<PAGE>












                    FOUNTAIN POWERBOAT INDUSTRIES, INC.

                                 FORM 10-Q

                             QUARTERLY REPORT

                 FOR THE QUARTER ENDED SEPTEMBER 30, 2003


                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC  20549







<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 September 30, 2003

                                    OR

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

      For the transition period from ____________ to _______________

                      Commission File Number  0-14712

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

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


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

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

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

         Yes[ X ]                   No[     ]

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

         Yes[     ]                 No[ X ]

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

         Class                  Outstanding at September 30, 2003

 Common Stock, $.01 par value          4,757,608 shares


<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY


                                   INDEX

                                                                       Page No.

Part I Financial Information

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

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

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

            Notes to Unaudited Condensed Consolidated Financial
              Statements                                                   6-13

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

       Item 3.  Quantitative and Qualitative Disclosures of Market Risk     16

       Item 4.  Controls and Procedures                                     16

Part II  Other Information

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

       Signature                                                            18

       Exhibits. Management Certifications                                19-21


<PAGE>

PART I.   Financial Information.

ITEM 1:   Financial Statements.

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                  ASSETS





                                    September 30,    June 30,
                                         2003          2003
                                    _____________  _____________
CURRENT ASSETS:
  Cash and cash equivalents          $ 3,111,177     $1,224,935
  Accounts receivable, net             3,288,612      2,015,371
  Inventories                          3,328,162      3,460,286
  Prepaid expenses                       806,220        644,581
  Current tax assets                     800,716        807,315
                                    _____________  _____________
     Total Current Assets             11,334,887      8,152,488
                                    _____________  _____________
PROPERTY, PLANT AND EQUIPMENT         41,914,183     41,676,783

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

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

OTHER ASSETS                             536,406        736,288
                                    _____________  _____________
     Total Assets                    $29,185,750    $26,433,086
                                    _____________  _____________


















                                [Continued]

                                     -1-
<PAGE>


            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                [Continued]


                                         September 30,    June 30,
                                            2003          2003
                                       _____________    _____________
CURRENT LIABILITIES:
  Current maturities - long-term debt   $ 1,057,604       $ 1,060,444
  Current maturities - capital lease         17,709            20,118
  Accounts payable                        1,909,442         7,498,762
  Accounts payable - related party           25,081           169,043
  Accrued expenses                        1,198,296         1,317,398
  Dealer incentives                          76,485           190,010
  Customer deposits                         108,947           290,658
  Allowance for boat repurchases            200,000           200,000
  Warranty reserve                          900,000           900,000
                                       _____________    _____________
     Total Current Liabilities            5,493,564        11,646,433

LONG-TERM DEBT, less current maturities  18,211,437         8,986,160
CAPITAL LEASE, less current maturities       24,787            24,367
DEFERRED TAX LIABILITY                    1,190,021         1,207,958

COMMITMENTS AND CONTINGENCIES [NOTE 5]            -                 -
                                       _____________    _____________
     Total Liabilities                   24,919,809        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             11,438,886        10,436,551
  Accumulated earnings                   (6,146,335)       (5,801,326)
                                       _____________    _____________
                                          5,340,127         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)
  Deferred interest for options
    issued for quarantee
    of long-term debt                      (961,348)                -
                                       _____________    _____________
     Total Stockholders' Equity           4,265,941         4,568,168
                                       _____________    _____________
     Total Liabilities and
       Stockholders' Equity            $ 29,185,750      $ 26,433,086
                                       _____________    _____________


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

                                    -2-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                     For the Three Months Ended
                                           September 30,
                                      ___________________________
                                         2003          2002
                                      _____________ _____________
NET SALES                             $ 12,885,232  $ 12,002,119

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

CURRENT TAX EXPENSE                              -             -
DEFERRED TAX EXPENSE (BENEFIT)             (11,338)      159,091
                                      _____________ _____________

NET INCOME (LOSS)                     $   (345,009) $    169,244
                                      _____________ _____________

BASIC EARNINGS (LOSS) PER SHARE       $       (.07) $        .04
                                      _____________ _____________
WEIGHTED AVERAGE SHARES
  OUTSTANDING                            4,757,608     4,732,608
                                      _____________ _____________

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

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


                                    -3-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                      For the Three Months Ended
                                             September 30,
                                      ___________________________
                                          2003           2002
                                      _____________   ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                    $  (345,009)   $ 169,244

