SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

                 X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)

                  For the Fiscal Year Ended September 30, 2003

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                         Commission file number 0-20757

                           TRAVIS BOATS & MOTORS, INC.
             (Exact name of registrant as specified in its charter)


                                      TEXAS

                         (State or other jurisdiction of
                         incorporation or organization)

                                   74-2024798

                                (I.R.S. Employer
                             Identification Number)

               12116 Jekel Circle, Suite 102, Austin, Texas 78727

                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (512) 347-8787
        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.01 Par Value

                                (Title of class)


     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  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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference  in Part  III of  this  Report  on Form  10-K or any
amendment to this Report on Form 10-K. _____

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes ___ No X

     The aggregate  market value of the voting stock (which  consists  solely of
shares of Common Stock) held by non-affiliates of the Registrant as of March 31,
2003,  (based upon the last reported price of $0.29 per share) was approximately
$999,325.21 on such date.

     The  number of shares of the  issuer's  Common  Stock,  par value  $.01 per
share,  outstanding  as of December 31, 2003 was 4,329,727,  of which  2,880,849
shares were held by non-affiliates.

     Documents  Incorporated  by Reference:  Portions of  Registrant's  Proxy or
Information Statement relating to the 2004 Annual Meeting of Shareholders,  have
been incorporated by reference herein (Part III).


<PAGE>


                  TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES

                               REPORT ON FORM 10-K

                                TABLE OF CONTENTS

                                                                           PAGE

RISK FACTORS .................................................................1


PART I .......................................................................7

   Item 1.  Business  ........................................................7

   Item 2.  Properties ......................................................12

   Item 3.  Legal Proceedings ...............................................13

   Item 4.  Submission of Matters to a Vote of Security Holders .............13

PART II   ...................................................................14

   Item 5.  Market for Registrant's Common Stock and Related Stockholder
   Matters, and Issuer Purchases of Equity Securities .......................14

   Item 6.  Selected Financial Data .........................................15

   Item 7.  Management's Discussion and Analysis of Financial Condition and
   Results of Operations ....................................................16

   Item 7A  Quantitative and Qualitative Disclosures About Market Risk ......27

   Item 8.  Financial Statements ............................................27

   Item 9.  Changes in and Disagreements with Accountants on Accounting and
   Financial Disclosure .....................................................27

PART III  ...................................................................27

   Item 10.  Directors and Executive Officers ...............................27

   Item 11.  Executive Compensation .........................................28

   Item 12.  Security Ownership of Certain Beneficial Owners and Management .28

   Item 13.  Certain Relationships and Related Transactions .................28

PART IV  ....................................................................28

   Item 14.  Controls and Procedures.........................................28

   Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K 28

                Consolidated Financial Statements ..........................F-1
                Report of Independent Auditors  ............................F-2
                Consolidated Balance Sheets  ...............................F-3
                Consolidated Statements of Operations  .....................F-5
                Consolidated Statements of Stockholders' Equity  ...........F-6
                Consolidated Statements of Cash Flows  .....................F-7
                Notes to Consolidated Financial Statements .................F-8



                                       i

<PAGE>


                                  Risk Factors

     Some  of  the   information   in  this   Report  on  Form   10-K   contains
forward-looking statements that involve substantial risks and uncertainties. You
can identify these statements by  forward-looking  words such as "may",  "will",
"expect", "anticipate",  "believe", "estimate", and "continue" or similar words.
You should read statements  that contain these words carefully  because they (1)
discuss our future  expectations;  (2) contain projections of our future results
of  operations  or of  our  future  financial  condition;  or  (3)  state  other
"forward-looking"  information.  We believe it is important to  communicate  our
expectations to people that may be interested.  However,  unexpected  events may
arise in the future that we are not able to predict or control. The risk factors
that we describe in this section,  as well as any other  cautionary  language in
this Report on Form 10-K, give examples of the types of  uncertainties  that may
cause our actual  performance  to differ  materially  from the  expectations  we
describe in our forward-looking  statements.  You should know that if the events
described in this section and elsewhere in this Report on Form 10-K occur,  they
could have a material  adverse  effect on our  business,  operating  results and
financial condition.

     Execution  of  Business  Plans.   During  fiscal  2003,  we  developed  and
implemented plans to (i) eliminate, or in the alternative, materially reduce the
operating losses  experienced  during the past several fiscal years, and (ii) to
allow the Company to generate additional cash reserves.  A key component of this
plan has been substantial  collaberative  interaction  between  management,  our
lenders and our key vendors to  understand  and develop  business  processes  to
enhance  operations,  improve  inventory  quality and  assortments  and generate
additional cash flows from operations.  The plan strategy included an aggressive
acceleration of the sell-through of prior year and  discontinued  inventory with
the expected  result being a short-term  adverse effect on average retail prices
and gross profits,  offset by a significant improvement in working capital under
our inventory borrowing base requirements.

     A second major  component of the plan strategy  included a detailed  review
and  assessment of labor  requirements  and operating  policies and  procedures.
Based upon this review,  we  implemented  initiatives  to  significantly  reduce
operating expenses for corporate and store overhead.  The strategy also contains
initiatives in merchandising and several revenue enhancement opportunities.  The
merchandising   strategy  identifies  initiatives  focusing  on  inventory  turn
improvement,  product mix  refinement  and  seasonal  sales  velocity by product
category.  Revenue  opportunities  include  the review and  benchmarking  of all
stores in the areas of parts, service and finance to leverage the best practices
and achievements of our top producing stores.

     Accordingly,  the plan is an  integral  component  in  eliminating  our net
losses and in negotiating  favorable borrowing  agreements,  however there is no
assurance  that our plans will  succeed,  or in the event that they do  succeed,
that they will be sufficient to offset our net losses, improve our cash flows or
assist in securing favorable financing agreements.

     Our  Success  Will Depend on How Well We Manage Our  Inventory  and Product
Growth.  We have  substantially  reduced our inventory  levels and  consolidated
purchases from select manufacturers. We have developed trend analysis models and
utilize  centralized  purchase orders to assist our store management in ordering
new products and in maintaining  appropriate  stocking levels and product turns.
These  procedures were designed to closely regulate and coordinate our inventory
levels, increase inventory turns and improve our liquidity.  Although we believe
that our  systems,  procedures  and controls are adequate to continue to support
this process,  we cannot  assure that this is the case.  Our inability to manage
our  inventory  could  result in a  material  adverse  impact  on our  business,
financial condition and results of operations.

     General Economic  Conditions in the United States and in the Areas Where We
Have Stores Affect Our Sales. Our industry,  like many other retail  industries,
depends on the local,  regional and national economy.  High interest rates, high
fuel prices,  unfavorable economic  developments,  volatility or declines in the
stock market or consumer  confidence  levels,  fears over  terrorism or possible
military deployments,  changes to the tax law such as the imposition of a luxury
tax or (with respect to a specific region) a major employer's decision to reduce
its workforce can all  significantly  decrease the amount of money consumers are
willing  to spend on  discretionary  activities.  When these  situations  arise,
consumers often decide not to purchase relatively expensive, "luxury" items like
recreational  boats.  For example,  our Company's  sales levels declined and our


                                       1
<PAGE>

Company  recorded  significant net losses during the 2001-2003 fiscal years due,
in part, to the United States  experiencing  weak economic  conditions  (such as
rising  unemployment  levels,  reduced  consumer  confidence  and volatile stock
markets).  From 1988 to 1990, our business also suffered dramatically because of
the declines in the financial,  oil and gas and real estate markets in Texas. If
the current economic downturn  continues or if similar downturns in the national
or in local economies arise in the future, we may suffer significant  additional
operating losses.

     Changes in federal and state tax laws,  such as the imposition of luxury or
excise taxes on new boat purchases also could influence  consumers' decisions to
purchase  products  we sell and could have a negative  effect on our sales.  For
example, during 1991 and 1992 the federal government imposed a luxury tax on new
recreational  boats with sales  prices in excess of  $100,000.  This  luxury tax
coincided  with a sharp  decline in boating  industry  sales during the 1991 and
1992 periods. Any of these experiences would likely result in a material adverse
effect on our business, our operating results and our financial condition.

     We Depend on Strong Sales in the First Half of the Year. Our business,  and
the recreational  boating industry in general,  is very seasonal.  Our strongest
sales period has historically begun in January, because many boat and recreation
shows are held in that month.  In the past,  strong sales  demand has  continued
from January through the summer months. Of our average annual net sales over the
last three fiscal  years,  over 27% occurred in the quarter  ending March 31 and
over 37% occurred in the quarter ending June 30. With the exception of our store
locations in Florida, our sales are generally significantly lower in the quarter
ending  December  31.  Because the overall  sales levels (in most stores) in the
December  quarter  are much less than in the  months  with  warmer  weather,  we
generally have a substantial  operating loss in the quarter ending  December 31.
Because of the  historical  difference  in sales  levels in the warm  spring and
summer  months,  versus  the cold fall and  winter  months,  if our sales in the
months  of  January  through  June are weak as a result of  lackluster  consumer
demand,  timing of boat shows,  bad weather or lack of  inventory we will likely
suffer  significant  operating losses.  This experience would likely result in a
material adverse effect on our business, our operating results and our financial
condition. (See Risk Factors - "Our Sales Depend on Good Weather")

     Our Sales Depend on Good  Weather.  Our business  also depends on favorable
weather  conditions.  For example,  too much or too little rain, either of which
may result in dangerous or  inconvenient  boating  conditions,  can force lakes,
rivers or other boating areas to close for safety issues and severely  limit our
sales. A long winter can also shorten our selling  season.  Hurricanes and other
storms could result in the  disruption of our  operations or result in damage to
our  inventories  and  facilities.  Bad  weather  conditions  in the  future may
decrease  customer demand for our boats,  which may decrease our sales and would
likely  result in a  material  adverse  effect on our  business,  our  operating
results and our financial condition.

     Our  Insurance May Not  Reimburse Us for Certain  Damage or  Disasters.  We
purchase insurance for storm damage and other risk events, but (i) the amount of
insurance  purchased,  and (ii) the  coverage  we  purchase  or are  eligible to
purchase, may not repay us for all weather related damages or disruptions to our
sales levels or store  operations.  Also,  deductible levels available to us may
result in large out of  pocket  expenses  prior to us  obtaining  any  available
insurance coverages. Our store locations in FEMA Flood Zones have certain limits
on insurance coverage on inventory damages resulting from floods or rising water
since FEMA  policies do not provide  coverage  for  inventory  that is stored or
located outdoors.  Consequently, we must relocate inventory from these locations
in the event of hurricanes or other storms. In the event that we are not able to
secure adequate  insurance  coverage or if we suffer losses that are not covered
by our  insurance  policies  it may lead to a  material  adverse  effect  on our
business, our operating results and our financial condition.

     We Have Reduced our Store Count by Closing Store Locations.  We have closed
a total of 7 store locations in fiscal 2003 and 2002 because the store locations
had low  sales  volumes  and  were  not  profitable  to  operate.  We may  close
additional  store locations (i) that are not profitable,  (ii) that are not able
to reach our  desired  level of sales or  profits,  or (iii) to reduce  our cash
expenditures.  Inventory  from closed store  locations is  transferred  to other
nearby stores that we operate. The expenses of transferring and disposing of the
inventory and other assets from closed store locations is an additional  expense
to us and may lead to a material  adverse effect on our business,  our operating
results and our financial condition.


                                       2
<PAGE>

     Our Substantial Indebtedness Could Restrict Our Operations and Make Us More
Vulnerable to Adverse Economic Conditions. We have had and will continue to have
a significant  amount of  indebtedness.  Our general  working  capital needs and
borrowing agreement covenants (such as maximum debt/worth ratios and minimum net
worth  levels)  may require us to secure  significant  additional  capital.  Any
borrowings to finance future working capital requirements,  capital expenditures
or  acquisitions  could make us more  vulnerable to a sustained  downturn in our
operating results,  a sustained downturn in economic  conditions or increases in
interest rates on portions of our debt that have variable interest rates.

     Our ability to make payments on our indebtedness  depends on our ability to
generate  cash  flow  in the  future.  If  our  cash  flow  from  operations  is
insufficient to meet our debt service or working capital requirements,  we could
be  required  to sell  additional  equity  or  debt  securities,  refinance  our
obligations or dispose of assets in order to meet our debt service requirements.
Adequate  financing  may not be  available  if and when we need it or may not be
available on terms acceptable to us. Our failure to achieve  required  financial
and  other  covenants  in  our  borrowing  agreements  or to  obtain  sufficient
financing on favorable terms and conditions could have a material adverse effect
on our business, financial condition and results of operations and prospects.

     Our Suppliers  Could Increase the Prices They Charge Us or Could Decide Not
Sell to Us. We have entered into dealer  agreements with our key  manufacturers.
Most of these agreements are renewable each year, are  non-exclusive and contain
other conditions that are standard in the industry.  Because of our relationship
with these  manufacturers and the significant amount of product we purchase,  we
receive  volume  price  discounts  and  other  favorable  terms;   however,  the
manufacturers may change the prices they charge us for any reason at any time or
could  decide  not to sell  their  products  to us. A change  in  manufacturer's
prices,  their  decisions  not to sell to us or changes in industry  regulations
could have a material adverse effect on our business,  financial  conditions and
results of  operations.  (See Risk Factors - "We Have Reduced our Store Count by
Closing Store  Locations and Risk Factors - We Rely on a Few  Manufacturers  for
Almost All of our Boat Purchases.)

