<PAGE>












                    FOUNTAIN POWERBOAT INDUSTRIES, INC.

                                 FORM 10-Q

                             QUARTERLY REPORT

                  FOR THE QUARTER ENDED DECEMBER 31, 2002


                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC  20549





<PAGE>


                                 FORM 10-Q

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


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

             For the quarterly period ended December 31, 2002

                                    OR

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

      For the transition period from ____________ to _______________

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

         Class                  Outstanding at December 31, 2002

 Common Stock, $.01 par value          4,745,108 shares



<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY


                                   INDEX

                                                                     Page No.

Part I  Financial Information

       Unaudited Condensed Consolidated Balance Sheets,
        December 31, 2002 and June 30, 2002                            1 - 2

       Unaudited Condensed Consolidated Statements of Operations,
        for the three and six months ended December 31, 2002 and 2001    3

       Unaudited Condensed Consolidated Statements of Cash Flows,
        for the six months ended December 31, 2002 and 2001            4 - 5

       Notes to Unaudited Condensed Consolidated Financial Statements  6 - 9

       Management's Discussion and Analysis of Results
         of Operations and Financial Condition                         10-12

Part II  Other Information

       Item 2, 4, & 6                                                   12

       Signatures                                                       13

       Management Certification                                        14-15





<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                  ASSETS





                                     December 31,    June 30,
                                         2002          2002
                                    _____________   _____________
CURRENT ASSETS:
  Cash and cash equivalents          $   1,176,384  $     329,640
  Accounts receivable, net                 710,595      3,003,992
  Inventories                            3,567,563      3,090,451
  Prepaid expenses                         566,872        328,783
  Current tax assets                       899,245      1,132,181
                                    _____________   _____________
     Total Current Assets                6,920,659      7,885,047
                                    _____________   _____________
PROPERTY, PLANT AND EQUIPMENT           41,199,870     40,887,882

  Less:  Accumulated depreciation      (24,459,738)   (23,773,221)
                                    _____________   _____________
                                        16,740,132     17,114,661
                                    _____________   _____________

CASH SURRENDER VALUE LIFE INSURANCE      1,280,047      1,179,223

OTHER ASSETS                               324,864        355,765
                                    _____________   _____________
     Total Assets                    $  25,265,702  $  26,534,696
                                    _____________   _____________


















                                [Continued]

                                    -1-

<PAGE>


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                [Continued]


                                       December 31,    June 30,
                                           2002          2002
                                      _____________   _____________
CURRENT LIABILITIES:
  Current maturities - long-term debt $     900,610   $     919,182
  Current maturities - capital lease         16,462          15,674
  Accounts payable                        6,367,018       6,877,394
  Accounts payable - related party          142,895         147,234
  Accrued expenses                          865,792       1,193,672
  Dealer incentives                         431,770         921,707
  Customer deposits                         249,985         631,090
  Allowance for boat repurchases            200,000         200,000
  Warranty Reserve                          870,000         870,000
                                      _____________   _____________
     Total Current Liabilities           10,044,532      11,775,953

LONG-TERM DEBT, less current maturities   9,415,718       9,791,949
CAPITAL LEASE, less current maturities       26,785          35,212
DEFERRED TAX LIABILITY                    1,082,409         962,880

COMMITMENTS AND CONTINGENCIES [NOTE 5]            -               -
                                      _____________   _____________
     Total Liabilities                   20,569,444      22,565,994
                                      _____________   _____________



STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value,
   200,000,000 shares authorized,
   4,745,108  and 4,732,608 shares
   issued and outstanding, respectively      47,451          47,326
  Additional paid-in capital             10,343,936      10,343,935
  Accumulated earnings                   (5,578,769)     (6,280,679)
                                      _____________   _____________
                                          4,812,618       4,110,582
Less: Treasury stock, at cost,
       15,000 shares                       (110,748)       (110,748)
      Deferred compensation for
       stock options issued                  (5,612)        (31,132)
                                      _____________   _____________
     Total Stockholders' Equity           4,696,258       3,968,702
                                      _____________   _____________
   Total Liabilities and
      Stockholders' Equity            $  25,265,702   $  26,534,696
                                      _____________   _____________




