<PAGE>

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

                              FORM 10-Q



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

            For the quarterly period ended March 31, 2004

                                 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 March 31, 2004
 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,
          March 31, 2004 and June 30, 2003                   3 - 4

          Unaudited Condensed Consolidated Statements of
          Operations, for the three and nine months ended
          March 31, 2004 and 2003                                5

          Unaudited Condensed Consolidated Statements of
          Cash Flows, for the three and nine months ended
          March 31, 2004 and 2003                            6 - 7

          Notes to Unaudited Condensed Consolidated
          Financial Statements                              8 - 16
     Item 2.  Management's Discussion and Analysis of
              Results of Operations and Financial
              Condition                                    17 - 19

     Item 3.  Quantitative and Qualitative Disclosures
              of Market Risk                                    19

     Item 4.  Controls and Procedures                           19

Part II     Other Information

     Items 1, 2, 3, 4, 5 & 6                                    20

     Signature                                                  21

     Exhibits





Page  2

<PAGE>
PART I.   FINANCIAL INFORMATION.
ITEM 1:   Financial Statements.

FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
<S>                                                                           <C>            <C>
March 31,      June 30,
ASSETS                                                                              2004           2003
                                                                                ------------   ------------
CURRENT ASSETS:
       Cash and cash equivalents                                                  3,584,625      1,224,935
       Accounts receivable, net                                                   3,585,857      2,015,371
       Inventories                                                                4,637,734      3,460,286
       Prepaid Expenses                                                             649,323        644,581
Current tax assets                                                                  806,066        807,315
                                                                                ------------   ------------
              Total Current Assets                                               13,263,605      8,152,488
                                                                                ------------   ------------
PROPERTY, PLANT AND EQUIPMENT                                                    42,374,815     41,676,783

       Less: Accumulated depreciation                                           (26,863,374)   (25,511,099)
                                                                                ------------   ------------
                                                                                 15,511,440     16,165,684
                                                                                ------------   ------------
CASH SURRENDER VALUE LIFE INSURANCE                                               1,535,284      1,378,626

OTHER ASSETS                                                                        671,351        736,288
                                                                                ------------   ------------
TOTAL ASSETS                                                                     30,981,680     26,433,086
                                                                                ============   ============









Continued

</TABLE>

Page  3

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
<S>                                                                            <C>            <C>

                                                                                  March 31,      June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY                                                2004           2003
                                                                                ------------   ------------
CURRENT LIABILITIES:
       Current maturities - long-term debt                                        1,091,865      1,060,444
       Current maturities - capital lease                                            17,709         20,118
       Accounts payable                                                           2,026,651      7,498,762
       Accounts payable - related party                                              14,125        169,043
       Accrued expenses                                                           1,045,707      1,317,398
       Dealer incentives                                                          1,040,802        190,010
       Customer deposits                                                            522,207        290,658
       Allowance for boat repurchases                                                75,000        200,000
       Warranty reserve                                                             900,000        900,000
                                                                                ------------   ------------
              Total Current Liabilities                                           6,734,066     11,646,433

LONG-TERM DEBT, less current maturities                                          17,976,978      8,986,160
CAPITAL LEASE, less current maturities                                                6,562         24,367
DEFERRED TAX LIABILITY                                                            1,149,066      1,207,958

COMMITMENTS AND CONTINGENCIES (NOTE 5)                                                    -              -
                                                                                ------------   ------------
              Total Liabilities                                                  25,866,672     21,864,918
                                                                                ------------   ------------
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                                                10,443,840     10,436,551
       Accumulated earnings (deficit)                                            (5,106,605)    (5,801,326)
                                                                                ------------   ------------
                                                                                  5,384,811      4,682,801

       Less: Treasury stock, at cost, 15,000 shares                                (110,748)      (110,748)
       Deferred compensation for stock options issued                                (2,090)        (3,885)
       Accumulated other comprehensive income from interest rate swap              (156,965)             -
                                                                                ------------   ------------
              Total Stockholders' Equity                                          5,115,008      4,568,168
                                                                                ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       30,981,680     26,433,086
                                                                                ============   ============