     We Rely on a Few  Manufacturers  for Almost All of our Boat Purchases.  Our
success depends to a significant  extent on the continued quality and popularity
of the products we sell. We have also  historically  purchased  much of our boat
inventory from a few select  manufacturers.  For example, in fiscal year 2003 we
purchased  25.0%,  and in  fiscal  year  2002 we  purchased  35.6% of our  total
inventory from Genmar Industries, Inc., or "Genmar". We have elected to purchase
a  significant  amount of product from an affiliate of our largest  shareholder,
TMRC, LLP ("Tracker").  In fiscal 2003 we purchased  approximately $10.9 million
or 15.6% of our  inventory  from  Tracker.  Beginning  with fiscal 2004, we have
consolidated purchases from certain vendors to Tracker and anticipate purchasing
approximately  30% to 40% of our fiscal 2004 inventory supply from Tracker.  The
purchases of boats from this  supplier  are based on the volume price  discounts
and other terms of various,  primarily  annual,  agreements.  In addition to our
purchases  from GenMar and Tracker,  we also  purchase a large amount of product
from several smaller manufacturers and believe that our purchase quantities from
these vendors  represent a significant  percentage  of their  respective  annual
production.

     If our sales  increase,  our key  manufacturers  may need to increase their
production  or we may need to locate  other  sources to purchase  boats or other
products we sell. If our suppliers are unable to produce more inventory,  decide
not to renew their  contracts with us or decide to stop production and we cannot
find  alternative  inventory  suppliers at similar quality and prices,  we would
experience inventory shortfalls which, if severe enough, could cause significant
disruptions  and  delays  in  our  sales  and,  therefore,  harm  our  financial
condition. In addition, the timing,  structure, and amount of manufacturer sales
incentives could impact the timing and profitability of our sales.

     If Our Products are Defective,  We Could be Sued.  Because we sell, service
and custom package boats, motors and other boating equipment,  we may be exposed
to lawsuits for personal  injury and property  damage if any of our products are
defective,  cause personal injuries or result in property damage.  Manufacturers
that we purchase products from generally  maintain product and general liability
insurance and we carry third party product liability insurance.  We have avoided
any significant  liability for these risks in the past.  However, if a situation
arises in which a claim is not covered under our insurance  policy or is covered
under our policy but exceeds the policy limits,  it could have a significant and
material  adverse  effect  on our  business,  operating  results  and  financial
condition. (see Risk Factors - "We Rely on a few Manufacturers for Almost All of
our Boat Purchases".)


                                       3
<PAGE>

     Certain Laws and Contracts May Keep Us From Entering New Markets or Selling
New Products.  We may be required to obtain the permission of  manufacturers  to
sell  their  product  before  we enter  new  markets  or  before  we sell new or
competitive  products in our existing markets.  If our manufacturers do not give
us  permission  to sell their  products  in markets  where we operate or plan to
operate,  we may be forced to find alternative  supply sources or to abandon our
plan.  Besides  these   manufacturers'   restrictions,   there  are  also  legal
restrictions  on our  business.  For example,  the state of Oklahoma has adopted
laws that restrict the locations of competing boat dealers. While these types of
laws are not common,  they could have a  significant  effect on our  industry if
other states pass similar restrictions.

     We May Not Be Able To Respond Effectively To The Significant Competition We
Face. We operate in very competitive conditions.  We must compete generally with
other businesses  trying to sell  discretionary  consumer products and also face
intense competition from other recreational boat dealers for customers,  quality
products,  store locations and boat show space. We rely heavily on boat shows to
generate  sales.  If we are limited in or prevented from  participating  in boat
shows, it could have a negative effect on our business,  financial condition and
results of operations.

     Within our  industry,  our  competitors  include many single  location boat
dealers and several  large  dealer  groups.  We compete  based on the quality of
available products, the price and value of the products we sell and our customer
service.  To a lesser  extent,  we also compete with national  specialty  marine
stores, catalog retailers,  sporting good stores and mass merchants,  especially
with respect to parts and accessories.  We face  significant  competition in the
markets where we currently operate and the areas  surrounding those markets.  We
believe that the trend in the boating  industry is for  manufacturers to include
more  features as  standard  equipment  on boats,  to offer  greater  rebates or
subsidies  and for other  dealers  to offer  packages  comparable  to our Travis
Edition  boat  packages.  Some of our  competitors,  especially  those that sell
yachts or boating  accessories,  are large national or regional  chains that may
have substantially greater financial,  marketing and other resources than we do.
We cannot give any assurances that we will be able to effectively compete in the
retail boating industry in the future.

     Our Income from Financing,  Insurance and Extended  Service  Contracts,  Is
Dependent  On  Third  Party  Lenders  and  Insurance  Companies.  We  receive  a
substantial  amount of our income  from the fees we receive  from  banks,  other
lending  companies,  insurance  companies and vendors providing extended service
contracts.  We call this type of income  Finance and  Insurance  income,  or F&I
income. If our customers desire to borrow money to finance the purchase of their
boat,  we help the customers  obtain the financing by referring  them to certain
banks that have offered to provide financing for boat purchases. The lender pays
a fee to our  company for each loan that they are able to provide as a result of
our customer referral.

     When we sell boats we also offer our customers the  opportunity to purchase
(i) a Service  Contract that  generally  provides up to four years of additional
warranty  coverage  on their  boat's  motor  after the  manufacturer's  original
warranty expires, and (ii) various types of insurance policies that will provide
money  to pay a  customer's  boat  loan if the  customer  dies or is  physically
disabled.  We sell these  products  as a broker  for  unrelated  companies  that
specialize in these types of issues, and we are paid a fee for each product that
we sell.  Since we only  broker  these  products  on behalf of  unrelated  third
parties,  our  responsibility  and financial  risk for paying claims or expenses
that are eligible to be insured by these  Service  Contracts or other  insurance
policies is limited.

     F&I  income  was 3.4% and 2.9% of our net  sales in fiscal  years  2003 and
2002,  respectively.  This  arrangement  carries several  potential  risks.  For
example,  the  lenders we arrange  financing  through  may decide to lend to our
customers directly rather than to work through us. If the customer goes directly
to the bank to apply for a loan to  purchase  their boat we would not  receive a
fee for referral. Second, the lenders we currently refer customers to may change
the amount of fees paid or the criteria they use to make loan  decisions,  which
could reduce the number of customers that we can refer.  Also, our customers may
use the Internet or other electronic methods to find financing alternatives.  If
either of these events occur, we would lose a significant  portion of our income
and profit. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

     Our Income Tax Refunds are Currently Limited. Our federal income tax return
for the 12 months ended December 30, 2002 fully exhausted all available  refunds


                                       4
<PAGE>

of federal income taxes previously paid by our Company.  Accordingly,  beginning
with the quarter ending March 31, 2003, we did not recognize income tax benefits
on our books from operating  losses,  due to  uncertainties  associated with the
utilization of the operating loss  carry-forwards  in future  periods.  Since we
utilized prior tax refunds for operating  capital,  our inability to continue to
receive  tax  refunds  could have a  material  adverse  effect on our  business,
financial condition and results of operations.

     We May Issue  Securities  That Will  Dilute Our  Current  Shareholders  and
Impact  our  Earnings  Per  Share.   On  December  14,  2001,  we  entered  into
Subordinated  Convertible loan transactions totaling $4.3 million. The loans are
unsecured  with a term of 36 months and accrue  interest at 10.75%,  fixed.  The
principal and interest  amounts  payable on the loans is  subordinated,  in most
circumstances,  to our  borrowing  agreements  with certain of our lenders.  The
loans may be repaid by the Company,  and if we do not redeem the loans, they can
be  converted  by the holders  into shares of our common  stock at a  conversion
price of approximately $2.46 per share.

     On March 13, 2002, we entered into an agreement  whereby Tracker  purchased
80,000  shares of newly  created 6% Series A  Cumulative  Convertible  Preferred
Stock (the "Preferred  Stock") in the Company.  The issue price of the Preferred
Stock was $100 per share. Each share can be converted into our common stock at a
conversion price of approximately $2.46 per share.  Tracker paid us $8.0 million
in the aggregate to purchase 80,000 shares of the Preferred  Stock. We used $5.0
million for general working capital  purposes and we used $3.0 million to prepay
portions of the  subordinated  convertible  loans as required by Tracker.  If we
raise additional equity capital or finance future working capital  requirements,
in whole or in part,  through the  issuance of  additional  common stock or debt
instruments  convertible into our common stock, our existing  shareholders would
experience  dilution  and our  earnings  per share would also be impacted by the
issuance of additional shares of capital stock.  Also, certain provisions in our
(i) Preferred Stock agreements and (ii)  Subordinated  Convertible loans require
us to issue additional shares or reduce the conversion price of the shares to be
issued in the event that we offer shares in another transaction at a lower price
or with more favorable terms.

     If We Issue More Stock,  Our Stock Price May  Decline.  The sale of a large
number of shares of our common stock in the public  market could have a material
adverse effect on the market price of our common stock.  As of January 17, 2003,
we own or control,  together  with our  officers  and  directors,  approximately
862,778  shares,  or  approximately  20%, of our issued and  outstanding  common
stock.

     As of December 31,  2003,  Tracker  owns or controls  approximately  80,000
shares  of our  Series A  preferred  Stock and  controls  the  voting  rights to
approximately  an  additional  829,708  shares of common  stock.  The  shares of
Preferred  Stock owned by Tracker may be converted into 3,252,826  shares of our
common  stock.  In  this  event,   the  ownership  of  Tracker  would  represent
approximately  53% of our issued and  outstanding  common shares  (excluding the
effect of options outstanding or other contingently issuable shares).

     The sale by the Company or Tracker of a large  portion of these  shares may
decrease  the  price of our  common  stock.  (See  Risk  Factors - "We May Issue
Additional  Securities That Will Dilute Our Current  Shareholders and Impact our
Earnings Per Share" and "Change of Control").

     We Must Comply With Listing  Requirements  for the NASDAQ Stock Market.  We
transferred our common stock from the Nasdaq National Market to the Nasdaq Small
Cap Market  effective  October 25, 2002. We requested  the transfer  because our
Company  did not comply with all of the  requirements  for trading on the Nasdaq
National Market. The Nasdaq Small Cap Market requires that we maintain a minimum
$1.00 bid price on our common  shares.  During  fiscal 2003 the bid price on our
common stock ranged from $.18 to $1.46.  Our  inability to maintain the required
share price  range or other  requirements  for  trading on the Nasdaq  Small Cap
Market  could  result in our common  stock being  delisted  and not eligible for
trading on the Nasdaq Stock Market.  Since we rely on the Nasdaq Stock Market to
offer trading of our common stock, our inability to continue on the Nasdaq Stock
Market  could  have  a  material  adverse  effect  on  our  business,  financial
condition,  the  price of our  common  stock and the  ability  of  investors  to
purchase or sell our common  stock.  (See Risk Factors - "Our Stock Price May be
Volatile").

     Change of  Control.  As of January 7, 2003,  Tracker,  pursuant  to certain
agreements for assistance in financing and other matters (the  "Agreements") has
assumed  effective  control of the  Company.  Tracker has the right to designate


                                       5
<PAGE>

four of seven members of the Company's Board of Directors. Tracker currently has
two representatives on the Board of Directors pursuant to Tracker's ownership of
80,000  shares  of the  Company's  Series  A  Preferred  Stock,  and has not yet
designated two additional representatives.

     Prior to the Agreements,  pursuant to its holding 80,000 shares of Series A
Preferred  Stock,  Tracker  beneficially  owned  approximately  43% or 3,252,825
shares of the Company's common stock on a fully-diluted,  as-converted basis. As
a result of the Agreements,  Tracker now has voting control of approximately 57%
or 4,611,119 shares on a fully-diluted,  as-converted basis. This voting control
was obtained  through a proxy granted by an insider  covering  202,643 shares of
common  stock and through the creation of a  newly-formed  voting  trust,  to be
controlled by a trustee designated by Tracker (the "Voting Trust"). Deposited in
the  Voting  Trust  are  all of the  securities  held  by  Tracker  and  insider
shareholders Robert Siddons (former director), owner of 292,866 shares, and Mark
Walton  (President),  owner of 334,200  shares.  The term of the Voting Trust is
five years, but is subject to earlier  termination if Tracker  otherwise becomes
the holder of 55% or more of the common stock of our Company on a fully-diluted,
as-converted  basis  (although  Tracker  currently  controls over 55% the Voting
Trust has not been  modified).  The  existence or expiration of the Voting Trust
does not restrict  Tracker's ability to acquire additional shares of the Company
from third  parties nor of the insiders to sell such shares  subject to terms of
the Voting Trust.  This change in the voting control of our Company could result
in changes (i) in the management,  operations or direction of our Company,  (ii)
the type of inventory  products stocked or the  presentation of the product,  or
(iii) numerous other aspects of our operation or Travis Edition product line.

     In order to ensure that Tracker maintains its voting control position, each
Company  insider who  purchased  Convertible  Notes from our Company on or about
December 14, 2001 (at a  conversion  price of  approximately  $2.46 per share of
common  stock)  also has agreed  not to convert  such notes at any time prior to
November  15,  2004,  and that any shares that may be acquired  upon  conversion
prior to such date shall be deposited into and governed by the Voting Trust.

     Our Management  Team or Direction of Operations may Change.  As a result of
the Change of Control  effective  January 7, 2003,  outlined above,  Tracker has
assumed  effective  control of the Company.  There is no assurance  that Tracker
will retain the current  management or officers of the Company.  A change in the
management  or  officers  of our  Company  could  result in  changes  (i) in the
management  style or  direction  of our  Company,  (ii)  the  type of  inventory
products  stocked or the  presentation  of the product,  or (iii) numerous other
aspects of our operation or Travis  Edition  product  line.  (See Risk Factors -
"Change of Control").

