FOUNTAIN POWERBOAT INDUSTRIES, INC.

                                FORM 10-Q/A

                             QUARTERLY REPORT

                 FOR THE QUARTER ENDED SEPTEMBER 30, 2003


                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC  20549




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

                                FORM 10-Q/A


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

             For the quarterly period ended September 30, 2003

                                    OR

[  ]   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  0-14712

                    FOUNTAIN POWERBOAT INDUSTRIES, INC.
          (Exact name of registrant as specified in its charter)

          Nevada                             56-1774895
     (State or other jurisdiction of         (I.R.S. employer
     incorporation or organization)       identification No.)


        Whichard's Beach Road, P.O. Drawer 457, Washington, NC  27889
                 (Address of principal executive offices)

          Registrant's telephone no. including area code: (252) 975-2000

 Indicate  by check mark whether the registrant (1) has filed all  reports
 required  to  be filed by Section 13 or 15(d) of the Securities  Exchange
 Act  of  1934 during the preceding 12 months (or for such shorter  period
 that  the registrant was required to file such reports), and (2) has been
 subject to such filing requirements for the past 90 days.

         Yes[ X ]                   No[     ]

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

         Yes[     ]                 No[ X ]

 Indicate  the  number  of  shares outstanding of  each  of  the  issuer's
 classes of common stock as of the latest practicable date.

         Class                  Outstanding at September 30, 2003
Common Stock, $.01 par value            4,757,608 shares



<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY


                                   INDEX

                                                                  Page No.

Part I Financial Information

       Item 1.  Financial Statements
            Unaudited Condensed Consolidated Balance Sheets,
             September 30, 2003 and June 30, 2003                  1 - 2

            Unaudited Condensed Consolidated Statements of
             Operations, for the three months ended September
             30, 2003 and 2002                                         3

            Unaudited Condensed Consolidated Statements of Cash
             Flows, for the three months ended September 30,
             2003 and 2002                                         4 - 5

            Notes to Unaudited Condensed Consolidated Financial
              Statements                                           6 - 13

       Item 2.  Management's Discussion and Analysis of Results
              of Operations and Financial Condition               14 - 15

       Item 3.  Quantitative and Qualitative Disclosures of
              Market Risk                                              16

       Item 4.  Controls and Procedures                                16

Part II Other Information

       Items 1, 2, 3, 4, 5 & 6                                         17

       Signature                                                       18

       Exhibits. Management Certifications                          19-21




<PAGE>


                               Explanatory Note

      Fountain Powerboat Industries, Inc. is filing this Amendment to its
Quarterly Report on Form 10-Q for the quarterly period ended September 30,
2003, to effect the following changes to its original filing:

      Earnings and earnings per share have been restated due to
adjustments to its previously reported allowance for deferred tax assets
as required by SFAS 109.  Previous amounts did not reflect fully the
effects of certain NOL carryforwards and their affects on the net of
deferred tax assets and liabilities.  See Note 7 to the financial
statements for further information related to this issue.  Additional
comments were also added to the Managements' Discussion and Analysis,
Results of Operations, to further explain the Company's reasons for
maintaining the deferred tax asset allowance.

      Changes were made to the balance sheet classification for the Senior
Debt Placement that was finalized during the quarter ended September 30,
2003.  The Senior Debt is classified as current debt only for the quarter
ended September 30, 2003.  A more comprehensive  explanation of the
reasons for the reclassification is contained in the Management's
Discussion and Analysis, Liquidity and Capital Resources.

      The original Management's Discussion and Analysis, Liquidity and
Capital Resources, was further expanded to include additional discussion
about sufficient current and future cash flows to satisfy liquidity
demands of the Company.

      With the exception of the foregoing corrections, no other
information in the Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2003 has been supplemented, updated or amended.





































<PAGE>

PART I.   Financial Information.


ITEM 1:   Financial Statements.


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                  ASSETS





                                        September 30,     June 30,
                                            2003            2003
                                       ______________  ______________
                                         (Restated)      (Restated)
CURRENT ASSETS:
  Cash and cash equivalents            $    3,111,177  $    1,224,935
  Accounts receivable, net                  3,288,612       2,015,371
  Inventories                               3,328,162       3,460,286
  Prepaid expenses                            806,220         644,581
  Current tax assets                          291,404         303,823
                                       ______________  ______________
     Total Current Assets                  10,825,575       7,648,996
                                       ______________  ______________
PROPERTY, PLANT AND EQUIPMENT              41,914,183      41,676,783

  Less:  Accumulated depreciation         (26,032,140)    (25,511,099)
                                       ______________  ______________
                                           15,882,043      16,165,684
                                       ______________  ______________

CASH SURRENDER VALUE LIFE INSURANCE         1,432,414       1,378,626

OTHER ASSETS                                  536,406         736,288
                                       ______________  ______________
     Total Assets                      $   28,676,438  $   25,929,594
                                       ______________  ______________













                                [Continued]

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                [Continued]


                                        September 30,     June 30,
                                            2003            2003
                                       ______________  ______________
                                         (Restated)      (Restated)
CURRENT LIABILITIES:
  Current maturities - long-term debt  $   18,226,930  $    1,060,444
  Current maturities - capital lease           17,709          20,118
  Accounts payable                          1,909,442       7,498,762
  Accounts payable - related party             25,081         169,043
  Accrued expenses                          1,356,817       1,317,398
  Dealer incentives                            76,485         190,010
  Customer deposits                           108,947         290,658
  Allowance for boat repurchases              200,000         200,000
  Warranty reserve                            900,000         900,000
                                       ______________  ______________

  Total Current Liabilities                22,821,411      11,646,433

LONG-TERM DEBT, less current maturities     1,042,111       8,986,160
CAPITAL LEASE, less current maturities         24,787          24,367
DEFERRED TAX LIABILITY                        291,404         303,823

COMMITMENTS AND CONTINGENCIES [NOTE 5]              -               -
                                       ______________  ______________
     Total Liabilities                     24,179,713      20,960,783
                                       ______________  ______________


STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value,
    200,000,000 shares authorized,
    4,757,608 shares issued and
    outstanding                                47,576          47,576
  Additional paid-in capital               10,475,448      10,436,551
  Accumulated earnings                     (5,757,030)     (5,400,683)
                                       ______________  ______________
                                            4,765,994       5,083,444
  Less: Treasury stock, at cost,
    15,000 shares                            (110,748)       (110,748)
  Accumulated other comprehensive
     income from Interest rate swap          (158,521)         (3,885)
                                       ______________  ______________
     Total Stockholders' Equity             4,496,725       4,968,811
                                       ______________  ______________
     Total Liabilities and
       Stockholders' Equity            $   28,676,438  $   25,929,594
                                       ______________  ______________




 The accompanying notes are an integral part of these unaudited condensed
                      consolidated financial statements.