  Adjustments to reconcile net
    income (loss) to net cash
    provided by operating
    activities:
     Depreciation expense                  521,041      528,770
     Net deferred taxes                    (11,338)     159,091
     Gain on sale of fixed asset                 -       29,114
     Amortization of deferred
       loan cost                           226,997       15,450
     Non-cash expense                       42,783        4,416
     Change in assets and liabilities:
       (Increase) decrease in
          accounts receivable           (1,273,241)   1,514,043
       (Increase) decrease in
          inventories                      132,124     (525,410)
       (Increase) decrease in
          prepaid expenses                (161,639)      14,483
       Increase (decrease) in
          accounts payable              (5,733,283)    (503,483)
       Increase (decrease) in
          accrued expenses                (119,102)     (95,683)
       Increase (decrease) in
          dealer incentives               (113,525)    (126,336)
       Increase (decrease) in
          customer deposits               (181,711)    (358,645)
                                      _____________   ___________
        Net Cash Provided (Used) by
          Operating Activities         $(6,670,894)   $  825,054
                                      _____________   ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant,
    and equipment                          (34,700)     (310,405)
  Investment in molds and
    related plugs                         (202,700)      110,000
  (Increase) decrease in other assets      199,882        (3,000)
                                      _____________   ___________
        Net Cash Provided (Used)
          by Investing Activities     $    (37,518)   $ (203,405)
                                      _____________   ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt        $ 18,067,841    $        -
  Payments of long-term debt            (8,980,049)     (237,598)
  Payment of deferred loan cost           (148,129)            -
  Proceeds from stock options exercised          -        16,800
                                      _____________   ___________
        Net Cash Provided (Used)
          by Financing Activities     $  8,939,663    $ (220,798)
                                      _____________   ___________
Net increase (decrease) in cash
  and cash equivalents                $  1,886,242    $  400,851

Cash and cash equivalents at
  beginning of year                   $  1,224,935    $  329,640
                                      _____________   ___________

Cash and cash equivalents at
  end of period                       $  3,111,177    $  730,491
                                [Continued]

                                      -4-

<PAGE>
            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             Increase (Decrease) in Cash and Cash Equivalents

                                [Continued]

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

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


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

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

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




















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

                                   -5-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

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

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

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

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

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

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

                                   -6-
<PAGE>
            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION [Continued]

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

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

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

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

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

                                 -7-
<PAGE>
            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION [Continued]

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

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

                                                  For the Quarter
                                                 Ended September 30,
                                              __________________________
                                                  2003           2002
                                              ____________   ___________
 Net Income (Loss)  As reported                $ (345,009)   $  169,244
 Add: Stock-based employee compensation
   expense included in reported net income          1,795         4,416
 Deduct: Total stock-based employee
   compensation expense determined under
   fair value based method                         (5,193)      (11,292)
                                              ____________   ___________
 Net Income (Loss)  Proforma                   $ (348,407)   $  162,368
                                              ____________   ___________

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

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

NOTE 2 - ACCOUNTS RECEIVABLE

  As  of  September 30, 2003, accounts receivable were $3,288,612  net  of
  the  allowance for bad debts of $27,841.  This is an increase  from  the
  $2,015,371  in net accounts receivable recorded at June  30,  2003.   Of
  the  balance  at  September 30, 2003, $2,201501  subsequently  has  been
  collected  as  of  October  20, 2003, and the  remaining  $1,087,111  is
  believed to be fully collectible.

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

                                   -8-

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - INVENTORIES

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


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

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

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

NOTE 4  LONG-TERM DEBT AND PLEDGED ASSETS

  The following is a summary of long-term debt:

                                           September 30,    June 30,
                                                 2003         2003
                                             __________   ___________
     9.99% loans payable to a
       financial institution for
       the purchase of vehicles,
       monthly payments totaling
       $1,383 through August 2005,
       secured by the vehicles purchased.        26,012       32,224

     6.5% loan payable to a
       financial institution for
       the purchase of a vehicle,
       monthly payments of $726
       through December 2006,
       secured by the vehicle purchased.         24,097       25,306

     7.93% to 8% loans payable
       borrowed against the cash
       surrender value of key-man
       life insurance policies
       1998, 2001, and 2002,
       monthly payments of $25,004.           1,333,279    1,265,438

     $10,000,000 credit agreement
       with a financial Corporation
       (See Below).                                   -    8,723,636

     $18,000,000 credit agreement
       with a financial Corporation
       (See Below).                          17,885,653            -
                                             __________   ___________
                                             19,269,041   10,046,604
     Less: Current maturities
      included in current liabilities:       (1,057,604)  (1,060,444)
                                             __________   ___________
                                            $18,211,437   $ 8,986,160
                                             __________   ___________

                                  -9-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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

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

    Funded Debt to EBITDA ratio           Applicable Margin
    ___________________________           _________________

    Less than or equal to 1.74 to 1.00                1.90%

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

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

    Greater than or equal to 3.76 to 1.00             2.50%

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

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

  Prepayment  -  The Company is obligated to pay in addition  to  required
  monthly  principle  payments, an additional 50% of the  excess  earnings
  after debt service, within 120 days after  the  close of  the  Company's
  fiscal year end.

  Should  the  Company prepay the balance of the note within one  year  of
  the  date  of  the note, the Company must pay one percent  (1%)  of  the
  unpaid  balance on the date before the date of the prepayment  is  made.
  If  the  Company prepays the balance of the note after one year  of  the
  date of the note, the Company must pay a half of a percent (.5%) of  the
  unpaid balance on the date before the date the prepayment is made.