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

</TABLE>

Page  4

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
<S>                                              <C>            <C>            <C>            <C>

                                                  For the Three Months Ended    For the Nine Months Ended
                                                    March 31,      March 31,      March 31,      March 31,
                                                      2004           2003           2004           2003
                                                  ------------   ------------   ------------   ------------
NET SALES                                          15,790,650     12,783,311     42,037,693     37,799,524

COST OF SALES                                      12,671,582     10,871,979     34,859,344     31,611,866
                                                  ------------   ------------   ------------   ------------
       Gross Profit                                 3,119,068      1,911,332      7,178,349      6,187,658
                                                  ------------   ------------   ------------   ------------
EXPENSES:
       Selling expense                              1,593,717      1,396,465      3,999,981      3,311,758
       General and administrative                     487,891        330,467      1,573,103      1,228,721
                                                  ------------   ------------   ------------   ------------
       Total Expenses                               2,081,608      1,726,932      5,573,084      4,540,479
                                                  ------------   ------------   ------------   ------------
OPERATING INCOME (LOSS)                             1,037,460        184,400      1,605,265      1,647,179
                                                  ------------   ------------   ------------   ------------
NON-OPERATING INCOME (EXPENSE):
       Other income (expense)                           5,524        (29,799)         6,621            166
       Interest expense                              (288,619)      (245,939)      (974,809)      (766,615)
                                                  ------------   ------------   ------------   ------------
       Total Non-operating Income (Expense)          (283,095)      (275,738)      (968,188)      (766,449)
                                                  ------------   ------------   ------------   ------------
INCOME (LOSS) BEFORE INCOME TAXES                     754,365        (91,338)       637,077        880,730

CURRENT TAX EXPENSE (BENEFIT)                               -              -              -              -

DEFERRED TAX EXPENSE (BENEFIT)                        (30,646)        86,064        (57,643)       406,428
                                                  ------------   ------------   ------------   ------------
NET INCOME (LOSS)                                     785,011       (177,402)       694,720        474,302
                                                  ============   ============   ============   ============
BASIC EARNINGS (LOSS) PER SHARE                          0.17          (0.04)          0.15           0.10
                                                  ============   ============   ============   ============
WEIGHTED AVERAGE SHARES
       OUTSTANDING                                  4,757,608      4,745,108      4,757,608      4,745,108
                                                  ============   ============   ============   ============
DILUTED EARNINGS (LOSS) PER SHARE                        0.16             N/A          0.15           0.10
                                                  ============   ============   ============   ============
WEIGHTED AVERAGE SHARES
       OUTSTANDING ASSUMING DILUTION                4,833,092            N/A      4,825,605      4,811,619
                                                  ============   ============   ============   ============

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

</TABLE>

Page  5

<PAGE>

FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
<S>                                                                             <C>            <C>

                                                                                For the Nine Months Ended
                                                                                  March 31,    March 31,
                                                                                    2004           2003
CASH FLOWS FROM OPERATING ACTIVITIES:                                           ------------   ------------
       Net income (loss)                                                            694,720        474,302