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

                                  -2-


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                 For The Three             For The Six
                                  Months Ended              Months Ended
                                  December 31               December 31
                             _____________________      ______________________
                               2002         2001          2002          2001
                             ________     ________      ________     _________
NET SALES                $ 12,941,227  $ 6,553,076  $ 25,016,213  $ 14,930,387


COST OF SALES              10,570,853    7,256,987    20,739,887    15,146,984
                             ________     ________      ________     _________
     Gross Profit           2,370,374     (595,201)    4,276,326      (216,597)

EXPENSES
     Selling Expense        1,082,315      987,379     1,915,293     1,550,432

     Selling Expense-               -            -             -             -
      related parties
     General &                406,241      475,781       815,946       963,506
      Administrative
                             ________     ________      ________     _________

Total Expenses              1,488,556    1,463,160     2,731,239     2,513,938
                             ________     ________      ________     _________



OPERATING INCOME (LOSS)       881,818   (2,058,361)    1,545,087    (2,730,535)


NON-OPERATING INCOME
(EXPENSE)

     Other Income               1,389        5,135        29,965         4,283
     Interest Expense        (214,475)    (262,516)     (520,676)     (404,365)
                             ________     ________      ________     _________


INCOME (LOSS) BEFORE TAX      668,732   (2,315,742)    1,054,376    (3,130,617)


CURRENT TAX EXPENSE                 -            -             -             -

DEFERRED TAXES (BENEFIT)      171,024     (898,091)      352,465    (1,206,323)
                             ________     ________      ________     _________


NET INCOME (LOSS)             497,708   (1,417,651)      701,911    (1,924,293)
                             ________     ________      ________     _________

EARNINGS (LOSS) PER SHARE       .10        (.30)           .15         (.41)
                             ________     ________      ________     _________

WEIGHTED AVERAGE
SHARES OUTSTANDING          4,745,108    4,732,608     4,745,108     4,732,608
                             ________     ________      ________     _________


DILUTED EARNINGS PER            .03         N/A            .07          N/A
SHARE
                             ________     ________      ________     _________

DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING
ASSUMING DILUTION           4,825,399       N/A        4,803,886        N/A
                             ________     ________      ________     _________

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

                                  -3-


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                        For the Six Months Ended
                                             December 31,
                                       ____________________________
                                           2002         2001
                                       ___________  _______________
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                     $  701,911   $(1,924,293)
                                       ___________  _______________
  Adjustments to reconcile net
   income (loss) to net cash
   provided by operating activities:
     Depreciation expense                1,028,308     1,126,268
     Net deferred taxes                    352,465    (1,206,323)
     Gain on sale of fixed asset            29,613             -
     Amortization of deferred loan cost     30,900      (500,446)
     Non-cash expense                        8,846             -
     Change in assets and liabilities:
       (Increase) decrease in
         accounts receivable             2,293,396     1,370,303
       (Increase) decrease in
         inventories                      (477,112)      546,938
       (Increase) decrease in
         prepaid expenses                 (238,089)     (201,275)
       Increase (decrease) in
         accounts payable                 (514,714)   (1,486,903)
       Increase (decrease) in
         accrued expenses                 (327,880)     (111,216)
       Increase (decrease) in
         dealer incentives                (489,937)   (1,175,510)
       Increase (decrease) in
         customer deposits                (381,106)      149,371
                                       ___________  _______________
        Net Cash Provided (Used) by
          Operating Activities          $2,016,601   $(2,912,640)
                                       ___________  _______________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant,
   and equipment                          (793,891)     (905,504)
  Proceeds from sale of fixed assets       110,500             -
  (Increase) in other assets              (100,824)      172,801
                                       ___________  _______________
        Net Cash Provided (Used)
         by Investing Activities         $(784,215)    $(732,703)
                                       ___________  _______________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt           $  95,000    $3,344,344
  Payments of long-term debt              (497,442)      (50,270)
  Proceeds from common stock issuances      16,800             -
                                       ___________  _______________
        Net Cash Provided (Used)
         by Financing Activities         $(385,642)  $ 3,294,074
                                       ___________  _______________
Net increase (decrease) in cash
 and cash equivalents                     $846,744   $  (351,269)

Cash and cash equivalents at
 beginning of year                        $329,640      $796,606
                                       ___________  _______________

Cash and cash equivalents at
 end of period                         $ 1,176,384    $  445,337
                                       ___________  _______________


                                [Continued]
                                     -4-

<PAGE>


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                [Continued]

                                        For the Six Months Ended
                                              December 31,
                                       ____________________________
                                           2002         2001
                                       ___________  _______________
Supplemental Disclosures of Cash
 Flow Information:

  Cash paid during the period for:

    Interest, net of amounts capitalized  $    520,677   $ 404,365
    Income Taxes                          $          -   $       -


Supplemental Disclosures of Noncash Investing and Financing Activities:

  For the six month period ended December 31, 2002:

     The Company recorded consulting expense of $8,846 as a result of
     amortization of deferred compensation from 30,000 options issued to
     purchase common stock during fiscal 2002 vesting through December
     2004.