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                         For the Three Months Ended
                                                September 30,
                                       ______________________________
                                            2003            2002
                                       ______________  ______________
                                         (Restated)
NET SALES                              $   12,885,232  $   12,002,119

COST OF SALES                              10,853,051      10,096,168
                                       ______________  ______________
  Gross Profit                              2,032,181       1,905,951
                                       ______________  ______________
EXPENSES:
  Selling expense                           1,355,570         832,978
      General and administrative              565,859         467,013
                                       ______________  ______________
     Total expenses                         1,921,429       1,299,991
                                       ______________  ______________
OPERATING INCOME (LOSS)                       110,752         605,960
                                       ______________  ______________
NON-OPERATING INCOME (EXPENSE):
  Other income (expense)                        3,059          28,576
  Interest expense                           (470,158)       (306,201)
                                       ______________  ______________
     Total non-operating income
       (expense)                             (467,099)       (277,625)
                                       ______________  ______________
INCOME (LOSS) BEFORE INCOME TAXES            (356,347)        328,335

CURRENT TAX EXPENSE                                 -               -
DEFERRED TAX EXPENSE (BENEFIT)                      -         159,091
                                       ______________  ______________

NET INCOME (LOSS)                      $     (356,347) $      169,244
                                       ______________  ______________

BASIC EARNINGS (LOSS) PER SHARE        $         (.08) $          .04
                                       ______________  ______________
WEIGHTED AVERAGE SHARES
  OUTSTANDING                               4,757,608       4,732,608
                                       ______________  ______________

DILUTED EARNINGS  PER SHARE            $         (.07) $          .04
                                       ______________  ______________
WEIGHTED AVERAGE SHARES
  OUTSTANDING ASSUMING DILUTION             4,824,089       4,782,372
                                       ______________  ______________




 The Accompanying notes are an integral part of these unaudited condensed
                     consolidated financial statements


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                         For the Three Months Ended
                                                September 30,
                                       ______________________________
                                            2003            2002
                                       ______________  ______________
                                         (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                    $     (356,347) $      169,244

  Adjustments to reconcile net income
    (loss) to net cash provided by
    operating activities:
     Depreciation expense                     521,041         528,770
     Net deferred taxes                             -         159,091
     Gain on sale of fixed asset                    -          29,114
     Amortization of deferred loan cost       226,997          15,450
     Non-cash expense                          42,783           4,416
     Change in assets and liabilities:
       (Increase) decrease in accounts
         receivable                        (1,273,241)      1,514,043
       (Increase) decrease in
         inventories                          132,124        (525,410)
       (Increase) decrease in prepaid
         expenses                            (161,639)         14,483
       Increase (decrease) in accounts
         payable                           (5,733,283)       (503,483)
       Increase (decrease) in accrued
         expenses                              39,419         (95,683)
       Increase (decrease) in dealer
         incentives                          (113,525)       (126,336)
       Increase (decrease) in customer
         deposits                            (181,711)       (358,645)
                                       ______________  ______________
        Net Cash Provided (Used) by
          Operating Activities             (6,857,382)        825,054
                                       ______________  ______________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant, and
    equipment                                 (34,700)       (310,405)
  Investment in molds and related plugs      (202,700)        110,000
  (Increase) decrease in other assets         199,882          (3,000)
                                       ______________  ______________
        Net Cash Provided (Used) by
          Investing Activities                (37,518)       (203,405)
                                       ______________  ______________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt             17,909,320               -
  Payments of long-term debt               (8,980,049)       (237,598)
  Payment of deferred loan cost              (148,129)              -
  Proceeds from stock options exercised             -          16,800
                                       ______________  ______________
        Net Cash Provided (Used) by
          Financing Activities              8,781,142        (220,798)
                                       ______________  ______________
Net increase (decrease)
 in cash and cash equivalents               1,886,242         400,851

Cash and cash equivalents
 at beginning of year                       1,224,935         329,640
                                       ______________  ______________

Cash and cash equivalents at end of
  period                               $    3,111,177  $      740,491
                                       ______________  ______________


                                [Continued]

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                [Continued]

                                         For the Three Months Ended
                                                September 30,
                                       ______________________________
                                            2003            2002
                                       ______________  ______________
Supplemental Disclosures of Cash Flow
 Information:
  Cash paid during the period for:

      Interest, net of amounts
        capitalized                    $      248,092  $      275,042
      Income Taxes                     $            -  $            -


Supplemental Disclosures of Noncash Investing and Financing Activities:
  For the three month period ended September 30, 2003:
     The  Company  recorded consulting expense of $1,795 as  a  result  of
     amortization of deferred compensation from 20,000 options  issued  to
     purchase  common  stock during Fiscal 2002, vesting  through  January
     2004 and expiring through January 2009.

     The  Company  issued  273,146 options to  purchase  common  stock  to
     Brunswick  Corporation  as a condition for guarantying  the  Bank  of
     America  loan.  The options are exercisable at $.05 per  share,  vest
     through July 2008 and expire July 2009.  As of September 30, 2003 the
     Company has recorded $40,988 interest expense.

  For the three month period ended September 30, 2002:
     The  Company  recorded consulting expense of $4,416 as  a  result  of
     amortization of deferred compensation from 40,000 options  issued  to
     purchase  common  stock during Fiscal 2002, vesting  through  January
     2004 and expiring through January 2009.




















 The accompanying notes are an integral part of these unaudited condensed
                  consolidated  financial statements.


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

  The  accompanying financial statements have been prepared by the Company
  without  audit.   In  the opinion of management, all adjustments  (which
  include  only normal recurring adjustments) necessary to present  fairly
  the  financial  position,  results  of  operations  and  cash  flows  at
  September 30, 2003 and for all periods presented have been made.

  Certain  information  and  footnote  disclosures  normally  included  in
  financial  statements  prepared in accordance  with  generally  accepted
  accounting  principles  in  the  United  States  of  America  have  been
  condensed   or   omitted  for  purposes  of  filing  interim   financial
  statements  with  the  Securities  and  Exchange  Commission.    It   is
  suggested  that  these  condensed  financial  statements  be   read   in
  conjunction with the financial statements and notes thereto included  in
  the  Company's June 30, 2003 audited financial statements.  The  results
  of  operations for the period ended September 30, 2003 and 2002 are  not
  necessarily indicative of the operating results for the full year.

