the extent of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under sub-section (3) to select counsel.

Section 11.3 – Good Faith Defined. For purposes of any determination under this Article XI, a person shall be deemed to have acted in good faith and to have otherwise met the applicable standard of conduct set forth in Section 11.1 if his action is based on information, opinions, reports, or statements, including financial statements and other financial data if prepared or presented by (1) one or more other Directors, officers or employees of the Corporation or another enterprise whom he reasonably believes to be reliable and competent in the matters presented; (2) legal counsel, public accountants, appraisers or other persons as to matters he reasonably believes are within the person’s professional or expert competence; or (3) a committee of the Board of Directors of the Corporation or another enterprise of which the person is not a member if he reasonably believes the committee merits confidence.  The term “another enterprise” as used in this Section 11.3 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such a person is or was serving at the request of the Corporation as a Director, officer, partner, trustee, employee, or agent.  The provisions of this Section 11.3 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standards of conduct set forth in Section 11.1 of this Article XI.

Section 11.4 – Payment of Expenses in Advance.  Reasonable expenses incurred in connection with any civil or criminal action, suit or proceeding may be paid for or reimbursed by the Corporation in advance of the final disposition of such action, suit, or proceeding, as authorized in the specific case in the same manner described in Section 11.2 of this Article, upon receipt of a written affirmation of the person to be indemnified’s good faith belief that he has met the standard of conduct described in Section 11.1 of this Article and upon receipt of a written undertaking by or on behalf of the  said person to repay such amount if it shall ultimately be determined that he did not meet the standard of conduct set forth in this Article XI, and a determination is made that the facts then known to those making the determination would not preclude indemnification under this Article XI.

Section 11.5 – Provisions Not Exclusive.  The indemnification provided by this Article shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled under the Articles of Incorporation of this Corporation, any other by-law, any resolution of the Board of Directors or shareholders, any other authorization, whenever adopted, after notice, by a majority vote of all voting shares then outstanding, or any contract, both as to action in this official capacity and as to action in another capacity while holding such office.

Section 11.6 – Vested Right to Indemnification.  The right of any individual to indemnification under this Article shall vest at the time of occurrence or performance of any event, act or omission giving rise to any action, suit, or proceeding of the nature referred to in Section 11.1 of this Article and, once vested, shall not later be impaired as a result of any amendment, repeal, alteration or other modification of any or all of these by-laws, or by a change in his employment status or other capacity entitling him to indemnification, and shall inure to the benefit of the heirs, executors and administrators of such an individual.  Notwithstanding the foregoing, the indemnification afforded under this Article shall be applicable to all alleged prior acts or omissions of any individual seeking indemnification hereunder, regardless of the fact that such alleged acts or omissions may have occurred prior to the adoption of this Article, and to the extent such prior acts or omissions cannot be deemed to be covered by this Article XI, the right of any individual to indemnification shall be governed by the indemnification provisions in effect at the time of such prior acts or omissions.

Section 11.7 – Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee, or agent of the Corporation or who is or was serving at the request of the Corporation as a Director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against or incurred by the individual in that capacity or arising from the individual’s status as a Director, officer, employee, or agent, whether or not the Corporation would have power to indemnify the individual against the same liability.

Section 11.8 – Additional Definitions.  For purposes of this Article, references to “the Corporation” shall include any domestic or foreign predecessor entity of the Corporation in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.

For purposes of this Article, serving an employee benefit plan at the request of the Corporation shall include any service as a Director, officer, employee, or agent of the Corporation which imposes duties on, or involves services by such Director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries.  A person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of any employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” referred to in this Article.

For purposes of this Article, “party” includes any individual who is or was a plaintiff, defendant, or respondent in any action suit or proceeding, or who is threatened to be made a named defendant or respondent in any action, suit or proceeding.

For purposes of this Article, “official capacity,” when used with respect to a Director, shall mean the office of Director of the Corporation; and when used with respect to an individual other than a Director shall mean the office in the Corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the Corporation.  “Official capacity” does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not.

For the purpose of this Article, “Indemnified Officer” means any Officer or Director of the Corporation, any officer or Director of any wholly owned subsidiary of the Corporation, and any member of the Management Group (as hereafter defined) of an operating division of the Corporation or any of its subsidiaries.

For the purpose of this Article, “Management Group” means the division General Manager, and those employees who have division-wide responsibility and whose titles are or include President or Vice President..

Section 11.9 – Payments a Business Expense.  Any payments made to any indemnified party under these by-laws or under any other right to indemnification shall be deemed to be an ordinary and necessary business expense of the Corporation, and payment thereof shall not subject any person responsible for the payment, or the Board of Directors, to any action for corporate waste or to any similar action.

ARTICLE XII

AMENDMENTS

These by-laws may be altered, amended, or repealed and new by-laws may be adopted by a majority of the Directors present at any meeting of the Board of Directors of the Corporation at which a quorum is present.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Richard M. Lavers, 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: July 24, 2008
	By:	/s/ Richard M. Lavers
		Richard M. Lavers
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Colleen A. Zuhl, 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: July 24, 2008
	By:	/s/ Colleen A. Zuhl
		Colleen A. Zuhl
		Chief Financial Officer

EX-32.1

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, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Richard M. Lavers, 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.

Date: July 24, 2008

By:	/s/ Richard M. Lavers
	Richard M. Lavers
	Chief Executive Officer

EX-32.2

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, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Colleen A. Zuhl, 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.

Date: July 24, 2008

By:	/s/ Colleen A. Zuhl
	Colleen A. Zuhl
	Chief Financial Officer