  For the six month period ended December 31, 2001:

       None



























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

                                 -5-
<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
  December 31, 2002 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, 2002 audited financial statements.  The  results
  of  operations for the period ended December 31, 2002 is 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 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  December
  31,  2002  and  June 30, 2002, the Company had $1,176,384 and  $329,640,
  respectively, in excess of federally insured amounts held in cash.

  Recently  Enacted Accounting Standards: During quarter  ended  September
  30,   2002,   the  Company  adopted  Emerging  Issue  Task  Force   01-9
  "Accounting  for  Consideration  Given  by  a  Vendor  to   a   Customer
  (including a Reseller of the Vendor's Products)", requiring the  Company
  to  reclassify dealer incentive interest paid to resellers from  Selling
  Expense  to  Net  Sales.  Prior  year  financial  statements  have  been
  reclassified to reflect the change in accounting principle.

  Reclassifications:   The  financial  statements  for  years   prior   to
  December  31,  2002 have been reclassified to conform with headings  and
  classifications used in the  December 31, 2002 financial statements.

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


                                 -6-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION [Continued]

  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 is the method of sales recognition  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.

  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.   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.


NOTE 2 - ACCOUNTS RECEIVABLE

  As  of  December 31, 2002, accounts receivable were $710,595 net of  the
  allowance  for  bad  debts of $27,841.  This  is  a  decrease  from  the
  $3,003,992  in net accounts receivable recorded at June  30,  2002.   Of
  the   balance  at  December  31,  2002,  $8,352  subsequently  has  been
  collected  as  of  January  22,  2003, and  the  remaining  $702,243  is
  believed to be fully collectible.


NOTE 3 - INVENTORIES

  Inventories  at  December 31, 2002 and June 30, 2002  consisted  of  the
  following:


                                December 31,   June 30,
                                    2002        2002
                                 __________  __________
      Parts and supplies         $2,106,588  $2,071,709
      Work-in-process             1,500,222   1,047,154
      Finished goods                136,146     278,981
      Obsolete inventory reserve   (175,393)   (307,393)
                                 __________  __________
           Total                 $3,567,563  $3,090,451
                                 __________  __________

                                     -7-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4- COMMON STOCK

  During  September 2002, a director of the Company exercised  his  option
  to  purchase 12,500 shares of the Company's common stock at  $1.344  per
  share.

  During  December  2001, the Company issued 10,000  options  to  purchase
  common  stock  to  a  consultant for services to be rendered  valued  at
  $12,342.   The options are exercisable at $1.45 per share, vest  through
  December  2004  and expire December 2009.  During the six  months  ended
  December 31, 2002, the Company recorded consulting expense of $1,996.

  During  January  2002,  the Company issued 20,000  options  to  purchase
  common  stock  to  a  consultant for services to be rendered  valued  at
  $27,953.   The options are exercisable at $1.67 per share, vest  through
  January  2004  and  expire January 2009.  During the  six  months  ended
  December 31, 2002, the Company recorded consulting expense of $6,850.

NOTE 5 - 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  December  31,
  2002,  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  $22,760,059.   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  December 31, 2002, 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  $443,942 and the  estimated  unpaid  dealer
  interest  included  in accrued expenses amounted  to  $221,013  for  the
  first six months ended December 31, 2002.

NOTE 6 - TRANSACTIONS WITH RELATED PARTIES

  At  December 31, 2002, the Company had receivables and advances from its
  employees amounting to $11,874.

  During  the  six month period ended December 31, 2002, the Company  paid
  $6,400  for  services rendered to entities owned or  controlled  by  the
  Company's Chairman, President, and Chief Executive Officer.

  The  Company paid $28,000 during the six month period ended December 31,
  2002  for  advertising  services received from  an  entity  owned  by  a
  Company director.

