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

                                FORM 10-Q/A



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

               For the quarterly period ended 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>

                            Explanatory Note

      Fountain Powerboat Industries, Inc. primarily is filing this
Amendment to its Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2004 to restate earnings and earnings per share due to
adjustments to its previously reported allowance for deferred tax assets
as required by SFAS 109.  Previous amounts did not reflect fully the
effects of certain NOL carryforwards and their affects on the net of
deferred tax assets and liabilities.  See Note 7 to the financial
statements for further information related to this issue.  Additional
comments were also added to the Managements' Discussion and Analysis,
Results of Operations, to further explain the Company's reasons for
maintaining the deferred tax asset allowance.

     Other changes were effected in the Notes to the Financial Statements
as clarifications of information previously reported on the original Form
10-Q.  Note 1. Basis of Presentation offers additional information related
to royalty income reporting and presentation.  Note 10. Valuation and
Qualifying Accounts, contains a table that originally had mathematical
errors contained therein.  All  of the corrections are contained in this
amendment.

      Additional comments have been added to the original Management's
Discussion and Analysis, Results of Operations, related to reductions in
the allowance for boat repurchases, and Liquidity and Capital Resources,
regarding current and future cash flows.

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

      With the exception of the foregoing corrections, no other
information in the Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2004 has been supplemented, updated or amended














<PAGE>


PART I.   FINANCIAL INFORMATION.
ITEM 1:   Financial Statements.


FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>

<CAPTION>

                                                                           March 31,              June 30,
ASSETS                                                                       2004                   2003
                                                                           Restated               Restated

<S>                                                                <C>                    <C>
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                                                   319,517                303,823

                Total Current Assets                                      12,777,056              7,648,996

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                                                         $    30,495,131        $    25,929,594




</TABLE>





Continued


<PAGE>


FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                          March 31,               June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY                                                         2004                   2003
                                                                                           Restated               Restated

<S>                                                                                <C>                   <C>
CURRENT LIABILITIES:
        Current maturities - long-term debt                                          $    1,091,865         $    1,060,444
        Current maturities - capital lease                                                   17,709                 20,118
        Accounts payable                                                                  2,026,652              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                                                 6,734,067             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                                                                      319,517                303,823

COMMITMENTS AND CONTINGENCIES (NOTE 5)                                                             -                      -

                Total Liabilities                                                        25,037,124             20,960,783

STOCKHOLDERS' EQUITY:
        Common stock, $.01 par value, 200,000,000 shares authorized,
                4,757,608 shares issued and outstanding                                      47,576                 47,576
        Additional paid-in capital                                                       10,443,840             10,436,551
        Accumulated earnings (deficit)                                                   (4,763,606)            (5,400,683)

                                                                                          5,727,810              5,083,444

        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                                                5,458,007              4,968,811

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           $   30,495,131         $   25,929,594


</TABLE>

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


<PAGE>


FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                         For the Three Months Ended                For the Nine Months Ended
                                                          March 31,            March 31,            March 31,            March 31,
                                                            2004                 2003                 2004                 2003
                                                          Restated                                  Restated

<S>                                                <C>                  <C>                 <C>                  <C>
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)                                     -               86,064                    -              406,428

NET INCOME (LOSS)                                     $      754,365         $   (177,402)        $    637,077         $    474,302

BASIC EARNINGS (LOSS) PER SHARE                       $         0.16         $      (0.04)        $       0.13         $       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         $       0.13         $       0.10

WEIGHTED AVERAGE SHARES
        OUTSTANDING ASSUMING DILUTION                       4,833,092                 N/A            4,825,605            4,811,619


</TABLE>

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




<PAGE>


FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>

                                                                                         For the Nine Months Ended
                                                                                          March 31,            March 31,
                                                                                             2004                 2003
                                                                                           Restated

<S>                                                                                <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
        Net income (loss)                                                             $     637,077        $     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                                                                -              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>


(Continued)



<PAGE>


FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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


<TABLE>
<CAPTION>                                                                                For the Nine Months Ended
                                                                                          March 31,            March 31,
                                                                                            2004                 2003

<S>                                                                               <C>                 <C>
Supplemental Disclosures of Cash Flow Information:
        Cash paid during the period for:
                Interest, net of amounts capitalized                                 $     977,171        $     771,831

                Income taxes                                                         $           -        $           -




</TABLE>


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



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>


            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>

            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.