  Principles  of  Consolidation:  The  consolidated  financial  statements
  include  the  accounts of the Company and its wholly  owned  subsidiary,
  Fountain  Powerboats, Inc.  All significant inter-company  accounts  and
  transactions have been eliminated in consolidation.

  Accounting  Estimates:  The  preparation  of  financial  statements   in
  conformity  with generally accepted accounting principles in the  United
  States  of America requires management to make estimates and assumptions
  that  affect  the  reported  amounts  of  assets  and  liabilities,  the
  disclosures  of  contingent assets and liabilities at the  date  of  the
  financial statements, and the reported amounts of revenues and  expenses
  during  the  reporting  period.  Actual operating results  could  differ
  from those estimated by management.

  Cash  and Cash Equivalents: For purposes of the statement of cash flows,
  the  Company  considers  all  highly  liquid  debt  instruments  with  a
  maturity  of three months or less to be cash equivalents.  At  September
  30,  2003  and June 30, 2003, the Company had $3,011,177 and $1,124,935,
  respectively, in excess of federally insured amounts held in cash.

  Fair  Value of Financial Instruments:  Management estimates the carrying
  value  of financial instruments on the consolidated financial statements
  approximates their fair values.

  Derivative Financial Instruments: The Company uses derivative  financial
  instruments  for  the  purpose  of  reducing  its  exposure  to  adverse
  fluctuations  in  interest rates.  While these hedging  instruments  are
  subject  to  fluctuations  in  value, such  fluctuations  are  generally
  offset  by  the  value of the underlying exposures  being  hedged.   The
  Company  accounts  for  these  derivative financial  instruments  as  an
  effective  cash  flow  hedge  under  the  provisions  of  Statement   of
  Financial   Accounting  Standards  (SFAS)  No.  133,   "Accounting   for
  Derivative Instruments and Hedging Activities" and it has the effect  of
  converting  the interest rate paid on the notional amount of  $9,000,000
  of the Company's variable debt to a fixed rate of


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION [Continued]

  6.02%.  The  difference between the Company's actual  variable  interest
  rate  and  6.02%  on the notional amount for the next twelve  months  is
  reclassified from other comprehensive income and recognized as  interest
  expense.  The Company is not a party to leveraged derivatives  and  does
  not hold or issue financial instruments for speculative purposes.

  Financial   Instruments:   The   Company   uses   derivative   financial
  instruments  for  the  purpose  of  reducing  it  exposure  to   adverse
  fluctuations  in  interest rates.  While these hedging  instruments  are
  subject  to  fluctuations  in  value, such  fluctuations  are  generally
  offset  by  the  value of the underlying exposures  being  hedged.   The
  Company  is  not a party to leveraged derivatives and does not  hold  or
  issue financial instruments for speculative purposes.

  Revenue   Recognition:  The  Company  generally  sells  boats  only   to
  authorized dealers and to the U.S. Government.  A sale is recorded  when
  a  boat is shipped to a dealer or to the Government, legal title and all
  other  incidents of ownership have passed from the Company to the dealer
  or  Government,  and  an  accounts receivable  is  recorded  or  payment
  received  from  the dealer, the Government, or the dealer's  third-party
  commercial lender.  This method of sales recognition is in use  by  most
  boat manufacturers.

  The  Company has developed criteria for determining whether  a  shipment
  should  be  recorded as a sale or as a deferred sale  (a  balance  sheet
  liability).   The criteria for recording a sale are that  the  boat  has
  been  completed and shipped to a dealer or to the Government, that title
  and  incidents  of  ownership have passed  to,  the  dealer  or  to  the
  Government,  and that there is no direct or indirect commitment  to  the
  dealer  or  to  the  Government  to  repurchase  the  boat  save   those
  manufacturers repurchase agreements with lending institutions which  are
  more fully discussed in Note 6 to these financial statements.

  The  sales  incentive interest payment program for  each  boat  sale  is
  accrued  for  the  entire interest period in the same fiscal  accounting
  period  that the related sale is recorded (see Note 6 to these financial
  statements).   The  amount of interest accrued is subsequently  adjusted
  to  reflect the actual number of days of remaining liability  for  floor
  plan  interest  for  each  individual boat  remaining  in  the  dealer's
  inventory and on floor plan.

  Stock  Options: The Company has stock incentive plans that provides  for
  stock-based  employee  compensation, including  the  granting  of  stock
  options,  to certain key employees and other individuals. The plans  are
  more  fully described in Note 6. The Company accounts for stock  options
  issued  to  employee,  officer and directors under the  stock  incentive
  plan  in  accordance with the recognition and measurement principles  of
  APB  Opinion  No.  25, "Accounting for Stock Issued to  Employees",  and
  related  Interpretations.  Under this method,  compensation  expense  is
  recorded  on the date of grant only if the current market price  of  the
  underlying stock exceeded the exercise price. Under the Company's  stock
  incentive plan, stock options are granted at exercise prices that  equal
  or  exceed the market value of the underlying common stock on  the  date
  of  grant.  Therefore, no compensation expense related to stock  options
  is recorded in the Consolidated Statements of Income.


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION [Continued]

  During  the  periods presented in the accompanying financial  statements
  the  Company  has granted options under the 1995 and 1999 Stock  Options
  Plans  and  executive and other employment agreements.  The  Corporation
  has  adopted  the disclosure-only provisions of Statement  of  Financial
  Accounting    Standards   No.   123,   "Accounting    for    Stock-Based
  Compensation."  Accordingly, compensation cost under SFAS  No.  123  has
  been  recognized for certain stock options issued under other agreements
  to   non-employee  and  recorded  in  the  accompanying   statement   of
  operations,  but  no  compensation cost under  SFAS  No.  123  has  been
  recognized  for  stock  options  issued  under  the  plans   and   other
  agreements with employees.

  Had  compensation cost for stock options issued to employees  under  the
  Company's  stock  option plans and agreements been determined  based  on
  the  fair value at the grant date for awards in three months ended  2003
  and  2002  consistent with the provisions of SFAS No. 123, the Company's
  net  earnings  net  of  taxes and earnings per  share  would  have  been
  reduced to the pro forma amounts indicated below:

                                                 For the Quarter
                                               Ended September 30,
                                            __________________________
                                                2003          2002
                                            ____________  ____________

(Restated)
Net Income (Loss)   As reported             $   (356,347) $    169,244
 Add: Stock-based employee compensation
   expense included in reported net income         1,795         4,416
 Deduct: Total stock-based employee
   compensation expense determined under
   fair value based method                        (5,193)      (11,292)
 Net Income (Loss)  Proforma                $   (348,407) $    162,368

 Basic earnings (loss) per share
   As reported                              $       (.08) $        .04
                    Proforma                $       (.07) $        .04
 Diluted earnings(loss) per share
   As reported                              $       (.07) $        .04
                    Proforma                $       (.07) $        .04


NOTE 2 - ACCOUNTS RECEIVABLE

  As  of  September 30, 2003, accounts receivable were $3,288,612  net  of
  the  allowance for bad debts of $27,841.  This is an increase  from  the
  $2,015,371  in net accounts receivable recorded at June  30,  2003.   Of
  the  balance  at  September 30, 2003, $2,201,501 subsequently  has  been
  collected  as  of  October  20, 2003, and the  remaining  $1,087,111  is
  believed to be fully collectible.