     We have  purchased  and are  the  beneficiary  of  key-man  life  insurance
policies on our President,  Mr. Walton,  and our Chief  Financial  Officer,  Mr.
Perrine in the amount of $1,000,000, each. However, if any of these employees or
other key employees died, became disabled or left Travis Boats for other reasons
and were not replaced with individuals of similar or greater  experience levels,
their loss could have a significant  negative  effect on our  operations and our
financial performance.

     Our Stock  Price May be  Volatile.  The  price of our  common  stock may be
highly  volatile for several  reasons.  First, a limited number of shares of our
stock are owned by the public.  This may effect trading patterns which generally
occur  when a  greater  number of  shares  are  traded.  Second,  the  quarterly
variations in our operating results, as discussed previously,  may result in the
increase or decrease of our stock price. Third,  independent parties may release
information  regarding  pending  legislation,  analysts'  estimates  or  general
economic  or market  conditions  that effect the price of our stock.  Also,  our
stock price may be effected by the demand and the overall market  performance of
small  capitalization  stocks.  Any of these  situations  may have a significant
effect on the  price of our  common  stock or our  ability  to raise  additional
equity.  (See  Risk  Factors - "If We Issue  More  Stock,  Our  Stock  Price May
Decline.";  Risk Factors - "We May Issue Securities That Will Dilute Our Current
Shareholders and Impact our Earnings Per Share."; Risk Factors - "We Must Comply
With  Listing  Requirements  for the NASDAQ  Stock  Market."  and  "Management's
Discussion and Analysis of Financial Condition and Results of Operations.")

     Our  Corporate  Documents May Prevent or Inhibit a Takeover of the Company.
Our  Articles  of  Incorporation  permit us to issue up to  1,000,000  shares of
preferred  stock,  either all at once or in a series of issuances.  Our Board of
Directors has the power to set the terms of this  preferred  stock.  We recently
issued  80,000  shares  of  Series A  preferred  stock to  Tracker.  If we issue


                                       6
<PAGE>

additional preferred stock, it could delay or prevent a change in control of the
company.  Also, our Articles of  Incorporation  permit the Board of Directors to
determine  the  number of  directors  and do not  specify a maximum  or  minimum
number. Our Bylaws currently provide that the Board of Directors is divided into
three classes with  staggered  terms,  however one class is currently set at two
(2)  individuals  and these board  positions have been granted to the holders of
the Series A preferred  stock (Tracker) for so long as at least 25,000 shares of
preferred  stock  remain  outstanding.  Additionally,  under  the  terms  of the
Agreements,  Tracker now has the right to designate four of seven members of the
Company's  Board of  Directors.  Tracker,  as holder of the  Series A  Preferred
Stock, currently has two representatives on the Board of Directors,  and has not
yet designated two additional representatives.  (See Risk Factors - "If We Issue
More Stock,  Our Stock Price May Decline" and "We May Issue Securities That Will
Dilute Our Current Shareholders and Impact our Earnings Per Share.")

                                     PART I

Some of the  information  in this Report on Form 10-K,  including  statements in
"Item 1.  Business",  and  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations"  contain  forward-looking  statements  that
involve  substantial risks and uncertainties.  You can identify these statements
by  forward-looking  words  such  as  "may",  "will",  "expect",   "anticipate",
"believe",  "estimate",  and  "continue"  or  similar  words.  You  should  read
statements  that  contain  these words  carefully  because  they (1) discuss our
future expectations; (2) contain projections of our future results of operations
or  of  our  future  financial  condition;  (3)  state  other  "forward-looking"
information.  We believe it is  important to  communicate  our  expectations  to
people  that may be  interested.  However,  unexpected  events  may arise in the
future that we are not able to predict or control.  Among the factors that could
cause actual results to differ  materially  are:  general  economic  conditions,
competition and government  regulations,  as well as the risks and uncertainties
discussed in this Report on Form 10-K, and the uncertainties set forth from time
to time in the Company's  other public reports,  filings and public  statements.
All  forward-looking  statements  in this  Report  on Form  10-K  are  expressly
qualified in their entirety by the cautionary statements in this paragraph.

Item 1.  Business

     General - Travis Boats & Motors,  Inc.  ("Travis  Boats",  the "Company" or
"we") is a  leading  multi-state  superstore  retailer  of  recreational  boats,
motors,  trailers and related marine  accessories in the southern United States.
Our Company currently operates 30 stores under the name Travis Boating Center in
Texas (8), Arkansas (2), Louisiana (4), Alabama (1), Tennessee (3),  Mississippi
(1), Florida (9), Georgia (1) and Oklahoma (1).

     We seek to differentiate  ourselves from competitors by providing customers
a unique superstore shopping experience that showcases a broad selection of high
quality boats, motors,  trailers and related marine accessories at firm, clearly
posted low prices.  Each superstore also offers  complete  customer  service and
support,   including  in-house   financing  programs  and  full-service   repair
facilities staffed by factory-trained mechanics.

     History - Travis Boats was incorporated as a Texas  corporation in 1979. As
used herein and unless  otherwise  required by the  context,  the terms  "Travis
Boats",  the "Company"  and "we" shall mean Travis Boats & Motors,  Inc. and its
direct and indirect subsidiaries.

     Since our founding in 1979 as a single  retail store in Austin,  Texas,  we
have grown both through  acquisitions  and the opening of new  "start-up"  store
locations. During the 1980s, we expanded into San Antonio, Texas, purchased land
and built a new  store  facility.  After  this,  we  purchased  additional  boat
retailers  that  operated  stores in the Texas  markets of  Midland,  Dallas and
Abilene.  It was  during  this  early  period  of  store  growth  that we  began
developing  the  systems  necessary  to  manage  a  multi-store   operation  and
maximizing our inventory  purchases to obtain  increased volume  discounts.  Our
success  in  operating  numerous  stores  and  maximizing  volume  discounts  on
inventory  purchases  led to the  introduction  of our  own  proprietary  Travis
Edition  packaging  concept and our philosophy of clearly posting price signs on
each of our Travis Edition boats held for sale.


                                       7
<PAGE>

     We sell  approximately  75  different  types of  Travis  Edition  models of
brand-name fishing,  water-skiing and general recreational boats, such as family
ski boats,  off-shore  fishing boats,  personal  watercraft,  cabin cruisers and
yachts up to  approximately  50 feet in length.  We also sell motors,  trailers,
accessories  and  related  equipment.  Although we sell  pleasure  boats at many
different  retail  prices,  we  attempt  to price  our  product  to  maintain  a
consistent  gross profit  percentage for each of our Travis Edition models.  See
"Business Strategy - Travis Edition Concept."

     We study  sales  trends from the cities and states  where we operate  store
locations.  We  use  the  information  from  this  data  to  custom  design  and
pre-package  combinations of popular  brand-name  boats,  such as Mako,  Cobalt,
Ranger, Caravelle, Bayliner, Fisher, ProCraft, Fishmaster, Sea Pro and Starcraft
with outboard motors generally  manufactured by Suzuki or Brunswick Corporation,
along with trailers and numerous  accessories,  under our own proprietary Travis
Edition label.  These signature Travis Edition  packages,  which account for the
vast  majority of total new boat sales,  have been  designed  and  developed  in
coordination with the manufacturers  and often include  distinguishing  features
and  accessories  that  have  historically  been  unavailable  to,  or listed as
optional,  by many of our  competitors.  We also sell  small  cruisers,  such as
Crownline,  that range in length to over 25 feet in length.  By  providing  many
different  types of boats with many types of  standard  features,  we attempt to
offer the customer an exceptional boat at a competitive  price that is ready for
immediate use and enjoyment.

     We believe that our Company  offers a selection of boat,  motor and trailer
packages  that fall within the price range of the majority of all boats,  motors
and  trailers  sold in the  United  States.  Our  Travis  Edition  product  line
generally  consists  of  boat  packages  priced  from  $7,500  to  $75,000  with
approximate even distribution  within this price range. Our management  believes
that by  combining  flexible  financing  arrangements  with many  types of boats
having broad price ranges,  that we are able to offer boat packages to customers
with different purchasing budgets and varying income levels.

     Business Strategy - We have developed a multi-state, superstore strategy to
offer for sale a wide  selection of  recreational  boats and  accessories  . Our
objective  is to  establish  our  Company as one of the  dominant  retailers  of
recreational  boats,  motors,  trailers and marine  accessories  in the southern
United States.  Therefore,  our strategy  includes  increasing  customer service
levels,  market share  penetration  and sales at existing  store  locations  and
possibly further  expansion of the number and size of our store locations in the
southern  United  States while also  maintaining  a focus on possible  cities in
other  regions.  Our  merchandising  strategy is based on  offering  customers a
comprehensive  selection of quality,  brand name boats and boating products in a
comfortable  superstore  environment.  We  intend  to  continue  to build  brand
identity  by  placing  our  Travis  Edition  name on the many  types of  boating
packages that we sell. We also use  advertising,  open houses,  our web site and
other types of marketing  events to increase our name recognition and our market
share.

     Our  business  operations  emphasize  the  following  key  elements  of our
business strategy:

     Travis  Boating  Center  superstore.   Travis  Boating  Center  superstores
generally  have a distinctive  and stylish  trade dress  accented with deep blue
awnings,  a nautical neon building  decoration,  expansive glass storefronts and
brightly  lit  interiors.   Management  estimates  the  average  store  size  at
approximately  21,000  square  feet and  located  on 3 - 5 acres  of  land.  The
superstore  locations  present  customers  with a broad array of boats and often
over  9,000  parts and  accessories  in a clean,  well-stocked,  air-conditioned
shopping environment. All boats are typically displayed fully rigged with motor,
trailer and a complete  accessory package allowing for the customer's  immediate
purchase and enjoyment.  Professionally-trained  mechanics operate service bays,
providing customers with complete maintenance and repair services.

     Travis  Edition  concept.  We gather  and use  extensive  market  research,
combined with the design resources of our  manufacturers,  to develop our custom
Travis Edition boating packages. Our significant purchasing power and consequent
ability to coordinate  designs with our  manufacturers  has enabled us to obtain
products directly from the factory at low prices,  along with favorable delivery
schedules  and  with   distinguishing   features  and   accessories   that  have
historically been unavailable to, or listed as optional by many competitors.  At
our store locations we often also add certain additional  features after receipt
of the product to enhance our Travis Edition packages.  Each Travis Edition is a
complete,  full-feature package, including the boat, motor, trailer and numerous
additional  accessories  and  design  features  often not found on  competitors'


                                       8
<PAGE>

products, thus providing our customers with superior value. These features often
may include  enhanced  styling  such as  additional  exterior  colors,  complete
instrumentation  in  dashboards,  transoms  warrantied  for life,  canopy  tops,
trolling motors, upgraded interiors with stereos, wood grain dashboards, in-dash
depth  finders,  stainless  steel motor  propellers and enhanced hull design not
available on other models.  Our Travis Edition boats are often identified by the
Company's   attractive   private   label  logo,   as  well  as  the   respective
manufacturer's logo.

     Unlike most recreational  boat dealers,  we place firm sales prices on each
of our Travis  Edition  packages and generally  maintain that same price for the
entire model year. These prices are advertised and clearly posted on each of our
boats so that the customer receives the same price at any Travis Boating Center.
We believe this selling  philosophy  reduces  customer  anxiety  associated with
bargaining or negotiation  and offers our  customer's  prices at or below prices
that they  generally  might receive from our  competitors.  We also believe this
pricing  strategy and  low-pressure  sales style  provides the customer with the
comfort and confidence of having  received a better boat with more features at a
lower price than may have been  obtained  through  negotiations  at  competitive
stores.  Our  management  believes  this  approach  has promoted  good  customer
relationships  and enhanced our reputation in the industry as a leading provider
of quality and value.

     Acquisitions.  We did not complete any  acquisitions  in fiscal years 2003,
2002 or 2001.

     Boat Show  Participation.  We also  participate  in  numerous  boat  shows,
typically  held in January  through  March,  in each of the  markets in which we
operate and in certain other  markets near our stores.  These shows are normally
held at convention centers or at on-the-water  locations,  with all area dealers
purchasing space to display their respective product offerings.  We believe that
boat  shows  and other  offsite  promotions  generate  a  significant  amount of
interest in our Travis  Edition  products and often have an immediate  impact on
sales at a  nominal  incremental  cost.  Although  total  boat  show  sales  are
difficult to assess,  management  attributes a significant portion of the second
fiscal quarter's net sales to such shows.

     F&I Products. In addition to our Travis Edition boat packages, we offer our
customers  the ability to purchase  extended  service  contracts  and  insurance
coverages, including credit life and accident/disability coverages (collectively
"F&I Products").  The extended service contracts provide customers with coverage
for mechanical engine breakdown for a period (usually 36 or 48 months) beginning
after  the  stated  warranty  term of the  original  manufacturer  expires.  The
insurance coverages provide the customer with funds to repay a portion or all of
their boat loan in the event of death, disability or other covered event.

     Since we have business  relationships  with numerous  financial  lenders we
also  offer to assist  our  customers  in  obtaining  financing  for their  boat
purchase.  If the customer  purchases F&I Products or utilizes financing we have
helped arrange,  we earn commissions based upon our total volume of sales or the
amount of mark-up we charge over the cost of the products.  F&I Products account
for a substantial  portion of the our income, the most significant  component of
which is the income  resulting  from fees  earned  assisting  our  customers  in
obtaining  financing  for  their  purchases.  Each of the F&I  Products  and the
financial  assistance  is  done on  behalf  of  unrelated  third  parties  which
generally include large financial institutions and insurance companies.