During  the  quarter ended March 31, 2004, 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. The Company  accounts  for  these
royalties as sales revenue in the period when earned.  Royalties  for  the
nine months ended March 31, 2004 are less than 10% of total revenues.

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>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION (continued)

<TABLE>

<CAPTION>

                                                          For the Three Months Ended             For the Nine Months Ended
                                                          March 31,          March 31,           March 31,         March 31,
                                                            2004               2003                2004              2003
                                                          Restated                               Restated

<S>                                               <C>                   <C>                <C>               <C>
Net Income (Loss) as Reported                         $       754,365      $  (177,401)        $  637,077       $    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                            $      749,172       $  (197,627)         $ 623,293        $   428,804

Basic earnings (loss) per share:     As reported      $         0.16       $     (0.04)         $    0.13        $      0.10
                                     Proforma         $         0.16       $     (0.04)         $    0.13        $      0.09

Diluted earnings (loss) per share:   As reported      $         0.16       $       N/A          $    0.13        $      0.10
                                     Proforma         $         0.16       $       N/A          $    0.13        $      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



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




<PAGE>

         FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4  - LONG-TERM DEBT AND PLEDGED ASSETS

The following is a summary of long-term debt:

<TABLE>
<CAPTION>

                                                                          March 31,               June 30,
                                                                             2004                   2003

<S>                                                             <C>                    <C>
 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>

            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>

                        March 31,           June 30,       September 30,       December 31,        March 31,         June 30,
                          2004                2004             2004               2004               2005             2005

<S>                <C>               <C>                <C>                <C>               <C>                <C>
Tangible Net
  Worth Floor         4.300 Million     $4.475 Million     $4.500 Million     $4.800 Million    $4.950 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      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      4.35 to 1.00      3.75 to 1.00

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


</TABLE>

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


<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 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>

            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  Brunswick's  prior  approval.    Brunswick
Corporation's  options to purchase vest upon the earlier of the  repayment
or  default  of  $18,000,000 notes payable, or July  1,  2007.   Brunswick
Corporation's option expires no earlier than approximately 180 days  after
vesting.

NOTE 5 - COMMON STOCK

During  January 2002, the Company issued 10,000 options to purchase common
stock to a consultant for services to be rendered valued at $14,254.   The
options are exercisable at $1.67 per share, vest through January 2004  and
expire  January  2009.  During the three 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>

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








<PAGE>


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - INCOME TAXES (Continued)

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

                                                Nine months Ended March 31,
                                                __________________________
                                                    2004          2003
                                                ____________  ____________
                                                  Restated
     Current income tax expense:
          Federal                               $          -  $          -
          State                                            -             -
                                                ____________  ____________
     Net current tax (benefit)                  $          -  $          -
                                                ____________  ____________

     Deferred tax expense (benefit) resulted from:
          Excess of tax over financial
            accounting depreciation             $    (58,893) $    167,086
     Donations                                             -          (193)
          Warranty reserve                                 -       (11,700)
          Reserve for obsolete inventory                   -        61,383
          Reserve for boat repurchases                48,750             -
          Dealer incentive reserves                        -        97,945
          Bad debt reserves                          (21,450)      (10,242)
          Accrued dealer incentive interest          (46,795)       20,374
          Accrued executive compensation              51,620       (33,000)
          Accrued dealer service incentives           11,310       119,080
          Inventory adjustment-Sec.263A              (37,505)       (4,305)
          Health insurance reserve                    (4,680)            -
          Decrease (increase) in NOL
           carryforwards                             338,111       (53,691)
          Valuations allowance                      (280,468)       53,691
                                                ____________  ____________
     Net deferred tax expense (benefit)         $          -  $    406,428
                                                ____________  ____________

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

                                                Nine Months Ended March 31,
                                                __________________________
                                                    2004          2003
                                                ____________  ____________
                                                  Restated
     Computed tax at the expected
       federal statutory rate                         34.00%        34.00%
     State income taxes, net of
       federal benefit                                 5.00          5.00
     Valuations allowance                            (44.02)         6.10
     Compensation from stock options                    .11         (1.10)
     Officer's life insurance                           .66          (.13)
     Other                                             4.25          2.28
                                                ____________  ____________
     Effective income tax rates                           0%        46.15%
                                                ____________  ____________