  During  September 2002, a director of the Company exercised  options  to
  purchase 12,500 shares of common stock at $1.344 per share.

                                -8-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7- INCOME TAXES

  For  the  six month period ended December 31, 2002 and 2001, the Company
  paid   $0  and  $0  for  current  income  taxes  and  incurred   a   tax
  expense/(benefit)   for   deferred  income   taxes   of   $352,465   and
  $(1,206,323), respectively.

NOTE 8 - 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.   Diluted earnings per share for the six month  period  ended
  December 31, 2001, was not presented as its effect was anti-dilutive.

  The   weighted  average  common  shares  and  common  equivalent  shares
  outstanding  for the six month period ended December 31, 2002  and  2001
  for purposes of calculating earnings per share was as follows:

                                       December 31,    December 31,
                                           2002            2001
                                       __________      ___________
  Weighted average common shares
   outstanding used in basic
   earnings per share for the six
   months ending                        4,738,858       4,732,608

  Effect of dilutive stock options         65,028               -
                                       __________      ___________
  Weighted average common shares
   and potential dilutive common
   equivalent shares outstanding
   used in dilutive earnings
   per share                            4,803,886       4,732,608
                                       __________      ___________

  At  December  31, 2002 there were 480,000 unexercised stock options,  of
  which  480,000  were held by officers and directors of  the  Company  at
  prices  ranging from $3.94 to $5.00 per share that were not included  in
  the  computation  of  earnings per share because  the  effect  is  anti-
  dilutive.


NOTE 9 - GOING CONCERN

  The  accompanying financial statements have been prepared in  conformity
  with generally accepted accounting principles of the United States which
  contemplate  continuation of the Company as a going  concern.   However,
  the  Company  has current liabilities in excess of current assets  which
  raises substantial doubt about the ability of the Company to continue as
  a  going concern.  In this regard, management has accelerated efforts to
  introduce  new  products,  has executed plans and  actions  that  reduce
  expenses  through  direct  labor  and  overhead  cost  cuts,   and   has
  implemented   significant  reductions  to  selling   and   general   and
  administrative expenses.  Management believes it could raise  additional
  funds through debt or equity financing.  There is no assurance that  the
  Company  will  be  successful  in raising  this  additional  capital  or
  achieving sustained profitable operations.  The financial statements  do
  not  include any adjustments that might result from the outcome of these
  uncertainties.

                                    -9-


<PAGE>

Management's Discussion and Analysis of Results of Operations
and Financial Condition

Results of Operations.

The  operating  income for the three months ended December  31,  2002  was
$881,818  or  $.18  per  share  and compares  to  the  operating  loss  of
$(2,058,361)  or $(.43) per share for the three months ended December  31,
2001.   The  net income for the three months ended December 31,  2002  was
$497,708 or $.10 per share as compared to a net loss for the three  months
ended  December  31, 2001 of $(1,417,651) or $(.30) per  share.   The  net
income for the six months ended December 31,2002 was $701,911 or $.15  per
share as compared to a net loss for the six months ended December 31, 2001
of $(1,924,293) or $(.41) per share.

Net  sales  were $12,941,227 for the second quarter of Fiscal  2003.   Net
sales  were $6,553,076 for the second quarter of Fiscal 2002.  During  the
second  quarter of Fiscal 2003, unit volumes doubled from the same  period
of  the prior year, with sales volume for three months ended December  31,
2002  at  101 units compared to 50 units for the prior year.  Fiscal  2003
net  sales  for  the six months ended December 31, 2002 were  $25,016,213,
compared to net sales of $14,930,387 for the same six months period of the
prior year.

Gross  margin  on sales for the three months ended December 31,  2002  was
$2,370,374  as  compared to the gross margin of $(595,201) for  the  three
months  ended  December 31, 2001.  Gross margin for the six  months  ended
December  31,  2002  was  $4,276,326  compared  to  the  gross  margin  of
$(216,597)  for the same period of the previous year.  The improvement  in
margin  resulted  from  improved unit sales for the period,  and  improved
product sales mix.

Selling  expenses were $1,082,315 for the three months ended December  31,
2002 as compared to $987,379 for the three months ended December 31, 2001.
Increased  selling  expense  resulted  from  higher  sales  salaries   and
commissions,  directly associated with the improvement in net  sales  from
the same period for the previous year.