  The   Company  has  pledged  its  receivables  as  collateral  for   its
  promissory note with Bank of America.



<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - INVENTORIES

  Inventories  at  September 30, 2003 and June 30, 2003 consisted  of  the
  following:


                                    September,     June 30,
                                       2003          2003
                                   ____________  ____________
         Parts and supplies        $  1,496,212  $  1,593,057
         Work-in-process              1,655,406     1,702,532
         Finished goods                 226,544       214,696
                                   ____________  ____________
                                      3,378,162     3,510,286

         Obsolete inventory reserve     (50,000)      (50,000)
                                   ____________  ____________
           Total                   $  3,328,162  $  3,460,286
                                   ____________  ____________

  The   Company  has  pledged  its  inventories  as  collateral  for   its
  promissory note with Bank of America.


NOTE 4  LONG-TERM DEBT AND PLEDGED ASSETS

  The following is a summary of long-term debt:
                                             September 30,   June 30,
                                                 2003          2003
                                             ____________  ____________
     9.99% loans payable to a financial
       institution for the purchase of
       vehicles, monthly payments totaling
       $1,383 through August 2005, secured
       by the vehicles purchased.            $     26,012  $     32,224
     6.5% loan payable to a financial
       institution for the purchase of a
       vehicle, monthly payments of $726
       through December 2006, secured by
       the vehicle purchased.                      24,097        25,306
     7.93% to 8% loans payable borrowed
       against the cash surrender value of
       key-man life insurance policies
       1998, 2001, and 2002, monthly
       payments of $25,004.                     1,333,279     1,265,438
     $10,000,000 credit agreement with a
       financial Corporation (See Below).               -     8,723,636
     $18,000,000 credit agreement with a
       financial Corporation (See Below).      17,885,653             -
                                             ____________  ____________
                                               19,269,041    10,046,604
     Less: Current maturities included in
       current liabilities:                   (18,226,930)   (1,064,444)
                                             ____________  ____________
                                             $  1,042,111  $  8,986,160
                                             ____________  ____________


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4  LONG-TERM DEBT AND PLEDGED ASSETS [Continued]

  On  July  17,  2003, the Company obtained an $18,000,000 long-term  loan
  from  Bank  of  America.  The proceeds were used to  refinance  the  two
  loans  with  General  Electric Capital Corporation totaling  $10,000,000
  with  total remaining balance of $8,723,636 and a variable interest rate
  of  prime plus 2% or 6.25% as of June 30, 2003.  Proceeds from the  Bank
  of  America loan were also used to pay trade payables to current  status
  and provide additional operating funds.  The new agreement with Bank  of
  America  has  a  $9,000,000 note with a rate that is variable  with  the
  Wall  Street  Libor  one  month floating rate  as  the  index  plus  the
  applicable  margin. The applicable margin is based  on  funded  debt  to
  earnings before income taxes and depreciation adjustment "EBITDA".   The
  applicable margin is as follows:

    Funded Debt to EBITDA ratio           Applicable Margin

    Less than or equal to 1.74 to 1.00                1.90%

    1.75 to 1.00, but less than 2.50 to 1.00          2.10%

    2.50 to 1.00, but less than 3.76 to 1.00          2.25%

    Greater than or equal to 3.76 to 1.00             2.50%

  The applicable margin for the first year is deemed to be 2.25%.

  The  new  agreement with Bank of America further has a  $9,000,000  note
  under  an  interest  rate swap to provide a fixed rate  of  6.02%.   The
  interest  rate  swap is designated as a cash flow hedge  and  is  deemed
  effective  pursuant  to SFAS 133.  As a result of  this  swap  agreement
  interest  expense  was increased by $43,032 for the three  months  ended
  September  30,  2003. These Bank of America loans have  a  fifteen  year
  amortization  with  a  five  year balloon payment  and  are  secured  by
  certain  assets  of  the  Company  and  real  estate  of  the  Company's
  President,  Chief  Executive Officer and majority shareholder,  Reginald
  M.  Fountain,  Jr.   Obligations  are  guaranteed  by  the  Company,  an
  unlimited  unconditional  guarantee of Mr.  Fountain  and  by  Brunswick
  Corporation,  pursuant to a master funding agreement with  the  Company.
  Combined  monthly  payments  to Bank of America  will  be  approximately
  $126,000. The Company has agreed to observe certain covenants under  the
  terms  of its note agreements, the most restrictive of which relates  to
  prepayment  of excess earnings,  the sale of assets securing  the  notes
  and key financial ratios.

  Prepayment  -  The Company is obligated to pay in addition  to  required
  monthly  principle  payments an additional 50% of  the  excess  earnings
  after  debt  service within 120 days after the close  of  the  Company's
  fiscal year end.
  Should  the  Company prepay the balance of the note within one  year  of
  the  date  of  the note, the Company must pay one percent  (1%)  of  the
  unpaid  balance on the date before the date of the prepayment  is  made.
  If  the  Company prepays the balance of the note after one year  of  the
  date of the note, the Company must pay a half of a percent (.5%) of  the
  unpaid balance on the date before the date the prepayment is made.


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4  LONG-TERM DEBT AND PLEDGED ASSETS [Continued]

  Should  the  Company  default on the provision  of  timely  payments,  a
  delinquency  charge of four percent (4%) of the unpaid  portion  of  the
  payment that is more than fifteen days late will be applied. Should  the
  Company  remain  in a default status, the interest rate charged  to  the
  Company  shall be an additional two percent (2%) above the rates  listed
  above.