Operations

     Purchasing.  We are also among the largest  domestic  volume buyer of boats
from many of the boat  manufacturers  that we  represent.  As a result,  we have
built close  relationships with many of our manufacturers.  These  relationships
have allowed us to have  substantial  input into the design  process for the new
boats that are introduced in our markets each year by these manufacturers.  This
design input and coordination  with our manufacturers is a primary factor in the
pricing,  selection  and types of the Travis  Edition  boating  packages that we
offer for sale in our store locations.

     We  typically   deal  with  each  of  our   manufacturers   pursuant  to  a
non-exclusive dealer agreement.  These dealer agreements are usually for one (1)
year in term  and they  typically  do not  contain  any  contractual  provisions
concerning product pricing or purchasing levels. The wholesale prices charged to


                                       9
<PAGE>

us by our  manufacturers  are  generally set each year for the entire model year
(usually  summer to  summer),  but may be  changed  at the  manufacturer's  sole
discretion.  However, historically we have had multi-year agreements to purchase
boats with Genmar Industries,  Inc. most of which expired without renewal by the
Company or GenMar in the 2003 fiscal year.

     Approximately 25.0% and 35.6% of our net purchases in fiscal years 2003 and
2002,  respectively,  were products  manufactured by boat manufacturers owned by
Genmar. The significant amount of purchases from Genmar was primarily related to
the store locations that we operate in Florida which sell Genmar's Wellcraft and
Carver  products.  Other  Genmar boat lines that we have  purchased  include the
brands Larson, AquaSport, Scarab and Ranger.

     We also entered into a multi-year  agreement  with a subsidiary  of Tracker
during fiscal 2002 to purchase  certain  types of boats.  During fiscal 2002 and
2003,  we  purchased  approximately  3.6% and 15.6% of our annual net  inventory
purchases  from  Tracker.  Beginning  with  fiscal  2004,  we have  consolidated
purchases  from  certain  vendors  to  Tracker  and  anticipate   purchasing  up
approximately 30% to 40% of our fiscal 2004 inventory supply from Tracker.

     The agreements with each  manufacturer  generally  include volume discounts
from the  then  prevailing  dealer  base  price  over  the  entire  term of each
respective  agreement.  Although these dealer agreements have varying expiration
dates,  each  agreement  generally  may be canceled by either  party for various
reasons  including  our failure to  purchase a certain  amount of product or the
failure  by the  manufacturer  to provide a certain  amount of  product  that we
desire to purchase.

     The  Company's  right to display,  advertise or sell some product  lines in
certain markets,  including the Internet, may be restricted by arrangements with
certain  manufacturers.  (See Risk Factors - "We Rely on a Few Manufacturers for
Almost All of our Boat Purchases").

     Floor plan financing.  We purchase most of our inventory by borrowing money
on our floor plan and other  borrowing  agreements.  The seasonal  nature of the
recreational   boating  industry   impacts  the  production   schedules  of  the
manufacturers  that produce marine products.  During the fall and winter months,
retail sales of recreational  boats diminish  significantly as compared to sales
during the warm  spring  and summer  months.  To  provide  recreational  boating
retailers, such as Travis Boats, extra incentive to purchase boating products in
the "off-season," manufacturers typically offer product for sale at a price that
includes an  interest  subsidy or other  discount.  Since  retail  boat  dealers
typically  utilize  floor plan  financing to provide the working  capital  funds
needed to purchase  inventory,  the  interest  subsidy is intended to assist the
retail dealer in stocking the product until the selling season. The terms of the
interest  subsidy  or  assistance  vary  by  manufacturer,  with  virtually  all
manufacturers in the marine industry offering such programs. Management believes
that the types of  financing  arrangements  we utilize are  standard  within the
industry.   As  of  September  30,  2003,  the  Company  owed  an  aggregate  of
approximately  $28.7  million  to our  lenders  under our floor  plan  financing
agreements. At September 30, 2003 and 2002, the Company had non-interest bearing
borrowings of approximately $2,520,000 and $5,370,000 under these arrangements.

     Competition. We operate in a highly competitive environment. In addition to
facing  competition  generally  from many  other  businesses  seeking to attract
discretionary  spending dollars, the recreational boat industry itself is highly
fragmented,  resulting in intense  competition for customers,  access to quality
products,  access to boat show space in new markets and access to suitable store
locations.  Our Company relies heavily on boat shows to generate sales.  If, for
any  reason,  we were  unable to  participate  in boat shows in our  existing or
targeted  markets,  it could have a  material  adverse  effect on our  business,
financial condition and results of operations.

     Our primary competition is from boat dealers operating a single location or
several  locations  in a single  state and, to a lesser  degree,  with  national
specialty  marine  stores,  catalog  retailers,  sporting  goods stores and mass
merchants,   particularly   with  respect  to  parts  and  accessories.   Dealer
competition,  which includes one other publicly traded  multi-state  retailer of
recreational  boats,  continues  to increase  based on the quality of  available
products, the price and value of the products and heightened attention levels to
customer  service.  There is  significant  competition  both  within  markets we
currently serve and in surrounding  markets.  While we generally compete in each
of our markets with retailers of brands of boats not sold by the Company in that


                                       10
<PAGE>

market, it is common for other competitive  retailers to sell the same brands of
outboard  motors.  Management  believes  that a  trend  in the  industry  is for
independent  dealers  to  attempt  to form  alliances  or  buyer's  groups,  for
manufacturers  to include  more  features  as  standard  equipment  on boats and
consequently,  and for  competitive  dealers  to offer  packages  comparable  in
features  and  price to those  that we offer as our  Travis  Edition  lines.  In
addition, several of our competitors, especially those selling yachts or boating
accessories,  are large national or regional chains that may have  substantially
greater  financial,  marketing and other  resources than we may deploy.  Private
sales of used  boats also  represent  a source of  competition.  There can be no
assurance  that we will be able to compete  successfully  in the  retail  marine
industry  in the  future.  See  Risk  Factors  - "We May Not Be Able To  Respond
Effectively To The Significant Competition We Face".

     Impact of  Environmental  and Other Regulatory  Issues.  Our operations are
subject to  regulation,  reporting and licensing by various  federal,  state and
local  governmental  agencies and we are subject to their  respective  statutes,
ordinances and regulations. The failure to satisfy these requirements could have
a material  adverse effect on our business,  financial  condition and results of
operations.

     On October 31,  1994,  the U.S.  Environmental  Protection  Agency  ("EPA")
announced  proposed  emissions  regulations  for  outboard  marine  motors.  The
proposed  regulations  would  require a 75%  average  reduction  in  hydrocarbon
emissions for outboard motors and set standards for carbon monoxide and nitrogen
oxide emissions as well.  Under the proposed  regulations,  manufacturers  began
phasing  in low  emission  models in 1998 and had  approximately  nine  years to
achieve full compliance.  Certain states, such as California,  are proposing and
adopting legislation that would require low emission outboards and other engines
on certain bodies of water or more aggressive  phase-in  schedules than the EPA.
Based on these  regulations  and  public  demand  for  cleaner  burning  motors,
outboard  motor  manufacturers,   such  as  Suzuki  and  Brunswick,  have  begun
distribution for the new EPA compliant outboard motors. Management believes that
the higher retail costs will be somewhat  offset by enhanced fuel efficiency and
acceleration  speed, as well as possible  reductions of maintenance costs of the
new EPA compliant outboard motors. Costs of comparable new models, if materially
more expensive than previous models, or the manufacturer's  inability to deliver
responsive,  fuel efficient  outboard motors that comply with EPA  requirements,
could have a material  adverse effect on our business,  financial  condition and
results of operations.

     In the  ordinary  course of our  business,  we are  required  to dispose of
certain waste  products that are regulated by state or federal  agencies.  These
products include waste motor oil, tires, batteries and certain paints. It is our
policy to use appropriately licensed waste disposal firms to handle this refuse.
If there were improper disposal of these products,  it could result in us facing
potential liability,  fees, fines or other penalties.  Although we do not own or
operate any  underground  petroleum  storage tanks,  we currently  lease several
properties  containing  above-ground  tanks,  which are subject to registration,
testing and governmental regulation.

     Additionally,  certain states have required or are considering  requiring a
license in order to operate a recreational  boat or personal  watercraft.  While
such  licensing   requirements  are  not  expected  to  be  unduly  restrictive,
regulations may discourage potential first-time buyers,  thereby limiting future
sales,  which could have a material  adverse  effect on our business,  financial
condition and results of operations.

     Trademarks  and  service  marks.  We have  received  a  registered  federal
trademark for our corporate logo, which includes the name Travis Boating Center.
We also have trademark  applications  pending with the U.S. Patent and Trademark
Office for the names "Travis  Edition" and for the overall  appearance and trade
dress of our Travis  Boating Center  superstore.  There can be no assurance that
any of these applications will be granted.  However,  based on a number of years
of use,  we believe  that we have  certain  common law rights to these  marks at
least in our  current  market  areas.  Notwithstanding  the  foregoing,  we have
entered  into an agreement  with a marine  dealership  operating  in  Knoxville,
Tennessee  not to use the names  "Travis,"  "Travis  Boating  Center" or "Travis
Edition" in certain types of uses or situations within Knoxville,  Tennessee and
a 50 mile radius therefrom.

     Web site.  We operate a Web site  under the name  "travisboatingcenter.com"
and own the URL for this name, the name "boatorder.com" and numerous derivations
of these names. Our annual reports on Form 10-K, quarterly reports on Form 10-Q,


                                       11
<PAGE>

current  reports on Form 8-K and  amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities  Exchange Act are available
free  of  charge  on our  web  site as  soon  as  reasonably  practicable  after
electronically filing such reports with the SEC.

     Employees.  As of September 30, 2003, our staff consisted of 403 employees,
381 of whom are full time.  The  full-time  employees  include 30 in store level
management and 34 in corporate administration and management. The Company is not
a party to any collective  bargaining agreements and is not aware of any efforts
to unionize its  employees.  We consider the relations  with our employees to be
good.

Item 2.  Properties

     We lease our  corporate  offices  which are located at 12116 Jekel  Circle,
Suite 102,  Austin,  Texas.  We also own numerous  other Travis  Boating  Center
locations.  The remaining facilities are leased under leases with original lease
terms  generally  ranging  from five to ten  years  with  additional  multi-year
renewal  options.  Our leases  typically call for payment of a fixed rent and in
most of the leases we are also responsible for the payment of real estate taxes,
insurance, repairs and maintenance.

     The chart below  reflects  the status and  approximate  size of the various
Travis Boating Center locations operated as of January 9, 2004.

<TABLE>
<CAPTION>

                                         Building           Land       Owned or       Year of Market
             Location                 Square Footage*     Acreage*      Leased            Entry

<S>                                       <C>               <C>         <C>               <C>
Austin, Texas(1)................          20,000            3.5         Leased            1979
San Antonio, Texas(1)...........          34,500            6.5         Owned             1982
Midland, Texas(1)...............          18,750            3.8         Owned             1982
Dallas, Texas(1)................          20,000            4.2         Leased            1983
Abilene, Texas(2)...............          24,250            3.7         Owned             1989
Houston, Texas(2)...............          15,100            3.0         Leased            1991
Baton Rouge, Louisiana(2).......          33,200            7.5         Owned             1992
Beaumont, Texas(2)..............          25,500            6.5         Owned             1994
Arlington, Texas(2).............          31,000            6.0         Leased            1995
Heber Springs, Arkansas(2)......          26,000            9.0         Leased            1995
Hot Springs, Arkansas(2)........          20,510            3.0         Owned             1995
New Iberia, Louisiana(3)........          24,000            3.3         Leased            1995
Florence, Alabama(2)............          22,500            6.0         Leased            1996
Winchester, Tennessee(2)........          28,000            3.5         Leased            1996
St. Rose, Louisiana(2)..........          30,000            3.5         Leased            1997
Pascagoula, Mississippi(2)......          28,000            4.1         Owned             1997
Key Largo, Florida(3)...........           3,000            4.2         Owned             1997
Key Largo, Florida(3)(4)........           3,000            2.4         Owned             1999
Ft. Walton Beach Fl. - Sales(3).           7,000            2.9         Leased            1997
Ft. Walton Beach Fl.- Service(3)(4)        7,500            2.0         Leased            1997
Hendersonville, Tennessee(2)....          31,320            3.6         Leased            1997
Gwinnett, Georgia (1)...........          25,000            5.0         Owned             1997
Claremore, Oklahoma(3)..........          15,000            2.0         Owned             1998
Bossier City, Louisiana(2)......          30,000            8.6         Owned             1998
Longwood, Florida(3)............          10,000            3.1         Leased            1999
Clearwater, Florida(2)..........          21,000            5.0         Owned             1999
Jacksonville, Florida(3)........           8,000            1.5         Leased            1999
Bradenton, Florida(3)...........          20,000            5.0         Leased            1999
Memphis, Tennessee(2)...........          24,000            4.3         Leased            1999
Ft. Myers, Florida(3)...........           6,000            4.0         Leased            1999
Stuart, Florida(2)..............          29,000            4.0         Leased            2000
Pompano, Florida(3).............           6,000            1.0         Leased            2000

</TABLE>

__________________________
*    Square footage and acreage are approximate.
(1)  Newly constructed superstore.
(2)  Facility acquired/leased and converted to superstore.
(3)  Acquired/leased facility
(4)  Locations in Key Largo,  Florida and Ft. Walton,  Florida  operate  service
     facilities  at  separate  locations  in close  proximity  to the main sales
     location.