General  and  administrative expenses were $406,241 for the  three  months
ended  December 31, 2002 compared to $475,781 for the three  months  ended
December  31, 2001.  A decrease in executive salaries during Fiscal  2003,
when  the  Company's CEO took a temporary reduction in  pay,  created  the
savings as compared to the same period for the prior year.

Interest expense for the three months ended December 31, 2002 was $214,475
as compared to $262,516 for the three months ended December 31, 2001.

Other  non-operating  (income)/expense for the three months  December  31,
2002  was  $(1,389)  as compared to $(5,135) for the  three  months  ended
December 31, 2001.

                                -10-
<PAGE>



Financial Condition.

The  Company's  summary cash flows for the six months ended  December  31,
2002 are:

     Net cash provided by operating activities      $  2,016,601
     Net cash used in investing activities              (784,215)
     Net cash used in financing activities              (385,642)
     Net increase in cash                           $    846,744

This  net increase in cash and cash equivalents compares to a net decrease
of $351,269 for the six months ended December 31, 2001.

Cash  used in the six months ended December 31, 2002 to acquire additional
property,  plant, and equipment (investing activity) amounted to  $793,891
which  was  invested in tooling changes to the new 48' Express Cruiser,  a
new style 38' fish boat deck, and other miscellaneous tooling projects.

Cash used by financing activities were largely due to principal reductions
of long term debt.

The first six months of fiscal 2003 shows significant improvement in sales
and  profit.   This  improvement provides the Company  with  a  basis  for
expecting  continued success in the remaining six months  of  this  fiscal
year.   Continued success will provide sufficient cash flow  to  meet  the
Company's needs and obligations.

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

                               -11-
<PAGE>


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


companies  with substantial resources; the concentration of a  substantial
percentage of he 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.




PART II.  Other Information.

ITEM 2:   Change in Securities.

            There  was no change in securities during the quarter
            ending December  31, 2002

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

     (1)  Exhibits:  None.

      (a)   No Amendments on Form 8 were filed by the Registrant during
            the second three months of Fiscal 2002.

      (b)   No  Current Reports on Form 8-K were filed by  the  Registrant
            during the first six months of Fiscal 2002.






                                  -12-
<PAGE>



                                 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/ Reginald M. Fountain, Jr.            Date:     February 10, 2003
         Principal Financial Officer







                                      -13-
<PAGE>

                               CERTIFICATION

     I, Reginald M. Fountain, Jr., certify that:

1.   I have reviewed this quarterly report on Form 10Q of Fountain
     Powerboat 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 13a-14 and 15d-14) for the registrant
     and we have:
     a)   designed such disclosure controls and procedures 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)   evaluated the effectiveness of the registrant's disclosures
          controls and procedures as of a date within 90 days prior to the
          filing date of this quarterly report (the "Evaluation Date");
          and
     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;
5.   The registrant's other certifying officers and I have disclosed,
     based on our most recent evaluation, 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 in the design or operation of
          internal controls which could adversely affect the registrant's
          ability to record, process, summarize and report financial data
          and have identified for the registrant's auditors any material
          weaknesses in internal controls; 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; and
6.   The registrant's other certifying officers and I have indicated in
     this quarterly report whether or not there were significant changes
     in internal controls or in other factors that could significantly
     affect internal controls subsequent to the date of our most recent
     evaluation, including any corrective actions with regard to
     significant deficiencies and material weaknesses.


Date:  February 10, 2003         /s/ Reginald M. Fountain, Jr.

                                  Reginald M. Fountain, Jr.
                                  President/CEO/Principal Financial Officer



                                   -14-
<PAGE>


(Certification Pursuant to 18 U.S.C. Section 1350)

     The undersigned hereby certifies that (i) the foregoing quarterly
report on Form 10-Q filed by Fountain Powerboat Industries, Inc. (the
"Company") for the quarter ended December 31, 2002, fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, and (ii) the information contained in that Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company.


Date:  February 10, 2003            /s/ Reginald M. Fountain, Jr.
                                        Reginald M. Fountain, Jr.
                                        President and Chief Executive Officer



Date:  February 10, 2003            /s/ Reginald M. Fountain,Jr.
                                        Reginald M. Fountain, Jr.
                                        Principal Financial Officer




                                     -15-

<PAGE>