       Adjustments to reconcile net income (loss) to net cash
         provided (used) by operating activities:
              Depreciation                                                        1,545,395      1,574,814
              Net deferred taxes                                                    (57,643)       406,428
              Loss on sale of fixed asset                                            11,696          9,890
              Amortization of deferred loan cost                                    266,963         46,350
              Non-cash expense                                                        9,085         13,440
              Increase in warranty reserve                                                -         30,000
              (Decrease) in allowance for boat repurchases                         (125,000)             -
              Change in assets and liabilities:
                     Decrease (increase) in accounts receivable                  (1,570,486)       438,802
                     (Increase) in inventories                                   (1,177,448)      (113,219)
                     (Increase) in prepaid expenses                                  (4,742)      (400,765)
                     Increase(decrease) in accounts payable                      (5,627,029)         7,726
                     (Decrease) in accrued expenses                                (271,691)       (92,886)
                     Increase(decrease) in dealer incentives                        850,792       (583,936)
                     Increase(decrease) in customer deposits                        231,549       (492,227)
                                                                                ------------   ------------
              Net Cash Provided (Used) by Operating Activities                   (5,223,839)     1,318,719
                                                                                ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of property, plant and equipment                                   (153,463)      (512,125)
       Investment in molds and related plugs                                       (774,384)      (576,302)
       Proceeds from sale of fixed assets                                            25,000        165,945
       (Increase) in other assets and liabilities                                  (210,555)      (277,026)
                                                                                ------------   ------------
              Net Cash Provided (Used) by Investing Activities                   (1,113,402)    (1,199,508)
                                                                                ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from long-term debt                                              18,067,841        343,029
       Payments of long-term debt                                                (9,222,781)      (756,778)
       Payment of deferred loan cost                                               (148,129)             -
       Proceeds from stock options exercised                                            -           16,800
                                                                                ------------   ------------
              Net Cash Provided (Used) by Financing Activities                    8,696,931       (396,949)
                                                                                ------------   ------------
Net increase in cash and cash equivalents                                         2,359,690       (277,738)

Cash and cash equivalents at beginning of year                                    1,224,935        329,640
                                                                                ------------   ------------
Cash and cash equivalents at end of period                                        3,584,625         51,902
                                                                                ============   ============
</TABLE>

Page  6

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents
(Continued)

<TABLE>
<CAPTION>
<S>                                                                             <C>            <C>
                                                                                For the Nine Months Ended
                                                                                  March 31,      March 31,
                                                                                    2004           2003
                                                                                ------------   ------------
Supplemental Disclosures of Cash Flow Information:
       Cash paid during the period for:
              Interest, net of amounts capitalized                                  977,171        771,831

              Income taxes                                                                -              -


</TABLE>


Supplemental Disclosures of Noncash Investing and Financing
Activities:

For the nine month period ended March 31, 2004:
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.

For the nine month period ended March 31, 2003:
The Company recorded consulting expense of $8,846 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  7

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE 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 March 31, 2004 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 three and nine
month periods ended March 31, 2004 and 2003 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 March 31, 2004 and June 30, 2003, the Company had $3,484,625
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 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.

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.


Page  8

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 1 - BASIS OF PRESENTATION (continued)

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 manufacturer's 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.

The Company has entered into arrangements that license other
foreign companies to manufacture boats utilizing the Company's
concepts and designs in exchange for royalties received for each
boat manufactured and sold. The Company accounts for these
royalties as sales revenue when payment is received.

Stock Options: The Company has stock incentive plans that provide
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 5. 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 Operations.

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 SFAS 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 the nine
months ended March 31, 2004 and 2003 consistent with the
provisions of SFAS No. 123, the Company's net income and earnings
per share would have been reduced to the pro forma amounts
indicated below:


Page  9

<PAGE>

FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 1 - BASIS OF PRESENTATION (continued)

<TABLE>
<CAPTION>
<S>                                               <C>            <C>            <C>            <C>
                                                   For the Three Months Ended    For the Nine Months Ended
                                                    March 31,      March 31,      March 31,      March 31,
                                                      2004           2003           2004           2003
                                                  ------------   ------------   ------------   ------------
Net Income (Loss) as Reported                           785,011       (177,401)       694,720        474,302
Add: Stock-based nonemployee compensation
       expense included in reported net income                -          4,600          1,795         15,446

Deduct: Total stock-based employee
       compensation expense determined
       under fair value based method                     (5,193)       (24,826)       (15,579)       (60,944)
                                                   ------------   ------------   ------------   ------------
Net Income (Loss) Proforma                              779,818       (197,627)       680,936        428,804
                                                   ============   ============   ============   ============