                                       12
<PAGE>

Item 3.  Legal Proceedings

     From time to time, our Company is involved in litigation relating to claims
arising  from its  normal  business  operations.  Currently,  our  Company  is a
defendant in several lawsuits.

     In January 2003, the Company received notice of a lawsuit filed in the U.S.
Bankruptcy  Court  for the  Northern  District  of  Illinois  on  behalf  of the
bankruptcy  estate for  Outboard  Marine  Corporation  ("OMC").  The Company has
denied the  allegations in this lawsuit and finds them without merit.  OMC was a
primary supplier of outboard engines to our Company prior to OMC's bankruptcy in
December of 2000. The suit alleges that the Company  received  payments from OMC
that were are deemed to be  preferential  payments under  applicable  bankruptcy
law, and demands the repayment thereof.

     The  Company,  based  upon  review of the case and  discussions  with legal
counsel, believes the lawsuit to be similar to numerous filed against former OMC
dealers and that it is without  merit.  There is no  guarantee  that our Company
will prevail in defense of this or other lawsuits. If any lawsuit were to result
in a substantial unfavorable verdict or resolution for the Company it could have
a material adverse impact on the results of operations.

Item 4.  Submission of Matters to a Vote of Security Holders

     The Company's 2003 Annual Meeting of Stockholders was held on September 29,
2003. The following  nominee was re-elected to the Company's  Board of Directors
to serve as a Class "A"  director  for a three year term  expiring  in 2006,  or
until his successor is elected and qualified,  or until his earlier  resignation
or removal.

     Nominee               Votes in Favor   Opposed   Abstained  Broker Non-Vote

     Richard S. Birnbaum    4,611,119(1)      N/A        N/A          N/A

     (Chairman)

     The following  directors'  terms of office  continued after the 2003 Annual
Meeting of Stockholders:  Mark T. Walton,  Kenneth N. Burroughs,  Robert L. Ring
and James P. Karides,  CPA. Pursuant to the Agreements described in this report,
Tracker  has the right to  designate  a majority  of  directors  to the Board of
Directors (Messrs. Burroughs and Ring are current designees representing Tracker
on the Board of Directors). See also Risk Factors - "Change of Control".

     The following issue was also voted upon:

     To  ratify  Ernst  &  Young,  LLP  as  the  independent   certified  public
accountants of the Company for the fiscal year ended September 30, 2003.

                           Votes in Favor   Opposed   Abstained  Broker Non-Vote

                            4,611,119(1)      N/A        N/A          N/A

     (1) TMRC,  LLP  controls  approximately  57%,  or  4,611,119  shares of the
Company's common shares on a fully-diluted,  as-converted basis and voted all of
its shares in favor of each  proposal.  Therefore,  the  Company did not solicit
proxies  for the 2003  Annual  Meeting,  nor did it receive any votes other than
those submitted by Tracker. See also Risk Factors - "Change of Control".

     There was no additional business conducted at the meeting.


                                       13
<PAGE>

                                    PART II

Item 5. Market for Registrant's Common Stock,  Related Stockholder  Matters, and
        Issuer Purchases of Equity Securities.

     Our common stock trades on the Nasdaq Stock Market under the symbol:  TRVS.
As of December 31, 2003,  we believe our shares are  beneficially  owned by more
than 400  shareholders.  On December 31, 2003,  the last reported sales price of
the common stock on the NASDAQ National Market System was $ .66 per share.

     The  following  table sets forth for the period  indicated,  on a per share
basis, the range of high and low sales prices for our common stock during fiscal
years 2003 and 2002 as quoted by the  NASDAQ.  These  price  quotations  reflect
inter-dealer  prices,  without  adjustment  for retail  mark-ups,  mark-downs or
commissions and may not necessarily represent actual transactions:

<TABLE>
<CAPTION>
                                     Fiscal 2003 Sales Price               Fiscal 2002 Sales Price
        Quarter Ended             High         Low        Ending       High         Low        Ending
<S>                              <C>          <C>         <C>         <C>          <C>         <C>
December 31....................  $1.46        $1.00       $1.00       $2.50        $1.75       $1.94
March 31.......................  $ .76        $ .29       $ .29       $3.02        $1.75       $2.50
June 30........................  $ .88        $ .20       $ .81       $2.95        $1.40       $1.90
September 30...................  $1.05        $ .61       $ .75       $1.94        $1.05       $1.18

</TABLE>


                      ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE>
<CAPTION>
                                     (b)
                      (a) Total    Average
                      Number of     Price       (c) Total Number of Shares    (d) Maximum Number (or Approximate
                      Shares (or   Paid per      (or Units) Purchased as       Dollar Value) of Shares (or Units)
                        Units)     Share (or    Part of Publicly Announced    that May Yet Be Purchased Under the
     Period (1)       Purchased      Unit)          Plans or Programs                  Plans or Programs

     <S>               <C>          <C>                   <C>                              <C>
     4/1/03 -          20,000(2)    $ 0.27                104,300                          $757,000
     6/30/03

     7/1/03 -          10,000(2)    $0.72                 114,300                          $750,000
     9/30/03

</TABLE>

     (1) The chart  reflects  repurchases  of common stock  during  fiscal 2003.
Prior to fiscal 2003 the Company had repurchased 84,300 shares for approximately
$237,500 pursuant to its repurchase program.

     (2) The common shares were repurchased  pursuant to the Company's announced
repurchase  program of up to $1,000,000 of common stock. The repurchase  program
was announced on July 26, 2000 and had no terminated date.


     We have never  declared  or paid cash  dividends  on our  Common  Stock and
presently  have  no  plans  to do  so.  However,  we are  obligated  to pay a 6%
cumulative  dividend on the 80,000 shares of $100 par value,  Series A Preferred
Stock we issued during fiscal 2002. The Preferred  dividend is payable quarterly
in arrears  and all  payments  of the  preferred  dividends  are  subject to the
approval of our senior inventory  lenders.  Any change in our dividend policy on
our Common Stock will be at the sole  discretion  of our Board of Directors  and
will depend on our profitability,  financial  condition,  capital needs,  future
loan covenants, general economic conditions,  future prospects and other factors
deemed  relevant  by the  Board of  Directors.  We  currently  intend  to retain
earnings  for use in the  operation  and  expansion  of our  business and do not
anticipate paying cash dividends on our Common Stock in the foreseeable  future.
Certain  covenants  contained in our loan and preferred  stock  agreements  also
effectively restrict the payment of any dividends without prior consent.


                                       14

<PAGE>

Item 6.  Selected Financial Data

     The following selected consolidated financial information should be read in
conjunction  with  and  is  qualified  in  its  entirety  by  reference  to  the
consolidated  financial  statements  of the Company and the notes  thereto,  and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations, included elsewhere in this Report on Form 10-K:

                         FISCAL YEAR ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>

                                                             1999(1)     2000(1)     2001(1)    2002(1)    2003(1)
                                                          (in thousands, except store, per store and per share data)
 <S>                                                      <C>         <C>         <C>         <C>        <C>

 Consolidated Statement of Operations Data:
 Net sales............................................    $  182,259  $  217,718  $  198,539  $ 176,523  $ 140,715
 Gross profit.........................................        46,634      53,309      46,379     37,072     27,656
 Selling, general and administrative expense..........        30,978      42,326      41,813     38,984     33,469
 Operating income/(loss)..............................        13,689       8,338       1,660     (4,386)    (8,254)
 Interest expense.....................................         3,808       6,848       6,533      4,018      3,281
 Income/(loss) before cumulative effect of accounting
    change............................................         6,573         897      (3,281)   (10,264)    (8,899)
 Preferred stock dividends............................            --          --          --        187        480
 Cumulative effect of accounting change, net..........            --          --          --      6,528         --
 Net income/(loss) attributable to common
    shareholders......................................         6,573         897      (3,281)   (16,979)    (9,379)
 Basic earnings/(loss) per share before cumulative
    effect of accounting change.......................    $     1.53  $      .20  $     (.75) $   (2.33) $   (2.05)
 Diluted earnings/(loss) per share before cumulative
 effect of accounting change..........................    $     1.49  $      .20  $     (.75) $   (2.36) $   (2.05)
 Preferred stock dividends............................            --          --          --       (.05)     (0.12)
 Cumulative effect of accounting change...............            --          --          --      (1.50)        --
 Basic earnings/(loss) per share......................    $     1.53  $      .20  $     (.75) $   (3.91) $   (2.17)
 Diluted earnings/(loss) per share....................    $     1.49  $      .20  $     (.75) $   (3.91) $   (2.17)
 Weighted avg. common shares outstanding - basic......         4,291       4,403       4,375      4,345      4,320
 Weighted avg. common shares outstanding - diluted....         4,409       4,446       4,375      4,345      4,320
 Store Data:
   Stores open at period end..........................            38          39          37         34         30
   Average sales per store(2).........................    $    6,055  $    5,630  $    5,252  $   5,117  $   4,560
   Percentage increase (decrease) in comparable store
       sales(3).......................................          1.9%       (1.1%)     (11.6%)     (6.1%)    (15.7%)

</TABLE>

                         FISCAL YEAR ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>

                                                 1999       2000(4)      2001(5)       2002(6)      2003(7)
                                                                     (In thousands)
 <S>                                         <C>           <C>          <C>           <C>          <C>
 Consolidated Balance Sheet Data:
   Cash and cash equivalents.............    $  4,125      $  2,971     $  1,388      $  4,253     $  3,414
   Working capital.......................      12,117        10,948       11,958         8,540        3,226
   Total assets..........................     125,931       129,647      113,680        95,432       59,122
   Short-term debt, including current
      maturities of  notes payable.......      69,547        77,895       61,078        58,410       33,381
   Notes payable less current maturities.       6,897         6,015        9,375         4,525        2,891
   Stockholders' equity..................      37,592        39,552       36,149        26,936       17,541
</TABLE>

(1)  The Consolidated  Statement of Operations Data and the Consolidated Balance
     Sheet Data for the fiscal years ended September 30, 1999,  2000, 2001, 2002
     and  2003  has  been  derived  from  the  audited  consolidated   financial
     statements  of the Company.  Store data has been derived from the Company's
     unaudited internal operating statements.
(2)  Includes only those stores open for the entire preceding 12-month period.
(3)  New stores or upgraded facilities are included in the comparable store base
     at the beginning of the store's thirteenth complete month of operations.
(4)  Included in the current  liabilities,  which reduce  working  capital,  are
     balloon  payments due pursuant to the terms of two real estate loans,  with
     one payment of  approximately  $3.0 million due in  November,  2000 and one
     payment of $597,000 due in June, 2001.  These loans were refinanced  during
     fiscal 2001.


                                       15
<PAGE>

(5)  Included in the current  liabilities,  which reduce  working  capital,  are
     balloon  payments due pursuant to the terms of two real estate loans,  with
     one payment of approximately $577,000 due in December, 2001 and one payment
     of $584,000 due in January, 2002. These loans were refinanced during fiscal
     2002.
(6)  Included in the current  liabilities,  which reduce  working  capital,  are
     balloon  payments due  pursuant to the terms of a real estate loan,  with a
     payment of approximately  $529,000 due in January,  2003 and  approximately
     $6.4  million in real  estate  loans with a single  lender that in December
     2002 were in default of certain financial covenants.
(7)  Included in the current  liabilities,  which reduce  working  capital,  are
     balloon  payments due pursuant to the terms of two real estate loans,  with
     one payment of approximately  $3.7 million due in December,  2003 (see Note
     13 - "Subsequent Events" in the consolidated  audited financial  statements
     of the Company and notes thereto included  elsewhere in this Report on Form
     10-K) and one payment of $698,000 due in June, 2004.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Application of Critical Accounting Policies

     We  have  identified  the  policies  below  as  critical  to  our  business
operations and the  understanding  of our results of operations.  The impact and
any  associated  risks related to these  policies on our business  operations is
discussed throughout Management's Discussion and Analysis of Financial Condition
and Results of Operations  when such  policies  affect our reported and expected
financial results.

     In the ordinary course of business,  we have made a number of estimates and
assumptions  relating to the  reporting of results of  operations  and financial
condition in the  preparation  of our financial  statements  in conformity  with
accounting  principles  generally  accepted  in the United  States.  We base our
estimates on  historical  experience  and on various other  assumptions  that we
believe are reasonable under the  circumstances.  The results form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not  readily   apparent  from  other   sources.   Actual  results  could  differ
significantly  from those estimates under different  assumptions and conditions.
We believe that the following  discussion addresses our most critical accounting
policies,  which are  those  that are most  important  to the  portrayal  of our
financial  condition and results of operations  and require our most  difficult,
subjective,  and  complex  judgments,  often  as a  result  of the  need to make
estimates about the effect of matters that are inherently uncertain.

Revenue Recognition

     We  record  revenue  on sales  of  boats,  motors,  trailers,  and  related
watersport  parts and accessories upon delivery to or acceptance by the customer
at the closing of the transaction. We record revenues from service operations at
the time repair or service work is completed.

     We  refer  customers  to  various  financial  institutions  to  assist  the
customers  in obtaining  financing  for their boat  purchase.  For each loan the
financial  institutions are able to fund as a result of the referral, we receive
a fee.  Revenue  that we earn for  financing  referrals is  recognized  when the
related boat sale is recognized.  The fee amount is generally  based on the loan
amount  and the term.  Generally,  we must  return a portion  of the fee  amount
received if the customer repays the loan or defaults on the loan within a period
of up to 180 days from the initial loan date. We record such refunds,  which are
not significant, in the month in which they occur.