  Loan  Guarantee  - The Company entered into an agreement with  Brunswick
  Corporation,  a division of which supplies marine engines  used  in  the
  Company's  product,  wherein Brunswick Corporation agreed  to  guarantee
  the  $18,000,000  in  debt financing, in return  the  Company  President
  granted  Brunswick  the  option to purchase his common  shares  and  his
  options  to  purchase  common  shares of  the  Company.   The  Company's
  President  further  agreed to indemnify Brunswick  for  all  amounts  in
  excess  of  $14,700,000.  The Company issued 273,146 options to  acquire
  common  shares at $.05 per share, and agreed to issue additional options
  to  acquire  sufficient shares which would result  in  Brunswick  owning
  together  with the shares purchased from the Company President 50.1%  of
  the  Company's outstanding shares at the weighted average market closing
  price  for  the previous 30 days.  The Company further entered  into  an
  exclusive  supply agreement and agreed to restrictions  on  the  Company
  issuing  any  equity securities that would dilute Brunswick's  potential
  equity  interest in the Company upon exercise of their options with  the
  Company  and  Company's  President without Brunswick's  prior  approval.
  Brunswick  Corporation's options to purchase vest upon  the  earlier  of
  the  repayment or default of $18,000,000 notes payable, or July 1, 2007.
  Brunswick  Corporation's  option expires no earlier  than  approximately
  180 days after vesting.

NOTE 5 - COMMON STOCK

  During  January  2002,  the Company issued 10,000  options  to  purchase
  common  stock  to  a  consultant for services to be rendered  valued  at
  $14,254.   The options are exercisable at $1.67 per share, vest  through
  January  2004  and expire January 2009.  During the three  months  ended
  September 30, 2003, the Company recorded consulting expense of $1,795.

  During  July 2003, the Company issued 273,146 options to purchase common
  stock  to  Brunswick Corporation as a condition of guarantying the  Bank
  of  America  loan.  The options are exercisable at $.05 per share,  vest
  through  July 2007, expire in approximately July 2009 and are valued  at
  their  fair  value of $1,002,335 using the Black Scholes Pricing  Model.
  At  September  30, 2003, the Company has recorded deferred  interest  of
  $961,348  and  interest  expense of $40,988  in  connection  with  these
  Options.   The  Company further issued  an option to acquire  sufficient
  shares  which would result in Brunswick owning together with the  shares
  purchased   from   the  Company  President,  50.1%  of   the   Company's
  outstanding shares at the weighted average market closing price for  the
  previous  30  days.  The Company also agreed not  to  issue  any  equity
  instruments without prior approval of Brunswick Corporation.

  If  Brunswick Corporation exercised fully their options with the Company
  and Company President under the loan guarantee they would own 50.1 %  of
  the outstanding stock of the Company.

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - COMMITMENTS AND CONTINGENCIES

  Manufacturer  Repurchase  Agreements  -  The  Company  makes   available
  through  third-party finance companies floor plan financing for many  of
  its  dealers.   Sales  to  participating dealers  are  approved  by  the
  respective  finance  companies.   If a  participating  dealer  does  not
  satisfy  its  obligations under the floor plan  financing  agreement  in
  effect   with  its  commercial  lender(s)  and  boats  are  subsequently
  repossessed  by  the  lender(s), then under  certain  circumstances  the
  Company  may be required to repurchase the repossessed boats if  it  has
  executed  a  repurchase agreement with the lender(s).  At September  30,
  2003,  the Company had a total contingent liability to repurchase  boats
  in  the  event  of dealer defaults and if repossessed by the  commercial
  lenders  amounting  to  approximately  $16,625,330.   The  Company   has
  reserved for the future losses it might incur upon the repossession  and
  repurchase  of  boats  from  commercial  lenders.   The  amount  of  the
  allowance  is based upon probable future events which can be  reasonably
  estimated.   At  September 30, 2003, the allowance for boat  repurchases
  was $200,000.

  Dealer  Interest  -  The Company regularly pays a  portion  of  dealers'
  interest  charges  for  floor  plan financing.  These  interest  charges
  amounted  to  approximately $156,100 for the first  three  months  ended
  September 30, 2003 and the estimated unpaid dealer interest included  in
  accrued dealer incentives at September 30, 2003 amounted to $79,067.

  Interest   Rate  Risk  -  At  September  30,  2003,  the  Company   owed
  $17,885,653  on  a  $18,000,000 credit agreement with Bank  of  America.
  The  credit  agreement has $9,000,000 at one month LIBOR plus  2.25%  or
  3.77%  as  of September 30, 2003, and $9,000,000 under an interest  rate
  swap  to  provide a fixed rate of 6.02%.  An increase in the LIBOR  rate
  would  have  a  negative  effect on the results  of  operations  of  the
  Company.   A  hypothetical  50 basis point increase  in  interest  rates
  would result in an approximately $45,000 increase in interest expense.

  Engine  Supply  Agreement - The Company entered into  an  Engine  Supply
  agreement  with  Brunswick Corporation, as a condition  for  guarantying
  the  Bank  of America loan, to purchase all marine engines from  Mercury
  Marine division of Brunswick except for products in categories in  which
  Mercury  does  not manufacture or are unavailable from  Mercury  due  to
  production shortages.


NOTE 7 - TRANSACTIONS WITH RELATED PARTIES

  At  September  30, 2003, the Company had receivables and  advances  from
  its employees amounting to $4,205.

  During  the  three  month period ended September 30, 2003,  the  Company
  paid  $71,207  for services rendered to entities owned or controlled  by
  the Company's Chairman, President, and Chief Executive Officer.




<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7 - TRANSACTIONS WITH RELATED PARTIES [Continued]


  The  Company's  Chairman,  President, and Chief  Executive  Officer  has
  guaranteed  and personally pledged certain of his assets  as  collateral
  in  connection  with the $18,000,000 loan with Bank of America  and  the
  Brunswick  Corporation agreement to guarantee said loan.  The  president
  further  agreed  to  sell certain of his common shares  and  options  to
  purchase  common  shares  to Brunswick Corporation  in  connection  with
  their guarantee (See Note 4)


NOTE 8- INCOME TAXES

The Company has provided for deferred income taxes in accordance with SAFS
No. 109, Accounting for Income Taxes, whereby deferred income taxes are
determined based upon the enacted income tax rates for the years in which
these taxes are estimated to be payable or recoverable.  Deferred income
taxes arise from temporary differences resulting from a difference between
the tax basis of an asset or liability and its reported amount in the
financial statements.