Basic earnings (loss) per share:   As reported             0.17          (0.04)          0.15           0.10
                                   Proforma                0.16          (0.04)          0.14           0.09

Diluted earnings (loss) per share: As reported             0.16           N/A            0.14           0.10
                                   Proforma                0.16           N/A            0.14           0.09


</TABLE>

NOTE 2 - ACCOUNTS RECEIVABLE

Accounts receivable at March 31, 2004 and June 30, 2003 consisted
of the following:

                                            March 31,      June 30,
                                              2004           2003
                                          ------------   ------------
Trade accounts receivable                   3,668,698      2,043,212
Allowance for doubtful accounts               (82,841)       (27,841)
                                          ------------   ------------
 Total                                      3,585,857      2,015,371
                                          ============   ============


The Company reviews its receivables on a regular basis and
adjusts its allowance for doubtful accounts based upon its best
judgment. The Company believes these amounts (net of the
allowance for doubtful accounts) to be fully realizable and has
pledged its receivables as collateral for its promissory note
with Bank of America.

NOTE 3 - INVENTORIES

Inventories at March 31, 2004 and June 30, 2003 consisted of the
following:

                                            March 31,      June 30,
                                              2004           2003
                                          ------------   ------------
 Parts and supplies                         1,895,490      1,593,057
 Work-in-process                            2,636,510      1,702,533
 Finished Goods                               155,734        214,696
                                          ------------   ------------
                                            4,687,734      3,510,286

 Obselete inventory reserve                   (50,000)       (50,000)
                                          ------------   ------------
 Total                                      4,637,734      3,460,286
                                          ============   ============


Page  10

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

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:

<TABLE>
<CAPTION>
<S>                                                              <C>            <C>

                                                                   March 31,      June 30,
                                                                     2004           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.                                    21,852         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.                                                    20,276         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.                                                1,366,491      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).                                  17,660,224            -
                                                                 ------------   ------------
                                                                  19,068,843     10,046,604

Less: Current maturities included in current liabilities          (1,091,865)    (1,060,444)
                                                                 ------------   ------------
                                                                  17,976,978      8,986,160
                                                                 ============   ============

</TABLE>

On July 17, 2003, the Company obtained an $18,000,000 long-term
loan from Bank of America which matures in five years.  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%
(2.50% for seven months as amended on February 10, 2004).


Page  11

<PAGE>

FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 4  - LONG-TERM DEBT AND PLEDGED ASSETS (Continued)

The 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. 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.  Chief among the
covenants are:

   1. Maintenance of a tangible net worth floor which the Company's
      tangible net worth may not fall below.

   2. A current maturity coverage ratio defined as the ratio of the
      current portion of long-term liabilities plus interest to "cash
      flow" which is defined as net income plus depreciation,
      amortization, interest and other non-cash expenditures which the
      Company's ratio may not fall below.

   3. A funded debt to earnings before interest, taxes, depreciation
      and amortization (EBITDA) ratio which is defined as the ratio of
      all outstanding debt both current and long-term to EBITDA which
      the Company's ratio may not exceed.

   4. Maintenance of a gross margin (gross profit) percentage floor
      which the Company's gross margin percentage may not fall below.

These covenants change and generally become more restrictive in
future periods. The following matrix lists the required covenant
levels for the periods then indicated:

<TABLE>
<CAPTION>
<S>                               <C>            <C>            <C>            <C>            <C>

                                     March 31,      June 30,     September 30,  December 31,     June 30,
                                       2004           2004           2004           2004           2005
                                   ------------   ------------   ------------   ------------   ------------
Tangible Net Worth Floor           4.300 Million $4.475 Million $4.500 Million $4.800 Million $5.225 Million

Current Maturity Coverage Ratio     1.25 to 1.00   1.30 to 1.00   1.40 to 1.00   1.50 to 1.00   1.50 to 1.00