     Revenues from insurance and extended service agreements are recorded at the
time such  agreements are executed which  generally  coincides with the date the
boat,  motor and  trailer is  delivered.  Such  revenues  are not  deferred  and
amortized over the life of the insurance or extended service agreement policies,
because  we  sell  such   policies   on  behalf  of  third   party   vendors  or
administrators.  At the time of sale, we record a fee for insurance and extended
service  agreements  net of the  related  fee  that is  paid to the  third-party
vendors or administrators.  Since our inception,  we have incurred no additional
costs related to insurance or extended service  agreements  beyond the fees paid
to the third party vendors at the time of sale.


                                       16
<PAGE>

Allowance for Doubtful Accounts

     Accounts  receivable  consist  primarily  of  amounts  due  from  financial
institutions  upon sales contract  funding,  amounts due from  manufacturers  or
vendors under rebate programs,  amounts due from  manufacturers or vendors under
warranty  programs  and amounts due from  customers  for  services.  The Company
routinely  evaluates  the  collectibility  of  accounts  receivable  focusing on
amounts due from  manufacturers,  vendors  and  customers.  If events  occur and
market  conditions  change,   causing  collectibility  of  outstanding  accounts
receivable to become unlikely,  the Company records an increase to its allowance
for doubtful  accounts.  The Company  evaluates the probability of collection of
outstanding  accounts  receivable based on several factors which include but are
not limited to the following: 1) age of the outstanding accounts receivable,  2)
financial condition of the manufacturer,  vendor or customer, and 3) discussions
or  correspondence  with the  manufacturer,  vendor  or  customer.  The  Company
determines  the  allowance  for  doubtful  accounts  based  upon  both  specific
identification and a general allowance for accounts  outstanding for a specified
period of time.

Inventory Valuation

     Our inventories consist of boats,  motors,  trailers and related watersport
parts and  accessories.  Inventories are carried at the lower of cost or market.
Cost  for  boats,   motors  and  trailers  is  determined   using  the  specific
identification  method.  Cost for parts and accessories is determined  using the
first-in,  first-out method. If the carrying amount of our inventory exceeds its
fair  value,  we write down our  inventory  to its fair  value.  We utilize  our
historical  experience  and current  sales  trends as the basis for our lower of
cost or market  analysis.  Changes in market  conditions,  lower  than  expected
customer demand,  closing of additional store locations and changing  technology
or features could result in additional  obsolete inventory that is unsaleable or
only  saleable at reduced  prices,  which  could  require  additional  inventory
reserve provisions.

     Additional events and market conditions  include but are not limited to the
following: 1) deteriorating financial condition of the manufacturer resulting in
discontinuance and lack of manufacturer's  warranty for certain boats, motors or
other products,  2) introduction of new models or product lines by manufacturers
resulting  in less  demand  for  previous  models or product  lines,  3) Company
initiatives  to promote  unit sales and reduce  inventory  levels for new and/or
used  inventory by reducing  sales prices,  and 4) Competing  boat  retailers in
various markets in which the Company operates may offer sales incentives such as
price reductions.

Income Taxes

     In accordance  with  Statement of Financial  Accounting  Standards No. 109,
Accounting  for Income Taxes,  deferred  income taxes are provided for temporary
differences  between the basis of assets and liabilities for financial reporting
purposes and for income tax return purposes. The Company routinely evaluates its
recorded  deferred  tax assets to  determine  whether it is more likely than not
that such  deferred  tax  assets  will be  realized.  During the  quarter  ended
September  30, 2002,  the Company  determined  that for deferred tax assets that
could not be  realized by  carryback  to prior tax years it was more likely than
not that such  deferred tax assets would not be realized and  accordingly a full
valuation  allowance has been recorded for these  deferred tax assets since that
time.

Impairment of Long-lived Assets

     Long-lived   assets  consist   primarily  of  property  and  equipment  and
intangible  assets.  Property  and  equipment  and other  intangible  assets are
carried  on  the  Company's  financial  statements  based  on  their  cost  less
accumulated  depreciation or amortization.  The Company  evaluates  property and
equipment  and  other  intangible  assets  held  and  used  by the  Company  for
impairment  whenever events or changes in circumstances  indicate that their net
book value may not be recoverable.  When such factors and  circumstances  exist,
the Company  compares the projected  undiscounted  future cash flows  associated
with the  future use and  disposal  of the  related  asset or group of assets to
their respective carrying amounts. Impairment, if any, is measured as the excess
of the  carrying  amount  over  the  fair  value,  based on  market  value  when
available,  or discounted expected cash flows of those assets and is recorded in
the period in which the determination is made.


                                       17
<PAGE>

Other

     For a more comprehensive list of our accounting  policies,  including those
which involve varying  degrees of judgment,  see Note 1. "Summary of Significant
Accounting  Policies" in the consolidated  audited  financial  statements of the
Company and notes thereto included elsewhere in this Report on Form 10-K.

Results of Operations

     The  following   discussion   should  be  read  in  conjunction   with  the
consolidated  financial statements of our Company and the notes thereto included
elsewhere in this Report on Form 10-K.  The  discussion  in this section of this
Report on Form 10-K contains  forward-looking  statements that involve risks and
uncertainties.  Our actual results could differ  materially from those discussed
herein.  Factors that could cause or contribute to such differences include, but
are not limited to, those  discussed in this section,  those  discussed in "Risk
Factors" and those discussed elsewhere in this Report on Form 10-K.

     The following table sets forth for the periods  indicated certain financial
data as a percentage of net sales:

                         FISCAL YEAR ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>
                                                                 2001           2002           2003
 <S>                                                            <C>            <C>            <C>
 Net sales...............................................       100.0%         100.0%         100.0%
 Costs of goods sold.....................................        76.6           79.0           80.3
                                                          -------------------------------------------
 Gross profit............................................        23.4           21.0           19.7
 Selling, general and administrative expenses............        21.1           22.1           23.8
 Operating income/(loss).................................         0.8           (2.5)          (5.9)
 Interest expense........................................         3.3            2.3            2.3
                                                          -------------------------------------------
 Loss before income taxes and cumulative effect of
    acounting change and preferred stock dividends.......        (2.4)          (4.8)          (8.1)
 Income tax (expense)/benefit............................         0.8           (1.0)           1.8
                                                          -------------------------------------------
 Loss before cumulative effect of accounting change and
    preferred stock dividends............................        (1.7%)         (5.8%)         (6.3%)
                                                          -------------      ---------       --------
Cumulative effect of accounting change, net.............         0.0           (3.7)           0.0
 Preferred stock dividends...............................         0.0            (.11)          (.34)
 Net loss attributable to common shareholders............        (1.7%)         (9.6%)         (6.7%)
                                                          -------------      ---------       --------

</TABLE>

Fiscal Year Ended September 30, 2003 Compared to the Fiscal Year Ended September
30, 2002

     Net sales.  Net sales for the fiscal  year ended  September  30,  2003 were
$140.7 million, a decrease of approximately  $35.8 million or 20.3% from the net
sales of $176.5 million for the fiscal year ended September 30, 2002.

     The decrease in net sales resulted from (i) a decrease in comparable  store
sales, (ii) reduced sales as a result of the impact of fewer stores in operation
(30  versus  34) and (iii) a  decline  in  average  retail  prices  based on our
aggressive  sell-through  of  non-current  inventory.   Comparable  store  sales
declined  by 15.7% (30 stores in base) for the fiscal year ended  September  30,
2003  compared to a decrease of 6.1% (33 stores in base) during the prior fiscal
year.  $10.7  million of the  decrease  in net sales for the  fiscal  year ended
September  30, 2003 is  attributable  to our  decision to close and  consolidate
store  operations  in  Englewood,  Florida;  Knoxville,   Tennessee;   Pickwick,
Tennessee and Little Rock,  Arkansas into other Travis Boating Center  locations
because we  believed  that  store  volumes  and  product  assortments  could not
generate profitable operations or positive cash flows in those markets.

     During the fiscal year ended September 30, 2003, the Company  implemented a
strategy to  aggressively  accelerate the sale of certain aged and  discontinued
product  during  the  primary  summer  boating  season.  As a  result,  we  sold
approximately  $20.0 million of non-current and aged inventory at reduced retail
sales prices and gross profit margins.  While contributing to the decline in net
sales  and  gross  margins,   offsetting   benefits  of  the  strategy  included


                                       18
<PAGE>

improvement  of our inventory  turns and product mix  refinement.  Additionally,
since  substantially  all of the targeted  aged  inventory  was  ineligible  for
borrowing against under our inventory borrowing  agreements,  the sales proceeds
represented incremental working capital. Management believes that the aggressive
sell-through  of  additional  non-current  and aged  inventory is  substantially
complete based upon the  significant  improvement in average days on hand of its
inventory  as  of  September  30,  2003.  We  believe  that  additional  factors
contributing  to the decline in net sales and the decrease in  comparable  store
sales included,  but were not limited to,  continued  erratic levels of consumer
confidence and employment uncertainty.

     Included  within net sales is revenue that we earn related to F&I Products.
The Company,  through  relationships with various national and local lenders, is
able to place  financing for its  customers'  boating  purchases.  These lenders
allow us to "sell" the loan at a rate higher than a minimum rate  established by
each such lender,  and the we earn fees based on the percentage  increase in the
loan rate over the  lender's  minimum  rate (the rate  "spread").  We sell these
loans without recourse, except that in certain instances we must return the fees
earned if the customer repays the loan or defaults in the first 120-180 days. We
also sell, as a broker,  certain types of insurance  (property/casualty,  credit
life,  disability)  and  extended  service  contracts.  We may also  sell  these
products at amounts over a minimum  established  cost and earn income based upon
the profit over the minimum established cost.

     Net sales  attributable to F&I Products  decreased by 7.8% to approximately
$4.7  million in fiscal 2003 from $5.1  million in fiscal  2002.  However,  as a
percentage of net sales,  F&I income  increased to 3.4% in fiscal 2003 from 2.9%
in fiscal  2002.  Management  attributes  the  improvement  in F&I income,  as a
percentage  of net  sales,  to  (i)  improved  training  and  (ii)  implementing
processes  that allow for remote  handling of F&I  functions in several  markets
which  had  previously  under-performed  relative  to  certain  of  our  Company
benchmarks and goals.  Additionally,  in fiscal 2003, our sales of larger,  more
expensive  yachts over 35 feet in length declined and we eliminated  yachts from
our product offering. We believe this is a benefit to F&I income as a percent of
our net sales since the  percentage of customers  buying F&I products  (which is
referred to as "penetration"),  is historically  greater among purchasers of our
Travis Edition boats that are less than 25 feet in length.

     Gross profit.  For the fiscal year ended,  September 30, 2003, gross profit
decreased  25.4% to $27.7  million from $37.1  million in the prior fiscal year.
Gross  profit,  as a percent of sales,  decreased to 19.7% from 21.0% during the
same period in fiscal 2002.

     The decrease in total gross profit, both in actual dollars and as a percent
of net sales,  was  primarily  related to the overall  decline in sales from the
factors  discussed  above in Net Sales.  We believe that we will experience less
erratic  levels of overall  gross  profit  margins  during the 2004  fiscal year
resulting,  in  part,  to (i)  improved  days on hand of our  inventory  and our
product mix and (ii) the substantial  completion of the sell-through of aged and
discontinued inventories discussed above in Net Sales.

     Our decline in gross profit margin during fiscal 2003 was partially  offset
by the increase in our F&I income,  as a percentage  of net sales.  Net sales of
F&I  Products,  which  have a  significant  impact on the gross  profit  margin,
contributed  $4.7  million,  or 17.0%,  of total gross profit in fiscal 2003, as
compared to $5.1 million,  or 13.9%,  of total gross profit for fiscal 2002. Net
sales attributable to F&I Products are reported on a net basis and therefore all
of such sales contribute directly to our gross profit. The costs associated with
the sale of F&I  Products  are  primarily  commissions  and are  included in our
selling, general and administrative expenses.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses  decreased  to $33.5  million in fiscal 2003 from $39.0
million in the prior fiscal year. Selling,  general and administrative expenses,
as a percent  of net  sales,  were 23.8% in fiscal  2003,  compared  to 22.1% in
fiscal 2002.

     The decrease in selling,  general and  administrative  expenses,  in actual
dollars,  for the fiscal year ended  September  30, 2003 versus the prior fiscal
year was primarily attributable to the reduction in wages, commissions, bad debt
expenses  and the  overall  decline  in net  sales.  Commissions  are  generally
variable  based on sales  volumes.  Our "fixed wage"  headcount has been managed
primarily through attrition,  selective  position  consolidation and adoption of
store  staffing  models  intended to reduce  employee  turnover and staff stores
based on a best  practices  approach.  The  reduction  in overall  expenses  was
partially  offset  by  percentage  increases  in  certain  expenses,   primarily


                                       19
<PAGE>

insurance,  rents and taxes since these expenses are generally based on premiums
or  assessment  estimates  from prior years in which we had higher levels of net
sales and inventories.