  The  components of federal income tax expense from continuing operations
  consist of the following:

                                            Three months Ended September 30,
                                                 2003              2002
                                            _______________  _______________
                                               (Restated)
     Current income tax expense
          Federal                           $             -  $             -
          State                                           -                -
                                            _______________  _______________
     Net current tax (benefit)              $             -  $             -
                                            _______________  _______________

     Deferred tax expense (benefit) resulted
      from:
        Excess of tax over financial
          accounting depreciation           $       (17,937) $        91,448
       Donations                                       (936)             (78)
       Reserve for obsolete inventory                     -           51,480
       Dealer incentive reserves                          -           91,338
       Accrued dealer incentive interest            (16,518)         (37,670)
       Accrued executive compensation                19,845          (22,350)
       Accrued dealer service incentives                  -            4,902
       Inventory adjustment-Sec.263A                  4,209          (19,979)
       Increase in NOL carryforwards                (84,549)         (35,714)
       Valuations allowance                          95,886           35,714
                                            _______________  _______________
       Net deferred tax expense (benefit)   $             -  $       159,091
                                            _______________  _______________





<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8- INCOME TAXES [Continued]


  The reconciliation of income tax from continuing operations computed at
  the  U.S. federal statutory tax rate to the Company's effective rate  is
  as follows:

                                           Three Months Ended September 30,
                                            ______________________________
                                                 2003            2002
                                            ______________  ______________

     (Restated)
     Computed tax at the expected
      federal statutory rate                         34.00%          34.00%
     State income taxes, net of
      federal benefit                                 5.00            5.00
     Valuations allowance                           (26.91)          10.80
     Compensation from stock options                 (4.68)          (2.95)
     Officer's life insurance                        (6.14)           (.30)
     Other                                           (1.27)           1.80
                                            ______________  ______________
     Effective   income  tax   rates                     0%          48.40
                                            ______________  ______________

Significant components of the Company's deferred tax assets and liabilities
 are as follows:
                                         Three Months Ended   Year Ended
                                            September 30,      June 30,
                                          ________________  ________________
                                                2003              2003
                                          ________________  ________________
                                             (Restated)
Deferred tax assets:
     Warranty reserve                     $        351,000  $        351,000
     Obsolete inventory reserve                     19,500            19,500
     Accrued vacations                              73,685            73,685
     Allowance for boat repurchases                 78,000            78,000
     Bad debt reserve                               10,858            10,858
     Accrued Dealer incentive interest              41,896            25,378
     Inventory adjustments - Sec. 263A             106,012           110,220
     State NOL carryforwards                       497,693           486,854
     Federal NOL carryforwards                    2,330410         2,256,701
     Alternative minimum tax credits               119,049           119,049
     Accrued executive compensation                 35,540            55,384
     Donations carryforwards                         5,544             4,608
     Accrued dealer service incentives              38,122            38,122
     Health insurance reserve                       40,560            40,560
     Investment tax credits                         86,294            86,294
                                          ________________  ________________
Total deferred assets                            3,834,163         3,756,213
Less: valuation allowance for deferred
  tax assets                                    (2,438,799)       (2,342,912)
                                          ________________  ________________
Net deferred tax assets                   $      1,395,364  $      1,413,301



<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8- INCOME TAXES [Continued]

     Deferred tax liabilities:
     Excess of financial accounting
      depreciation over tax                     (1,395,364)       (1,413,301)
                                          ________________  ________________

     Net deferred tax assets
       (liabilities)                      $              -  $              -
                                          ________________  ________________


     Net  deferred  tax  assets (liabilities)  are  presented  as follows:

                                         Three Months Ended    Year Ended
                                            September 30,       June 30,
                                          ________________  ________________
                                                2003              2003
                                          ________________  ________________
                                             (Restated)        (Restated)
     Current deferred tax assets          $        291,404  $        303,823
     Deferred tax liabilities                     (291,404)         (303,823)
                                          ________________  ________________
            Net deferred tax assets
              (liabilities)               $              -  $              -
                                          ________________  ________________

     The  Company  has  unused  federal operating  loss  carryforwards  at
     September   30,  2003  and  2002  of  approximately  $6,854,148   and
     $6,360,786, respectively, which expire in various years through 2023.
     The  Company  has  unused  state  operating  loss  carryforwards   at
     September   30,  2003  and  2002  of  approximately  $9,953,878   and
     $9,460,516, respectively, which expire in various years through 2023.


NOTE 9 - EARNINGS (LOSS) PER SHARE

     The  computations  of earnings (loss) per share and diluted  earnings
     per  share  amounts  are based upon the weighted  average  number  of
     outstanding common shares during the periods, plus, when their effect
     is  dilutive,  additional  shares assuming the  exercise  of  certain
     vested stock options, reduced by the number of shares which could  be
     purchased  from the proceeds from the exercise of the  stock  options
     assuming they were exercised.









<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9 - EARNINGS (LOSS) PER SHARE [Continued]

  The   weighted  average  common  shares  and  common  equivalent  shares
  outstanding  for the three month periods ended September  30,  2003  and
  2002 for purposes of calculating earnings per share was as follows:

                                          September 30, September 30,
                                              2003          2002
                                          ____________  ____________
  Weighted average common shares
  outstanding used in basic earnings per
  share for the nine months ending           4,757,608     4,732,608

  Effect of dilutive stock options              66,481        49,764
                                          ____________  ____________

  Weighted average common shares and
  potential dilutive common equivalent
  shares outstanding used in dilutive
  earnings per share                         4,824,089     4,782,372
                                          ____________  ____________

  At September 30, 2003 there were 610,000 unexercised stock options, of
  which 480,000 were held by officers and directors of the Company at prices
  ranging from $3.58 to $4.67 per share that were not included in the
  computation of earnings per share because the effect is anti-dilutive.


NOTE 10 - VALUATION AND QUALIFYING ACCOUNTS

The balance in the following valuation and qualifying accounts at September
30, 2003 and change from the year ended June 30, 2003 are as follows:

                             Balance     Charge                  Balance
Valuation and Qualifying     June 30,  to Expense  Payments/  September 30,
Account  Description           2003    Adjustments Deductions     2003
___________________________ __________ ___________ __________ _____________
                            (Restated)  (Restated)              (Restated)
Allowance for Doubtful
  accounts                      27,841           -          -        27,841
Inventory Valuation Reserve     50,000           -          -        50,000
Deferred Tax Valuation
  Allowance                  2,342,912      95,887          -     2,438,799
Warranty Expense               900,000     289,892   (289,892)      900,000
Allowance for Boat
  Repurchases                  200,000           -          -       200,000







<PAGE>



            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11 - RESTATEMENT OF FINANCIAL STATEMENTS

The accompanying financial statements have been restated to reflect a
decrease in the deferred tax asset valuation allowance.  The valuation
allowance was increased by $95,887 to compensate for an increase in
deferred tax liabilities that are not available for offsetting against the
tax assets, thus increasing the amount of allowance needed.  Additionally,
the financial statements as filed originally were restated to reflect the
impact to the financial statements.