Funded Debt to EBITDA               6.25 to 1.00   6.00 to 1.00   5.25 to 1.00   5.00 to 1.00   3.75 to 1.00

Gross Margin Floor %                      13.50%         14.50%         14.50%         14.50%         14.50%

</TABLE>

The Company is required to renegotiate these covenants prior to
June 30, 2005.
Page  12

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 4  - LONG-TERM DEBT AND PLEDGED ASSETS (Continued)

The Company's performance under the loan covenants for the
current quarter ended March 31, 2004 was as follows:

1. The applicable tangible net worth floor required by the
Company's lender for the current quarter ended March 31, 2004 was
a tangible net worth not less than $4.30 million. The Company's
tangible net worth for purposes of determining compliance was
$5.12 million.
2. The current maturity coverage ratio required by the Company's
lender for the current quarter ended March 31, 2004 was a ratio
not less than 1.25 to 1.00. The Company's current maturity
coverage ratio for purposes of determining compliance was 1.79 to
1.00.
3. The funded debt to EBITDA ratio required by the Company's
lender for the current quarter ended March 31, 2004 was a ratio
not more than 6.25 to 1.00. The Company's funded debt to EBITDA
ratio for purposes of determining compliance was 4.53 to 1.00.
4. The gross margin percentage floor required by the Company's
lender for the current quarter ended March 31, 2004 was a gross
margin percentage of not less than 13.5%. The Company's gross
margin percentage for purposes of determining compliance was
19.8%.

As of March 31, 2004 the Company was in compliance with all its
required covenants.

In addition to the covenants listed above, the Company may not
exceed its budgeted annual listing of fixed asset purchases
approved by the loan's guarantor, Brunswick Corporation and any
non-listed fixed asset purchases greater than $50,000 per
instance must have Brunswick Corporation's express approval prior
to acquisition. The Company expects this restriction to have no
material effect upon its ability to maintain and improve its
facilities and compete with other companies in the boating
industry.

Prepayment - The Company is obligated to pay in addition to
required monthly principle payments, and 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.

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.

Page  13

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 4  - LONG-TERM DEBT AND PLEDGED ASSETS (Continued)

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 that are exercisable in the event
of a default by the Company on its loan. In the event Brunswick
Corporation exercises its option to purchase the Company
President's shares the Company has agreed to issue additional
shares of common stock 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 Brunswicks 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 and nine months ended March 31, 2004, the Company
recorded consulting expense of $0 and $1,795, respectively as
compare to the respective March 31, 2003 amounts of $4,600 and
$15,446.

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 only under conditions of default by the Company of
its loan and Brunswick having exercised its guarantee of the
loan. Should Brunswick Corporation exercise its option to
purchase the Company President's stock, the Company has agreed to
issue additional common 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.

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 March 31, 2004, 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 $25,637,698.  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 March 31, 2004, the allowance for boat repurchases
was $75,000.

Page  14

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

The Company vigilantly monitors all its dealers for solvency
issues by examining dealer inventory levels and amounts carried
under floor plan financing. At present the Company has no dealers
that it believes to be at risk of default under their floor plan
arrangements.

Dealer Interest - The Company regularly pays a portion of
dealers' interest charges for floor plan financing. These
interest charges amounted to approximately $278,453 and $652,869,
respectively for the three and nine months ended March 31, 2004
and the estimated unpaid dealer interest included in accrued
dealer incentives at March 31, 2004 amounted to $51,540.

Interest Rate Risk - At March 31, 2004, the Company owed
$17,660,224 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 December 31, 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 March 31, 2004, the Company had receivables and advances from
its employees amounting to $9,730.

During the three and nine month period ended March 31, 2004, the
Company paid $55,000 and $178,500 respectively, for services
rendered to entities owned or controlled by the Company's
Chairman, President, and Chief Executive Officer.