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - INCOME TAXES (Continued)

Significant components of the Company's deferred tax assets and
liabilities are as follows:
                                                 Nine Months
                                                    Ended      Year Ended
                                                  March 31,     June 30,
                                                ____________  ____________
                                                    2004          2003
                                                ____________  ____________
                                                  Restated      Restated
Deferred tax assets:
     Warranty reserve                           $    351,000  $    351,000
     Obsolete inventory reserve                       19,500        19,500
     Accrued vacations                                73,685        73,685
     Allowance for boat repurchases                   29,250        78,000
     Bad debt reserve                                 32,308        10,858
     Accrued Dealer incentive interest                72,173        25,378
     Inventory adjustments - Sec. 263A               147,725       110,220
     State NOL carryforwards                         443,508       486,854
     Federal NOL carryforwards                     1,961,938     2,256,701
     Alternative minimum tax credits                 119,049       119,049
     Accrued executive compensation                    3,764        55,384
     Donations carryforwards                           4,608         4,608
     Accrued dealer service incentives                26,812        38,122
     Health insurance reserve                         45,240        40,560
     Investment tax credits                           86,294        86,294
                                                ____________  ____________
Total deferred assets                              3,416,854     3,756,213
Less: valuation allowance
        for deferred tax assets                   (2,062,446)   (2,342,912)
                                                ____________  ____________
Net deferred tax assets                            1,354,408     1,413,301

Deferred tax liabilities:
     Excess of financial accounting
      depreciation over tax                       (1,354,408)   (1,413,301)
                                                ____________  ____________

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











<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - INCOME TAXES (Continued)

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

                                                 Nine Months
                                                    Ended      Year Ended
                                                  March 31,     June 30,
                                                ____________  ____________

                                                    2004          2003
                                                ____________  ____________
                                                  Restated      Restated
     Current deferred tax assets                     319,517       303,823
     Deferred tax liabilities                       (319,517)     (303,823)
                                                ____________  ____________
Net deferred tax assets (liabilities)           $          -  $          -
                                                ____________  ____________

The  Company has unused federal operating loss carryforwards at March  31,
2004  and  2003  of approximately $5,770,406 and $6,406,881, respectively,
which  expire in various years through 2023.  The Company has unused state
operating  loss carryforwards at March 31, 2004 and 2003 of  approximately
$8,870,136  and  $9,506,611, respectively, which expire in  various  years
through 2023.


NOTE 9 - EARNINGS (LOSS) PER SHARE

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

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>
                                                       For the Three Months Ended         For the Nine Months Ended
                                                       March 31,         March 31,        March 31,        March 31,
                                                         2004              2003             2004             2003

<S>                                                <C>                <C>              <C>               <C>

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>


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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

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>


                                                  Balance       Charge to          Payments         Balance
Valuation and Qualifying                         June 30,        Expense          and Other        March 31,
Account Description                                2003        Adjustments        Reductions         2004

                                                Restated                           Restated         Restated

<S>                                          <C>             <C>               <C>             <C>

Allowance for doubtful accounts                    27,841          55,000                 -          82,841
Inventory valuation reserve                        50,000               -                 -          50,000
Deferred tax valuation allowance                2,342,913               -          (280,468)      2,062,445
Warranty reserve                                  900,000         889,833          (889,833)        900,000
Allowance for boat repurchases                    200,000        (125,000)                -          75,000


</TABLE>

NOTE 11 - RESTATEMENT OF FINANCIAL STATEMENTS

The accompanying financial statements have been restated to reflect a
decrease in the deferred tax asset valuation allowance.  The valuation
allowance was reduced by ($280,468) for the nine months ended  March 31,
2004 to compensate for deferred tax liabilities that are available for
offsetting against the tax assets, thus reducing the amount of allowance
needed.