     A significant component of selling, general and administrative expenses for
fiscal years ended September 30, 2003 and 2002 were non-cash,  bad debt expenses
of  approximately  $1.3  million  and $2.1  million,  respectively.  Despite our
enhanced  collection  efforts,  we have  experienced  delays in collections from
manufacturers,  vendors  and  customers  due  to  both  deteriorating  financial
condition  of these  parties  and a  general  economic  downturn  in the  marine
industry.   Also,  effective  during  our  2003  fiscal  year,  we  discontinued
purchasing   boats  from  several  vendors  and  believe  that  collection  from
discontinued vendors may result in additional delays or possible disputes.

     Depreciation  and  Amortization  Expenses.  Depreciation  and  amortization
expenses  remained flat at approximately  $2.5 million in the fiscal years ended
September 30, 2003 and 2002. However, depreciation and amortization expenses, as
a percent of net sales, increased to 1.7% in fiscal 2003 from 1.4% for the prior
fiscal year primarily as a result of our decline in net sales.

     Interest expense. Interest expense decreased to $3.3 million in fiscal 2003
from $4.0 million in the prior fiscal year.  Interest  expense,  as a percent of
net sales,  remained  flat at 2.3% of net sales in fiscal  years 2003 and fiscal
2002, respectively.

     The decreased interest expense, in actual dollars, was primarily the result
of  significantly  lower balances on our inventory  based lines of credit due to
the significant reductions in the levels of inventory held. We have successfully
reduced  inventory  levels  to  reflect  sales  trends  and as a  result  of our
sell-through of aged and discontinued inventories discussed above in Net Sales.

     Although our  strategy is to maintain  lower  inventory  levels and improve
inventory  turns,  we anticipate  continuing to utilize  significant  amounts of
third party  financing  sources to support  our  inventories  and other  assets.
Accordingly,  we are subject to the impact of increases in interest expenses and
other costs associated with such borrowings.  See "Risk Factors--Our Substantial
Indebtedness  Could  Restrict  Our  Operations  and Make Us More  Vulnerable  to
Adverse Economic Conditions" and "Quantitative and Qualitative Disclosures About
Market Risk."

     Income  Taxes.  Our  effective  income tax benefit  rate for the year ended
September 30, 2003 applicable to the operating loss, was reduced by the creation
of a valuation allowance during the fourth quarter of fiscal 2002. The valuation
allowances were recorded due to uncertainties surrounding the recovery of income
tax assets  against  taxable  income in future  periods.  Our federal income tax
return for the 12 months ended  December 30, 2002 fully  exhausted all available
refunds of federal  income taxes  previously  paid by our Company.  Accordingly,
beginning  with the quarter  ending March 31, 2003, we did not recognize  income
tax benefits on our books from operating losses, due to uncertainties associated
with the utilization of the operating loss carry-forwards in future periods.

     Net loss. For the fiscal year ended September 30, 2003, the Company,  after
preferred  stock  dividends  of  $480,000,  reported a net loss of $9.4  million
($2.17 per basic and  diluted  share)  compared to a net loss for the prior 2002
fiscal  year of $10.3  million  ($2.41  per  basic  and  diluted  share),  after
preferred stock dividends of $187,000; but prior to the effect of the cumulative
accounting  change.  (See Note 1 - "Basis of  Presentation"  in the consolidated
audited financial statements of the Company and notes thereto included elsewhere
in this Report on Form 10-K).

Fiscal Year Ended September 30, 2002 Compared to the Fiscal Year Ended September
30, 2001

     Net sales.  Net sales for the fiscal  year ended  September  30,  2002 were
$176.5 million, a decrease of approximately  $22.0 million or 11.1% from the net
sales of $198.5 million for the fiscal year ended September 30, 2001.

     Comparable  store sales declined by 6.1% (33 stores in base) for the fiscal
year ended  September  30,  2002  compared  to a decrease of 11.6% (32 stores in
base) during the prior fiscal year. Management believes the decline in net sales
and the  decrease  in  comparable  store  sales was  related to various  factors
including,  but not limited to, fewer  stores in  operation,  erratic  levels of
consumer  confidence and employment  uncertainty,  combined with persistent weak


                                       20
<PAGE>

economic and industry  conditions.  The decrease in net sales for the year ended
September  30, 2002  included  $14.4 million in reduced sales as a result of the
impact of fewer stores in operation (34 versus 37).

     Included  within net sales is revenue that we earn related to F&I Products.
The Company,  through  relationships with various national and local lenders, is
able to place  financing for its  customers'  boating  purchases.  These lenders
allow us to "sell" the loan at a rate higher than a minimum rate  established by
each such lender,  and the we earn fees based on the percentage  increase in the
loan rate over the  lender's  minimum  rate (the rate  "spread").  We sell these
loans without recourse, except that in certain instances we must return the fees
earned if the customer repays the loan or defaults in the first 120-180 days. We
also sell, as a broker,  certain types of insurance  (property/casualty,  credit
life,  disability)  and  extended  service  contracts.  We may also  sell  these
products at amounts over a minimum  established  cost and earn income based upon
the profit over the minimum established cost.

     Net sales  attributable to F&I Products decreased by 22.7% to approximately
$5.1 million in fiscal 2002 from $6.6  million in fiscal  2001.  In fiscal 2002,
F&I  income as a  percentage  of net sales also  decreased  to 2.9% from 3.3% in
fiscal 2001 due  primarily to (i) lower  overall net sales,  (ii)  reductions in
overall yields paid by lenders for originating customer finance contracts, (iii)
competitive  pressures  on finance  rates  (which  resulted in lower net spreads
achieved in the  placement  of customer  financing)  and (iv) with regard to our
store locations in Arkansas,  certain "caps" or limits on interest rates allowed
to be charged by lenders in Arkansas.  Decreases in the  percentage of customers
buying these products (which is referred to as  "penetration"),  particularly by
purchasers of the larger,  more expensive boats and reduced  customer demand for
certain insurance products have also been limiting factors.

     Gross profit.  For the fiscal year ended,  September 30, 2002, gross profit
decreased  20.1% to $37.1  million from $46.4  million in the prior fiscal year.
Gross  profit,  as a percent of sales,  decreased to 21.0% from 23.4% during the
same period.

     The decrease in total gross profit, both in actual dollars and as a percent
of net sales,  was primarily  related to (i) the decline in net sales during the
periods and (ii) the inventory  valuation allowance required to reduce the basis
in certain aged or discontinued  inventories to reflect obsolescence and current
market values. The increase in inventory  valuation  allowance was approximately
$956,000 of which a  substantial  portion was recorded  during the quarter ended
September  30,  2002 as we  focused  on  initiatives  to reduce  both  levels of
inventory and outstanding  indebtedness.  Inventory values have been impacted by
the declines in sales and the overall  softness of sales in the marine industry.
Also, in an effort to stimulate  sales, we offered certain sales  incentives and
participated  in  manufacturer  sponsored  rebate  programs  in an effort (i) to
reduce  certain  non-current  inventory  levels and (ii) to  stimulate  sales in
response to weak economic and industry conditions.

     The decline in net sales attributable to F&I Products has also impacted the
gross profit margin.  Net sales of these F&I Products,  which have a significant
impact on the gross profit margin,  contributed $5.1 million, or 13.7%, of total
gross profit in fiscal 2002,  as compared to $6.6  million,  or 14.2%,  of total
gross  profit  for fiscal  2001.  Net sales  attributable  to F&I  Products  are
reported on a net basis and therefore all of such sales  contribute  directly to
our  gross  profit.  The  costs  associated  with the sale of F&I  Products  are
primarily  commissions  and  included  in selling,  general  and  administrative
expenses.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses  decreased  to $39.0  million in fiscal 2002 from $41.8
million in the prior  fiscal year.  During the prior 2001 fiscal  year,  our SGA
expenses  included  approximately  $321,000  related  to  closing  of the  store
locations  in Miami,  Florida  and  Huntsville,  Alabama.  Selling,  general and
administrative  expenses,  as a percent of net sales, were 22.1% in fiscal 2002,
compared to 21.1% in fiscal 2001.

     The decrease in selling,  general and  administrative  expenses,  in actual
dollars,  for the fiscal year ended  September  30, 2002 versus the prior fiscal
year  was  primarily  attributable  to  the  reduction  in  wages,  commissions,
travel/entertainment  expenses  and the  overall  decline in net sales.  We have
managed   headcount   primarily   through   attrition  and  selective   position
consolidation.  The  reduction  in overall  expenses  was offset by increases in
certain expenses,  primarily insurance expense and a substantial increase in bad
debt expense related to reserves on certain accounts receivable. The decrease in
selling, general and administrative expenses for the fiscal year ended September


                                       21
<PAGE>

30, 2002  versus the prior year was  partially  offset by an  increase  bad debt
expense  of  approximately  $1.5  million  of which a  substantial  portion  was
recorded  during the quarter  ended  September  30,  2002.  Despite our enhanced
collection  efforts,  we  continue  to  experience  delays in  collections  from
manufacturers,  vendors  and  customers  due  to  both  deteriorating  financial
condition  of these  parties  and a  general  economic  downturn  in the  marine
industry.  Although  we  continue  to  pursue  collection  of these  outstanding
accounts  receivable,  we believed an increase  in the  allowance  for  doubtful
accounts was warranted to reflect our most recent  assessment of the probability
of collection.

     Depreciation  and  Amortization  Expenses.  Depreciation  and  amortization
expenses  decreased  to $2.5  million in fiscal  2002 from $2.9  million for the
prior fiscal year.  Depreciation and amortization  expenses, as a percent of net
sales, decreased to 1.4% in fiscal 2002 from 1.5% for the prior fiscal year.

     The decrease in  depreciation  and  amortization  expenses,  both in actual
dollars  and as a  percent  of net  sales,  was  primarily  attributable  to our
adoption of SFAS 142 effective on October 1, 2001. Pursuant to the adoption,  we
discontinued the amortization of goodwill. Accordingly, our amortization expense
was $458,000 and $887,000 in fiscal year 2002 and 2001, respectively.

     Interest expense. Interest expense decreased to $4.0 million in fiscal 2002
from $6.5 million in the prior fiscal year.  Interest expense  decreased to 2.3%
from 3.3% of net sales in fiscal years 2002 and fiscal 2001, respectively.

     The decreased interest expense,  both in actual dollars and as a percent of
net sales,  was  primarily  the result of  significantly  lower  balances on our
inventory based lines of credit due to the significant  reductions in the levels
of inventory  held.  We have begun to reduce  inventory  levels to reflect sales
trends and as a result of our prior  implementation  of a Master  Business  Plan
that requires pre-approved purchase orders for all inventory purchases. Interest
expense  also  benefited  from the  decreases in our  variable  borrowing  rates
relative  to the same  period  of the prior  year  resulting  from the  numerous
reductions in the prime rate during the 2002 calendar year.

     We  anticipate  continuing  to utilize  significant  amounts of third party
financing sources to support our inventories and other assets.  Accordingly,  we
are  subject to the impact of  increases  in interest  expenses  and other costs
associated with such borrowings. See "Risk Factors--Our Substantial Indebtedness
Could Restrict Our Operations  and Make Us More  Vulnerable to Adverse  Economic
Conditions" and "Quantitative and Qualitative Disclosures About Market Risk."

     Income  Taxes.  Our  effective  income tax benefit  rate for the year ended
September 30, 2002 applicable to the operating loss, was reduced by the creation
of a valuation  allowance in the  approximate  amount of $3.5 million,  that was
recorded  against our deferred  income tax assets  during the fourth  quarter of
fiscal  2002.  The  valuation  allowances  were  recorded  due to  uncertainties
surrounding  the recovery of income tax assets against  taxable income in future
periods.  Beginning with the quarter ending March 31, 2003, we do not anticipate
recognizing  income  tax  benefits  on our  books  from  future  losses,  due to
uncertainties   associated   with  the   utilization   of  the  operating   loss
carry-forwards in future periods.

     Net loss. For the fiscal year ended September 30, 2002, the Company,  after
preferred stock dividends of $187,000,  reported a net loss (prior to the effect
of the  cumulative  accounting  change)  of $10.3  million  ($2.41 per basic and
diluted  share)  compared  to a net loss of $3.3  million  ($.75  per  basic and
diluted  share)  for the  prior  2001  fiscal  year.  (See  Note 1 -  "Basis  of
Presentation" in the consolidated  audited  financial  statements of the Company
and notes thereto included elsewhere in this Report on Form 10-K).

     Inclusive of the impact of the cumulative  effect of accounting  change, we
reported a net loss of approximately  $17.0 million ($3.91 per basic and diluted
share) for the 2002  fiscal  year.  The net loss from the  cumulative  effect of
accounting  change  is from  our  adoption  of SFAS  142,  "Goodwill  and  Other
Intangible  Assets" as of October 1, 2001.  The  application  of the  transition
provisions  of this new  accounting  standard  required  us to take a  non-cash,
non-recurring,  after-tax charge of approximately  $6.5 million  effective as of
October 2001. The charge eliminated our goodwill accounts.


                                       22
<PAGE>

     The following table sets forth certain unaudited  quarterly  financial data
for each of our last eight  quarters and such data  expressed as a percentage of
our net sales for the respective quarters. The information has been derived from
unaudited financial  statements that, in the opinion of management,  reflect all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair presentation of such quarterly  information.  The operating results for any
quarter are not  necessarily  indicative  of the results to be expected  for any
future period.