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 paid $0 and $0 respectively for the three and nine
month periods ended March 31, 2004 and  $0 and $0 respectively,
for the three and nine month periods ended March 31, 2003 for
current income taxes and incurred a tax expense/(benefit) for
deferred income taxes for the three and nine month periods ended
March 31, 2004 of $(30,646) and $(57,643), respectively and for
the three and nine month periods ended March 31, 2003 of $86,064
and $406,428, respectively.

The Company has a net operating loss carry-forward for tax
purposes that is subject to a valuation reserve as well as other
permanent and timing differences of income and expenses for tax
and financial reporting purposes. Accordingly, the deferred tax
expense (benefit) reported on the unaudited condensed
consolidated statement of operations is not calculated according
to the statutory rate but according to changes in the balances of
the timing differences and the valuation reserve in accordance
with SFAS No. 109, "Accounting for Income Taxes".

Page  15

<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

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.

The weighted average common shares and common equivalent shares
outstanding for the three month and nine month periods ended
March 31, 2004 and 2003 for purposes of calculating earnings per
share was as follows:

<TABLE>
<CAPTION>
<S>                                               <C>            <C>            <C>            <C>
                                                  For the Three Months Ended    For the Nine Months Ended
                                                    March 31,      March 31,      March 31,      March 31,
                                                      2004           2003           2004           2003
                                                  ------------   ------------   ------------   ------------
Weighted average common shares outstanding
used in basic earnings per share for the three
and six months ending                               4,757,608      4,745,108      4,757,608      4,745,108

Effect of dilutive stock options                       75,484             N/A        67,997         66,511
                                                  ------------   ------------   ------------   ------------
Weighted average common shares and potential
dilutive common equivalent shares outstanding
used in dilutive earnings per share                 4,833,092             N/A     4,825,605      4,811,619


</TABLE>

At March 31, 2004 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
March 31, 2004 and change from the year ended June 30, 2003 are
as follows:

<TABLE>
<CAPTION>
<S>                                               <C>            <C>            <C>            <C>
                                                     Balance       Charge to      Payments        Balance
Valuation and Qualifying                            June 30,        Expense       and Other      March 31,
Account Description                                   2003        Adjustments    Reductions        2004
                                                  ------------   ------------   ------------   ------------
Allowance for doubtful accounts                        27,841         55,000              -         82,841
Inventory valuation reserve                            50,000              -              -         50,000
Deferred tax valuation allowance                    2,743,556              -       (338,111)     2,405,445
Warranty reserve                                      900,000        889,833        889,833      2,679,666
Allowance for boat repurchases                        200,000       (125,000)             -         75,000

</TABLE>


Page  16

<PAGE>
ITEM 2:   Management's Discussion and Analysis of Results of
Operations and Financial Condition

Results of Operations

The following tables should be read in conjunction with
management's discussion and set forth, for the periods and dates
indicated, certain financial, operating and balance sheet data
including, as applicable, the percentages of net sales:

<TABLE>
<CAPTION>
<S>                                       <C>           <C>      <C>          <C>     <C>         <C>

                                           For the Three Months Ended                    Change over the
                                           March 31, 2004         March 31, 2003         Prior Period

 Net sales                                  15,790,650   100.0%  12,783,311   100.0%   3,007,339    23.5%

 Cost of sales                              12,671,582    80.2%  10,871,979    85.0%   1,799,603    16.6%
                                           -----------   -----  -----------   -----  -----------   -----
 Gross profit                                3,119,068    19.8%   1,911,332    15.0%   1,207,736    63.2%
                                           ===========   =====  ===========   =====  ===========   =====
 Selling expense                             1,593,717            1,396,465              197,252
 General and administrative                    487,891              330,467              157,424
 Interest expense                              288,619              245,939               42,680

 Net income                                    785,011             (177,402)             962,413

 Boat shipments (Units shipped)                     94                   93                      1

                                           For the Nine Months Ended                     Change over the
                                           March 31, 2004         March 31, 2003         Prior Period

 Net sales                                  42,037,693   100.0%  37,799,524   100.0%   4,238,169    11.2%