                                      -10-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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

  Loan  Guarantee  - The Company entered into an agreement with  Brunswick
  Corporation,  a division of which supplies marine engines  used  in  the
  Company's  product,  wherein Brunswick Corporation agreed  to  guarantee
  the  $18,000,000  in  debt financing, in return  the  Company  President
  granted  Brunswick  the  option to purchase his common  shares  and  his
  options  to  purchase  common  shares of  the  Company.   The  Company's
  President  further  agreed to indemnify Brunswick  for  all  amounts  in
  excess  of  $14,700,000.  The Company issued 273,146 options to  acquire
  common  shares at $.05 per share, and agreed to issue additional options
  to  acquire  sufficient shares which would result  in  Brunswick  owning
  together  with the shares purchased from the Company President 50.1%  of
  the  Company's outstanding shares at the weighted average market closing
  price  for  the previous 30 days.  The Company further entered  into  an
  exclusive  supply agreement and agreed to restrictions  on  the  Company
  issuing  any  equity securities that would dilute Brunswick's  potential
  equity  interest in the Company upon exercise of their options with  the
  Company  and  Company's  President without  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  months  ended
  September 30, 2003, the Company recorded consulting expense of $1,795.

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

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

                                    -11-

<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - COMMITMENTS AND CONTINGENCIES

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

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

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

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

NOTE 7 - TRANSACTIONS WITH RELATED PARTIES

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

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

  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).

                                    -12-
<PAGE>

            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8- INCOME TAXES

  For  the  three  month period ended September 30,  2003  and  2002,  the
  Company  paid  $0  and $0 for current income taxes and  incurred  a  tax
  expense/(benefit) for deferred income taxes of $(11,338)  and  $159,091,
  respectively.

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 periods ended September  30,  2003  and
  2002 for purposes of calculating earnings per share was as follows:

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

  Effect of dilutive stock options           66,481          49,764
                                         __________   _____________
  Weighted average common shares
  and potential dilutive common
  equivalent shares outstanding
  used in dilutive earnings
  per share                               4,824,089       4,782,372
                                         __________   _____________

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

NOTE 10 - VALUATION AND QUALIFYING ACCOUNTS

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

                                   Balance   Charge to                 Balance
Valuation and Qualifying           June 30,  Expense      Payments/   September
Account Description                  2003    Adjustments  Deductions  30, 2003
_______________________________   _________  ___________  __________  _________
Allowance for Doubtful accounts      27,841          -           -       27,841
Inventory Valuation Reserve          50,000          -           -       50,000
Deferred Tax Valuation Allowance  2,743,556     84,548           -    2,828,104
Warranty Expense                    900,000    289,892    (289,892)     900,000
Allowance for Boat Repurchases      200,000          -           -      200,000

                                         -13-

<PAGE>

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

Results of Operations.
The  operating income for the three months ended September  30,  2003  was
$110,752   or  $.02  per  share and compares to the  operating  income  of
$605,960 or $.13 per share for the three months ended September 30,  2002.
The  net loss for the three months ended September 30, 2003 was $(345,009)
or $(.07) per share as compared to a net income for the three months ended
September 30, 2002 of $169,244 or $.04 per share.

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

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

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

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

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

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

Liquidity and Capital Resources.
At  September  30, 2003, the Company had working capital of $5,841,323  an
improvement of $9,335,268 over the ($3,493,945) working capital deficit at
June 30, 2003.

Cash  increased  to  $3,111,177 at September  30,  2003  compared  to  the
$1,224,935  at  June  30, 2003.  The increase in  cash  can  be  generally
attributed to the $8,939,663 generated from financing activities primarily
attributed to the Bank of America loan ($18,000,000), less $8,980,049 used
to reduce existing long-term debt, $6,670,894 used by operating activities
attributable to reducing trade payables and increasing accounts receivable

                              -14-
<PAGE>

and   $237,400  used  by  investing  activities  for  additional   capital
expenditures to build new molds and tooling.
Cash used by operations for the three months ended September 30, 2003  was
$6,670,894,  a  decrease of $7,495,948 compared to the  $825,054  of  cash
provided  in  operations for the three months ended  September  30,  2002.
This  change is primarily attributable to the reduction of trade  payables
using  proceeds  of  the  Bank of America loan and  increase  of  accounts
receivable  due  to  the  timing of collections from  third  party  dealer
financiers.

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

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


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

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

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

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

                                -15-
<PAGE>


ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4:   Controls and Procedures

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






                                    -16-
<PAGE>

PART II.  Other Information.

ITEM 1:   Legal Proceedings.

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

ITEM 2:   Change in Securities.

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

Item 3:   Defaults Upon Senior Securities.

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

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

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

ITEM 5:   Other Information.

None.

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

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

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

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

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




                                      -17-
<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:  November 13, 2003
         Irving L. Smith
         Chief Financial Officer









                                     -18-
<PAGE>