The Company's financial statements for the quarter ended September 30,
2003 have been restated as follows :


                                               Quarter Ended
                                             September 30, 2003
                                        ----------------------------
                                         As Reported    As Restated
                                        -------------  -------------
Statement of Operations Data:
   Deferred tax expense                 $    ( 11,338) $           -
   Net income (loss)                    $    (345,009) $    (356,347)
   Basic earnings (loss) per share      $        (.07) $        (.08)
   Diluted earnings (loss) per share    $        (.07) $        (.07)

Balance Sheet Data:
   Current tax assets                   $     800,716  $     291,404
   Total current assets                 $  11,334,887  $  10,825,575
   Total assets                         $  29,185,750  $  28,676,438
   Current maturities - long-term debt  $   1,057,604  $  18,226,930
   Accrued expenses                     $   1,198,296  $   1,356,817
   Total current liabilities            $   5,493,564  $  22,821,411
   Long-term debt                       $  18,211,437  $   1,042,111
   Deferred tax liability               $   1,190,021  $     291,404
   Total liabilities                    $  24,919,809  $  24,179,713
   Additional paid-in capital           $  11,438,886  $  10,475,448
   Retained earnings (deficit)          $  (6,146,335) $  (5,757,030)
   Deferred compensation for stock
     Options issued                     $      (2,090) $           -
   Deferred interest for options issued
     for Guarantee of long-term debt    $    (961,348) $           -
   Accumulated other comprehensive
     Income from interest rate swap     $           -  $    (158,521)
   Stockholders' equity                 $   4,265,941  $   4,496,725
   Total liabilities & stockholders'
     Equity                             $  29,185,750  $  28,676,438






<PAGE>


Item 2:  Management's Discussion and Analysis of Results of Operations
              and Financial Condition

Results of Operations.
The  operating income for the three months ended September  30,  2003  was
$110,752   or  $.02  per  share and compares to the  operating  income  of
$605,960 or $.13 per share for the three months ended September 30,  2002.
The  net loss for the three months ended September 30, 2003 was $(356,347)
or $(.08) per share as compared to a net income for the three months ended
September 30, 2002 of $169,244 or $.04 per share.

Net  sales  were  $12,885,232 for the first quarter of Fiscal  2004.   Net
sales  were $12,002,119 for the first quarter of Fiscal 2003.  During  the
first  quarter of Fiscal 2004, unit volumes increased over the same period
of  the prior year, with sales volume for three months ended September 30,
2003  at  92 units compared to 86 units for the prior year with  a  higher
than  expected  mix in the first quarter of Fiscal 2004 of  smaller  boats
versus larger boats.

Gross  profits on sales for the three months ended September 30, 2003  was
$2,032,181,  or  15.8% of net sales, as compared to the gross  profits  of
$1,905,951,  or  15.9% of net sales, for the three months ended  September
30,  2002.   The  gross margin for the three months did  not  increase  as
expected  due to higher sales of lower margin small sport boats and  lower
sales  of  higher margin large fish boats and cruisers than expected,  and
material costs were not reduced as early in the period as expected.

Selling expenses were $1,355,570 for the three months ended September  30,
2003  as  compared  to $832,978 for the three months ended  September  30,
2002.   Increased  selling expense resulted from  higher  racing  expense,
magazine advertising expense, fish team expense and marketing expense than
for the same period of the previous year.

General  and  administrative expenses were $565,859 for the  three  months
ended  September 30, 2003 compared to $467,013 for the three months  ended
September  30,  2002.  Increase in expenditures for use  of  an  airplane,
salaries,  investor  relations  and legal  fees,  partially  offset  by  a
reduction  in  consulting  expense resulted  in  increased  administrative
expenses as compared to the same period for the prior year.

Interest  expense  for  the  three months ended  September  30,  2003  was
$470,158 as compared to $306,201 for the three months ended September  30,
2002.  The significant increase in interest expense was due to the  write-
off  of  the amortization of closing costs for the G. E. Capital loan  and
the expensing of stock options issued to Brunswick Corporation.

Other  non-operating (income)/expense for the three months  September  30,
2003  was  $3,059  as  compared to $28,576  for  the  three  months  ended
September 30, 2002.

Current  tax expense is $0 and $0 for the three months ended September 30,
2003  and 2002, respectively.  Deferred tax expense is $0 and $159,091  at
September 30, 2003 and 2002, respectively.  Current tax expense of $0  for
the quarter ended September 30, 2003 is a result of the net operating loss
carryovers  from  the year ended June 30, 2002.  There remains  $6,637,357
for  Federal  and $9,737,087 for State tax purposes of net operating  loss
carryovers  available till the years 2022 and 2023, to offset current  tax
expenses.   The  deferred tax charge for the quarter ended  September  30,
2002  resulted  from  changes to the various temporary timing  differences
between book and tax as outlined in Note 7 to the financial statements.

The  ultimate realization of the benefits from the deferred tax assets  is
dependent  upon  the  Company's future earnings, the future  tax  laws  in
effect,  and other unknown factors; all of which are uncertain. For  these
reasons  and  because the Company has generated operating  tax  losses  in
recent years, the Company has elected to provide for a tax asset valuation
allowance of $2,438,799 at September 30, 2003 and $2,342,912 at  June  30,
2003.

Management is of the opinion the tax asset valuation allowance will not be
required in its entirety in the coming years.  Management estimates, based
on the Company's increased backlog of orders, that sales volumes will
continue to improve in the near future thus resulting in improved earnings
and partial absorption of the net operating tax loss carryovers.  However,
at this time the Company has chosen not to reduce the tax asset valuation
allowance for the following reasons: 1.) with the exception of order
backlog, it is very difficult to predict future sales volumes in an
uncertain economy that exists at the present time; and 2.) the Company's
inconsistent earnings history in recent years, which includes significant
losses in fiscal 2001 and 2002, as well as a first quarter loss in fiscal
year 2004. Currently, the tax asset valuation allowance is adjusted to the
extent that total deferred tax assets exceed total deferred tax
liabilities.  As operating results and the economy stabilize and future
sales volumes increase, consideration will be given to reducing or
eliminating the valuation allowance.


Liquidity and Capital Resources.
At  September  30,  2003,  the  Company had working  capital  deficit   of
$(11,995,836)  and $(3,997,437)  at June 30, 2003.