 Cost of sales                              34,859,344    82.9%  31,611,866    83.6%   3,247,478    10.3%
                                           -----------   -----  -----------   -----  -----------   -----
 Gross profit                                7,178,349    17.1%   6,187,658    16.4%     990,691    16.0%
                                           ===========   =====  ===========   =====  ===========   =====
 Selling expense                             3,999,981            3,311,758              688,223
 General and administrative                  1,573,103            1,228,721              344,382
 Interest expense                              974,809              766,615              208,194
 Net income                                    694,720              474,302              220,418

 Boat shipments (Units shipped)                    299                  281                   18

</TABLE>

Net Sales - The increase in net sales of $3,007,339 and
$4,238,169 during the three and nine months ended March 31, 2004,
respectively, from the comparable periods during the previous
year was primarily attributable to increases in the unit selling
price of the boats produced by the Company.

Gross Profit - The increase in gross profit of $1,207,736 and
$990,691 for the three and nine months ended March 31, 2004,
respectively, as compared to the comparable periods in the
previous year is primarily attributable to the increase in the
unit selling price of boats sold as discussed above combined with
a favorable mix of boats sold by the Company. During the current
quarter and nine month period the Company sold larger boats
(which have a higher gross margin per sales dollar) in greater
numbers than during the comparable period in the previous year.

Selling Expenses - Selling expenses for the three months ended
March 31, 2004 were $197,252 more than the amounts incurred
during the comparable period in the previous year and represent
normal expenditures for sales and marketing activities of the
Company. The increase of $688,223 in selling expenses during the
nine months ended March 31, 2004 over the comparable nine months
in the previous year is primarily attributable to higher racing,
fish team and magazine advertising expenses incurred during the
first three months of the Company's fiscal year.

Page  17

<PAGE>
General and Administrative Expenses - The increase in general and
administrative expenses of $157,424 and $344,382 for the three
and nine months ended March 31, 2004, respectively, over the
comparable periods in the previous year is primarily attributable
to increases in accounting department expenditures relating to
compliance with certain provisions of the Sarbanes - Oxley Act
and increased travel costs consistent with the acquisition of
additional dealers during the period.

Interest Expense - The interest expense during the three months
ended March 31, 2004 of $288,619 was $42,680 greater than the
interest expense during the comparable quarter in the previous
year and represents normal debt service for the Company. The
$208,194 increase in interest expense during the nine months
ended March 31, 2004 over the comparable period in the previous
year is primarily attributable to the write-off of the
unamortized closing costs of a loan with G. E. Capital that was
paid with a partial amount of the proceeds of the Bank of America
loan during the quarter ended September 30, 3003.

Net Income - The increase in net income of $962,413 and $220,418
during the three and nine months ended March 31, 2004,
respectively, as compared to the comparable periods during the
previous year, is primarily attributable to the favorable mix of
units sold in the first, second and third quarters of this year
and the increased selling price per unit currently being enjoyed
by the Company.

Liquidity and Capital Resources

The following table sets forth certain items relating to the
measurement of liquidity and capital resources from the Company's
condensed consolidated financial statements for the dates
indicated:

                                          Balances as of
                             March 31,      June 30,       Increase
                               2004           2003        (Decrease)
                           ------------   ------------   ------------
 Cash and cash equivalents   3,584,625      1,224,935      2,359,690

 Working capital             6,529,539     (3,493,945)    10,023,484

 Current Ratio            1.97 to 1.00   0.71 to 1.00

 Quick Ratio              0.87 to 1.00   0.13 to 1.00


Cash increased by $2,359,690 to $3,854,625 during the nine months
ended March 31, 2003 from $1,224,935 at June 30, 2003. The
increase in cash can generally be attributed to financing
activities which arose from the Bank of America loan of
$18,000,000, less $8,980,049 which was used to reduce existing
long-term debt, $6,065,742 which was used to reduce trade
payables and $592,126 which was used to construct additional
molds for the new 38' express fish boat and other miscellaneous
tooling projects.