The Company's financial statements for the three months and the nine
months ended March 31, 2004 have been restated as follows :


                             Three Months Ended          Nine Months Ended
                               March 31, 2004              March 31, 2004
                            ------------------------  ------------------------
                            As Reported  As Restated  AsReported   As Restated
                            -----------  -----------  -----------  -----------
Statement of Operations Data:
  Deferred tax expense      $   (30,646) $       -0-  $   (57,643) $       -0-
  Net income (loss)         $   785,011  $   754,365  $   694,720  $   637,077
  Basic earnings (loss)
    per share               $       .17  $       .16  $       .15  $       .13
  Diluted earnings (loss)
    per share               $       .16  $       .16  $       .15  $       .13

Balance Sheet Data:
  Current tax assets                                  $   806,066  $   319,517
  Total current assets                                $13,263,605  $12,777,056
  Total assets                                        $30,981,680  $30,495,131
  Deferred tax liability                              $ 1,149,066  $   319,517
  Total liabilities                                   $25,866,672  $25,037,124
  Retained earnings (deficit)                         $(5,106,605) $(4,763,606)
  Stockholders' equity                                $ 5,115,008  $ 5,458,007
  Total liabilities &
    stockholders' Equity                              $30,981,680  $30,495,131




<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>


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


<S>                                        <C>                <C>       <C>               <C>      <C>             <C>
 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                                   $      754,365              $    (177,402)              $    931,767

 Boat shipments (Units shipped)                           94                         93                          1

</TABLE>

<TABLE>
<CAPTION>

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

<S>                                         <C>                <C>       <C>              <C>       <C>              <C>
 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                                   $      637,077               $    474,302                $   162,775

 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.


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 $931,767 and $162,775  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.

Income Tax - Current tax expense is $0 and $0 for the three months and the
nine months ended March 31, 2004, respectively.  Current tax expense is $0
and  $0  for  the three months and the nine months ended March  31,  2003,
respectively.  Deferred tax expense is $0 and $0 for the three months  and
the  nine months ended March 31, 2004, respectively.  Deferred tax expense
is  $86,064  and $406,428 for the three months and the nine  months  ended
March  31, 2003, respectively.  Current tax expense of $0 for the  quarter
and  $0  for the nine months ended March 31, 2003 and 2002 is a result  of
the  net  operating  loss carryovers from the year ended  June  30,  2002.
There remains $6,637,357 for Federal and $9,737,087 for State tax purposes
of  net operating loss carryovers available till the years 2022 and  2023,
to  offset current tax expenses.  The deferred tax charge for the  quarter
and  nine months ended March 31, 2003 resulted from changes to the various
temporary timing differences between book and tax as outlined in Note 7 to
the financial statements.

The  ultimate realization of the benefits from the deferred tax assets  is
dependent  upon  the  Company's future earnings, the future  tax  laws  in
effect,  and other unknown factors; all of which are uncertain. For  these
reasons  and  because the Company has generated operating  tax  losses  in
recent years, the Company has elected to provide for a tax asset valuation
allowance of $2,062,446 at March 31, 2004 and $2,342,912 at June 30, 2003.

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


Allowance  for  boat repurchases - The Company for the past several  years
has drastically reduced the number of repurchase events that have occurred
as  a  result of instituting a program of financial reviews of new dealers
prior  to  accepting those new dealers into the Company's dealer  network.
As a direct result of instituting this new dealer program, the reserve for
boat  repurchases has been reduced to reflect the average number and costs
of  repurchase  events that occur in a fiscal year.  The effects  of  this
change  was  to  reduce  the allowance for boat repurchases  by  $125,000.
There were no cash effects resulting from the change.


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:

<TABLE>
<CAPTION>

                                           Balances as of
                                             March 31,          June 30,           Increase
                                                2004              2003            (Decrease)
                                              Restated          Restated           Restated

<S>                                    <C>                <C>                <C>

 Cash and cash equivalents                    3,584,625         1,224,935         2,359,690

 Working capital                              6,042,989        (3,997,437)       10,040,426

 Current Ratio                              1.90 to 1.00      0.66 to 1.00

 Quick Ratio                                1.21 to 1.00       .36 to 1.00

</TABLE>


Cash  increased by $2,359,690 to $3,584,625 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.

Management is of the opinion that cash flows will be sufficient to satisfy
its  current and future liquidity demands because of the increase in sales
volumes  and sales backlogs at the date of this filing. Subsequent  events
related to the senior debt placement strengthens the Company's ability  to
pay  off  all  the outstanding current debt and existing long-term  debts.
Additionally the Company has maintained a historical sales backlog through
the date of this report.

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.

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.

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.



                                 SIGNATURE



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



FOUNTAIN POWERBOAT INDUSTRIES, INC.
(Registrant)






By: /s/Irving L. Smith
__________________________    Date:  August 09, 2004

  Irving L. Smith
  Chief Financial Officer