As  of September 30, 2003, the Company was not in compliance with its loan
covenants  with  the  senior  lender, Bank of America.   Specifically  the
covenants  require  certain financial ratios  to  be  maintained  at  each
reporting  anniversary  date.   All  of  the  ratios  required  under  the
covenants were not met.  Those ratios include:
                                                Bank            Company
                                             Requirement      Performance

Total Liabilities to Total Net Worth Ratio
  (not to exceed)                            4.75 to 1.00     5.84 to 1.00

Current Maturity Coverage Ratio (not to
  fall Below)                                1.50 to 1.00     1.12 to 1.00

Funded Debt to EBITDA Ratio (not to exceed)  4.25 to 1.00     5.08 to 1.00

As  of  the  filing date of this form 10-Q the Company had not obtained  a
waiver  of  compliance from Bank of America.  As a  result  of  this  non-
compliance,  the  entire  note payable balance  of  $17,885,653  has  been
classified as a current liability as of September 30, 2003.
On  December 8, 2003, Bank of America, with the concurrence of the  loan's
guarantors,  issued  a  waiver of compliance of  the  financial  covenants
required under the loan agreement.


Cash  increased  to  $3,111,177 at September  30,  2003  compared  to  the
$1,224,935  at  June  30, 2003.  The increase in  cash  can  be  generally
attributed to the $8,939,663 generated from financing activities primarily
attributed to the Bank of America loan ($18,000,000), less $8,980,049 used
to reduce existing long-term debt, $6,670,894 used by operating activities
attributable to reducing trade payables and increasing accounts receivable
and   $237,400  used  by  investing  activities  for  additional   capital
expenditures to build new molds and tooling.
Cash used by operations for the three months ended September 30, 2003  was
$6,670,894,  a  decrease of $7,495,948 compared to the  $825,054  of  cash
provided  in  operations for the three months ended  September  30,  2002.
This  change is primarily attributable to the reduction of trade  payables
using  proceeds  of  the  Bank of America loan and  increase  of  accounts
receivable  due  to  the  timing of collections from  third  party  dealer
financiers.

Cash  used  in  the  three  months ended September  30,  2003  to  acquire
additional  molds and tooling (investing activity) amounted  to  $202,700,
which   was  invested  in  the  new  38'  express  fish  boat  and   other
miscellaneous tooling projects.

For the remaining nine months of the year ending June 30, 2004 the Company
believes  that  it  will  continue to improve upon prior  years  operating
results.   Management  has developed and instituted a  plan  that  budgets
expenses and clearly outlines certain sales goals and expectations for the
remainder  of  the fiscal year. Management believes they  have  sufficient
resources and can generate sufficient cash flows from operations  to  meet
current liquidity demands.


Cautionary  Statement  for  Purposes of "Safe Harbor"  Under  the  Private
Securities Reform Act of 1995.

The  Company  may  from  time  to  time make  forward-looking  statements,
including  statements projecting, forecasting, or estimating the Company's
performance  and  industry trends.  The achievement  of  the  projections,
forecasts,  or  estimates  contained in these  statements  is  subject  to
certain risks and uncertainties, and actual results and events may  differ
materially from those projected, forecasted, or estimated.

The  applicable  risks  and  uncertainties include  general  economic  and
industry  conditions that affect all businesses, as well as, matters  that
are  specific to the Company and the markets it serves.  For example,  the
achievement  of  projections, forecasts, or  estimates  contained  in  the
Company's  forward-looking  statements may be  impacted  by  national  and
international economic conditions; compliance with governmental  laws  and
regulations;  accidents  and acts of God; and all  of  the  general  risks
associated with doing business.

Risks that are specific to the Company and its markets include but are not
limited  to compliance with increasingly stringent environmental laws  and
regulations; the cyclical nature of the industry; competition  in  pricing
and  new  product  development  from  larger  companies  with  substantial
resources; the concentration of a substantial percentage of the  Company's
sales  with a few major customers, the loss of, or change in demand  from,
any  of  which  could  have  a material impact  upon  the  Company;  labor
relations  at  the  Company and at its customers and  suppliers;  and  the
Company's  single-source supply and just-in-time inventory strategies  for
some  critical boat components, including high performance engines,  which
could  adversely affect production if a single-source supplier  is  unable
for any reason to meet the Company's requirements on a timely basis.


ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK.

Interest  Rate Risk - At September 30, 2003, the Company owed  $17,885,653
on  a  $18,000,000  credit agreement with Bank  of  America.   The  credit
agreement  has  $9,000,000 at one month LIBOR plus 2.25% or  3.77%  as  of
September 30, 2003, and $9,000,000 under an interest rate swap to  provide
a  fixed  rate  of  6.02%.   A hypothetical 100 basis  point  increase  in
interest  rates  would  result  in an approximately  $90,000  increase  in
interest  expense,  resulting  in  a  negative  impact  on  the  Company's
liquidity and results of operations.

ITEM 4:   Controls and Procedures

      On  September  30,  2003  an  evaluation  was  performed  under  the
supervision  and  with  the  participation of  the  Company's  management,
including the Chief Executive Officer and Chief Financial Officer,  of the
effectiveness   of   the   design   and  operation    of   the   company's
disclosure  controls and  procedures  pursuant to  Exchange Act Rule  13a-
14.    Based  on that evaluation,  the Chief Executive Officer  and  Chief
Financial  Officer have concluded that the design and operation  of  these
disclosure  controls  and procedures were effective.  Management's  review
and  evaluation of disclosure and internal controls and procedures  is  an
ongoing and continual process.  There have  been  no  significant  changes
in  the  Company's  internal  controls or  in  other  factors  that  could
significantly  affect  these controls subsequent  to  the  date  of  their
evaluation.


PART II.  Other Information.

ITEM 1:   Legal Proceedings.

There  were  no legal proceedings of a material nature during the  quarter
ending September 30, 2003

ITEM 2:   Change in Securities.

There was no change in securities during the quarter ending September  30,
2003.

Item 3:   Defaults Upon Senior Securities.

There  were  no defaults upon senior securities during the quarter  ending
September 30, 2003.

ITEM 4:   Submission of Matters to a vote of Security Holders.

There  were  no matters submitted to a vote of security holders securities
during the quarter ending September 30, 2003.


ITEM 5:   Other Information.

None.



ITEM 6:   Exhibits and Reports on Form 8 and Form 8-K.

     (1) Exhibits:
         (a) Exhibit 31.1, Certification pursuant to Rule 13a-14(a) by the
             Chief Executive Officer

             Exhibit 31.2, Certification pursuant to Rule 13a-14(a) by the
             Chief Financial Officer

             Exhibit 32, Certifications Pursuant to 18 U.S.C. Section 1350

         (b) No Current Reports on Form 8-K were filed by the Registrant
             during the first three months of Fiscal 2004.









                                 SIGNATURE



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



FOUNTAIN POWERBOAT INDUSTRIES, INC.
(Registrant)






By:    /s/Irving L. Smith             Date:  August 09, 2004
       Irving L. Smith
       Chief Financial Officer