Cash used by operations for the nine months ended March 31, 2003
was $5,223,839 and was primarily attributable to the use of loan
proceeds to reduce trade payables as outlined in the immediately
preceding paragraph and to finance the increase in trade
receivables and inventories consistent with the improvement in
the Company's sales.

In the nine months following the borrowings from Bank of America
the Company has internally generated $1,942,776 of cash from
operations. The Company believes that it will continue to improve
upon the three and nine months ended March 31, 2004 and upon its
prior years operating results. With a favorable sales climate
induced by the improving trends in the U.S. economy and the
Company's operation's generated cash flows, Management believes
that it will have sufficient resources to meet its current and
future liquidity demands.

As described in Note 4 of the notes to the condensed consolidated
financial statements, the Company is required to maintain certain
covenants with its senior lender, Bank of America. On February
10, 2004 the Company renegotiated certain of these covenants as
described in Exhibit 10 of this quarterly report. The Company
entered into negotiations with its senior lender because it
believed that the covenants as originally conceived were too
restrictive and difficult to achieve and would lead to situations
in which the Company would be required to seek waivers of
covenants on a continual basis for each quarter a violation
occurred and the Company believed that it would not be able to
meet any of its original covenants for the current quarter.
Additionally, while the Company believed the covenants were too
restrictive at the present time, it believed that its financial
conditions and results of operations would continually improve
and that more restrictive covenants could be implemented in the
future. In consideration of the above the Company granted its
lender an additional .25% interest margin for a seven month
period which will have the effect of raising its interest expense
an additional $1,875 per month for the seven month period.

Page  18

<PAGE>
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 March 31, 2004, the Company owed
$17,660,224 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 December 31, 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 March 31, 2004 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.

Page  19

<PAGE>
PART II.  OTHER INFORMATION.

ITEM 1:   Legal Proceedings.

There were no legal proceedings of a material nature during the
quarter ending March 31, 2004.

ITEM 2:   Change in Securities.

There was no change in securities during the quarter ending March
31, 2004.

Item 3:   Defaults Upon Senior Securities.

There were no defaults upon senior securities during the quarter
ending March 31, 2004.

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

There were no matters submitted to a vote of the Company's
security holders during the quarter ending March 31, 2004.

ITEM 5:   Other Information.

On April 14, 2004 the Board of Directors adopted a new code of
ethics for the Company's executive officers and  members of the
Board of Directors. On May 4, 2004 the Company reproduced the
code of ethics on its internet website at www.fountainpowerboats.
com and filed Form 8-K and reproduced the code of ethics as an
exhibit to the report.

Additionally, the Board of Directors in accordance with the
listing requirements of NASDAQ created a Corporate Governance
Committee to perform, among other duties, act as the nominating
committee for the Board of Directors and make recommendations
regarding candidates for the Board of Directors, act as the
compensation committee with regard to recommendations regarding
the compensation of the Company's executive officers, and perform
other such governance tasks as may be required. The Company has
reproduced the charter for the Corporate Governance Committee
ethics on its internet website at www.fountainpowerboats.com.

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). A Current Report on Form 8-K was filed on
                   May 4, 2004 reproducing the Company's recently
                   adopted Code of Ethics for Executive Officers
                   and Directors. The Form 8-K is incorporated
                   herein by reference.

                   A Current Report on Form 8-K was filed on
                   February 19, 2004 reproducing the Company's
                   news release regarding orders for the
                   Company's boats at the Miami Boat Show. The
                   Form 8-K is incorporated herein by reference.

                   A Current Report on Form 8-K was filed on
                   April 30, 2004 reporting the Company's earnings
                   for the three and nine months ending March 31,
                   2004. The Form 8-K is incorporated herein by
                   reference.


Page  20

<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/ Irving L. Smith                     Date:  May 14, 2004
        Irving L. Smith
        Chief Financial Officer



Page  21

<PAGE>