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------------
                                                            Fiscal Year 2002                       Fiscal Year 2003
                                                      For the Three Months Ended            For the Three Months Ended
                                                Dec 31    Mar 31    June 30   Sept 30   Dec 31    Mar 31    June 30   Sept 30
--------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net sales...................................    $ 20,666  $ 47,388  $ 67,825  $ 40,644  $ 17,887  $ 38,132  $ 53,129  $ 31,566

Gross profit................................       4,065    10,469    15,211     7,327     3,517     7,589    10,993     5,556
Selling, general and administrative expense.       7,314     9,010    10,850    11,805     7,481     8,497     8,704     8,480
Store Closing Costs.........................          --        --        --        --        --        --       307        --
Operating income/(loss).....................      (3,876)      843     3,736    (5,089)   (4,621)   (1,516)    1,384    (3,502)
Interest expense............................       1,039     1,116     1,054       810       812       931       872       667
Income/(loss) before taxes, preferred stock
dividends and cumulative effect of
accounting change...........................      (3,104)     (253)    2,504    (8,579)   (5,413)   (2,425)      558    (4,154)
Preferred stock dividends...................          --        --       (67)     (120)     (120)     (120)     (120)     (120)
Cumulative effect of accounting change, net.      (6,528)       --        --        --        --        --        --        --
Net income/(loss) attributable to common
shareholders................................      (9,632)     (160)    1,510    (8,699)   (3,703)   (1,841)      438    (4,274)
Basic earnings/(loss) per share before
preferred stock dividends and cumulative
effect of accounting change.................        (.71)     (.04)      .36     (1.98)     (.83)     (.40)      .13      (.96)
Diluted earnings/(loss) per share before
preferred stock dividends and cumulative
effect of accounting change.................        (.71)     (.04)      .25     (1.98)     (.83)     (.40)      .07      (.96)
Preferred stock dividends...................          --        --      (.01)     (.03)     (.03)     (.03)     (.03)     (.03)
Cumulative effect of accounting change, net.       (1.50)       --        --        --        --        --        --        --
Basic earnings/(loss) per share attributable
to common shareholders......................       (2.21)     (.04)      .35     (2.01)     (.86)     (.43)      .10      (.99)
Diluted earnings/(loss) per share
attributable to common shareholders.........       (2.21)     (.04)      .25     (2.01)     (.86)     (.43)      .07      (.99)
Weighted avg. common shares outstanding -
basic.......................................        4,355    4,348     4,346     4,334     4,330     4,330     4,313     4,308
Weighted avg. common shares outstanding
- diluted...................................        4,355    4,348     6,524     4,334     4,330     4,330     8,095     4,308

--------------------------------------------------------------------------------------------------------------------------------
                                                                  As a Percentage of Net Sales
--------------------------------------------------------------------------------------------------------------------------------

Net sales...................................       100.0%   100.0%    100.0%    100.0%    100.0%    100.0%    100.0%    100.0%
Gross profit................................        19.7     22.1      22.4      18.0      19.7      19.9      20.7      17.6
Selling, general and administrative
expense.....................................        35.4     19.0      16.0      29.0      41.8      22.3      16.4      26.9
Operating income/(loss).....................       (18.8)     1.8       5.5     (12.5)    (25.8)     (4.0)      2.6     (11.1)
Interest expense............................         5.0      2.4       1.6       2.0       4.5       2.4       1.6       2.1
Income/(loss) before taxes, preferred stock
dividends and cumulative effect of
accounting change...........................       (15.0)     (.53)     3.7     (21.1)    (30.3)     (6.4)      1.1     (13.2)
Preferred stock dividends...................          --        --      (.10)     (.30)     (.67)     (.31)     (.23)     (.38)
Cumulative effect of accounting change, net.       (31.6)       --       --        --        --        --        --        --
Net income/(loss) attributable to common
shareholders................................       (46.6)      .34      2.2     (21.4)    (20.7)     (4.8)       .82    (13.5)

</TABLE>

     Our business, as well as the sales demand for various types of boats, tends
to be highly  seasonal.  Our strongest  sales period begins in January,  because
many boat and  recreation  shows are held in that  month.  Strong  sales  demand
continues  from January  through the summer  months.  Of our average  annual net
sales over the last three fiscal years,  over 27% occurred in the quarter ending
March 31 and over 37% occurred in the quarter ending June 30. With the exception
of our store locations in Florida,  our sales are generally  significantly lower
in the quarter  ending  December 31.  Because the overall  sales levels (in most
stores) in the  December  quarter  are much less than in the months  with warmer
weather,  we generally  have a substantial  operating loss in the quarter ending
December 31.  Because of the  difference  in sales levels in the warm spring and
summer  months,  versus  the cold fall and  winter  months,  if our sales in the
months  of  January  through  June are weak as a result of  lackluster  consumer
demand,  timing of boat shows,  bad weather or lack of  inventory we will likely
suffer significant operating losses.

     Our business is also  significantly  affected by weather patterns.  Weather
conditions that are  unseasonable or unusual may adversely affect our results of
operations.  For example,  drought conditions or merely reduced rainfall levels,


                                       23
<PAGE>

as well as excessive  rain, may affect our sale of boating  packages and related
products and  accessories.  See "Risk  Factors -We Depend on Strong Sales in the
First Half of the Year" and "Our Sales Depend on Good Weather."

     Quarterly results may fluctuate due to many factors.  Some of these factors
include,  weather  conditions,  timing of  special  events  such as boat  shows,
availability  of  product  and  the  opening  or  closing  of  store  locations.
Accordingly,  the results for any quarterly  period may not be indicative of the
expected results for any other quarterly period.

     The  results  for the  quarters  ended  September  30,  2003 and 2002  were
negatively  impacted  by  certain  events  including  the  expenses  related  to
establishment of reserve allowances on certain inventories,  deferred tax assets
and accounts receivable.

Liquidity and Capital Resources

     Contractual Commitments and Commercial Commitments

     The  following  table  sets  forth a summary  of our  material  contractual
obligations and commercial commitments as of September 30, 2003:

<TABLE>
<CAPTION>

Year Ended September 30,                Line of      Long-Term     Convertible    Operating      Total
(000's)                                 Credit          Debt          Notes        Leases
------------------------------------ -------------- ------------- -------------- ------------ ------------
<S>                                  <C>             <C>           <C>           <C>            <C>
2004                                 $ 28,658(1)     $ 4,723(2)                  $  2,781       $ 36,162
2005                                                   1,579       $ 1,300          2,262          5,141
2006                                                     686                        1,835          2,521
2007                                                     419                        1,290          1,709
2008                                                      80                          815            895
Thereafter                                               127                        2,148          2,275

                                     -------------- ------------- -------------- ------------ ------------
Total                                $  28,658       $ 7,614       $ 1,300       $ 11,131       $ 48,703
                                     ============== ============= ============== ============ ============
</TABLE>

     (1)  Our inventory borrowing  agreements matured in October 2003. (see Note
          13 "Subsequent Events" included in the consolidated  audited financial
          statements of the Company and Notes thereto included elsewhere in this
          Report on Form 10-K)

     (2)  Includes a $3.7  million  real estate loan with a maturity of December
          31, 2003,  that subsequent to September 30, 2003 was refinanced on a 3
          year  promissory  note with another  lender.  (see Note 13 "Subsequent
          Events" included in the consolidated  audited financial  statements of
          the Company and Notes  thereto  included  elsewhere  in this Report on
          Form 10-K)

     Our  short-term  cash needs are  primarily  for working  capital to support
operations,  including inventory  requirements,  off-season  liquidity and store
infrastructure. These short-term cash needs have historically been financed with
cash from operations and further supplemented by borrowings under our floor plan
and revolving credit lines  (collectively  the "borrowing  agreements").  In our
prior fiscal year ended September 30, 2002, we also increased working capital by
the issuance of $4.3 million in  subordinated  convertible  notes (of which $3.0
million was repaid in June of 2002) and $8.0 million from the issuance of 80,000
shares of Series A preferred stock.

     At September  30, 2003,  we had  approximately  $3.4 million in cash,  $5.7
million in  accounts  receivable  (primarily  contracts  in transit  from sales,
manufacturer  rebates  receivable and other amounts due from  manufacturers) and
$31.0 million in inventories. Contracts in transit are amounts receivable from a
customer  or a  customer's  financial  institution  related  to that  customer's
purchase of a boat.  These asset  balances  were  offset by  approximately  $4.3
million of accounts payable and accrued  liabilities,  $28.7 million outstanding
under our  borrowing  agreements  and $4.7  million in  short-term  indebtedness
including  (i) current  maturities  of notes  payable of $311,000  and (ii) real
estate loans in the amount of  approximately  $4.4 million with balloon payments
due at maturity in December 2003 (see Note 13  "Subsequent  Events"  included in
the consolidated  audited financial  statements of the Company and Notes thereto
included elsewhere in this Report on Form 10-K) and June 2004.


                                       24
<PAGE>

     As of September 30, 2003, the aggregate  maximum borrowing limits under our
borrowing  agreements was $55.5 million.  (see Note 13 - "Subsequent  Events" in
the consolidated  audited financial  statements of the Company and notes thereto
included elsewhere in this Report on Form 10-K).

     At  September  30,  2003,  we had  working  capital of  approximately  $3.2
million.  Working capital,  as of that date, was reduced by our net loss and the
aforementioned  $4.4 million in real estate  loans with balloon  payments due at
maturity in December 2003 (see Note 13 - "Subsequent Events" in the consolidated
audited financial statements of the Company and notes thereto included elsewhere
in this Report on Form 10-K) and June 2004, classified as current liabilities.

     In fiscal 2003,  operating  activities provided cash flows of $23.4 million
due  primarily to the decrease of $26.0 million in  inventories  (primarily as a
result of our fiscal year 2003 business plan inventory sell-through  strategies)
and a net decrease in accounts  receivable.  These amounts were offset partially
by the net loss of $8.9 million and a decrease in accounts payable.

     In fiscal 2002,  operating  activities  provided cash flows of $3.9 million
due primarily to the decrease of $8.2 million in inventories  and the collection
of the income taxes recoverable.  These amounts were offset partially by the net
loss of $17.0  million,  the cumulative  effect of accounting  change and a $1.8
million decrease in accounts payable.

     Investing activities in fiscal 2003 provided cash flows of $2.9 million due
primarily to the sale and leaseback of our store locations in Austin,  Texas and
Dallas,  Texas.  The two  properties  were sold at a  collective  sales price of
approximately  $3.3 million and leased back by the Company pursuant to long term
operating leases.

     Financing  activities  in  fiscal  2003 used  cash  flows of $27.2  million
primarily  from  the  repayment  of  amounts  outstanding  under  our  borrowing
agreements  and other notes  payable.  The  repayments  were  generally from the
proceeds of our (i) net reduction in overall  inventory levels during the period
and (ii) repayments of real estate loans in conjunction with the  sale/leaseback
of certain stores discussed above. We finance substantially all of our inventory
pursuant to  borrowing  agreements  with two  commercial  finance  companies  --
Transamerica   Commercial  Finance   Corporation   ("TCFC")  and  GE  Commercial
Distribution  Finance  Corporation  ("GE") (formerly known as Deutsche Financial
Services  Corporation  ("DFS")).  The agreements contain  substantially  similar
terms and financial  covenants.  As of September 30, 2003, the maximum aggregate
borrowing availability was limited to a maximum credit limit of $55.5 million at
various prime based or LIBOR based  interest rates (varying from 4.12% to 4.75%)
and approximately  $28.7 million was outstanding.  The borrowing  agreements are
primarily for the purchase of inventories and do not provide  available  amounts
for general  working capital  requirements.  Based on the terms of the borrowing
agreements we could  request for the lenders to advance  funds to  manufacturers
for additional  inventory  purchases up to the remaining available credit limit.
As we purchase inventory,  we authorize our lenders to remit payment directly to
the  manufacturers  pursuant  to our  borrowing  agreements.  Substantially  all
inventory,  accounts receivable,  furniture,  fixtures,  equipment,  real estate
(junior liens) and intangible assets  collateralize these borrowing  agreements.
The terms of the borrowing  agreements also provide for fees for  administrative
monitoring  and for any unused  portions  of  available  credit.  Also,  various
manufacturers  provide us or our lenders with interest expense  assistance under
the  inventory  borrowing  agreements in order to subsidize the carrying cost of
inventory.  Accordingly,  no interest expense is recorded during portions of the
year (generally  August through May) for certain limited  borrowings under these
agreements.  Discontinuance  of these  agreements could result in an increase to
interest  expense.  Acquisitions,  the  payment  of common  stock  dividends  or
repurchases  of our common stock are also  substantially  limited  without prior
consent.

     The borrowing  agreements,  which originated in fiscal 2000, expired during
fiscal 2003 and were subsequently  renewed through October 15, 2003 pending each
lender's  review of our request for a 12 month  renewal  term. As of the date of
this Report on Form 10-K,  we have been notified by each lender that our request
has been reviewed and subject to  appropriate  documentation  our new expiration
date will be in October 2004. The renewed  borrowing  agreements are expected to
include  loan  agreements   containing  various  loan  covenants  and  borrowing
restrictions,  including, but not limited to, minimum financial ratios governing
net worth,  inventory turn,  accounts  receivable turn and percentage  levels of
operating  expenses.  (See Note 13 -  "Subsequent  Events"  in the  consolidated


                                       25
<PAGE>

audited financial statements of the Company and notes thereto included elsewhere
in this Report on Form 10-K).

     As of the date of this report on Form 10-K, management believes the Company
to be in compliance with all terms and conditions of its borrowing agreements.

     Merchandise  inventories  were  $31.0  million  and  $57.0  million  as  of
September 30, 2003 and 2002, respectively.  Accounts receivable, on a net basis,
decreased  by  approximately  $4.0  million to $5.7 million at the end of fiscal
2003 from the same time one year earlier due to the  write-off of  uncollectable
accounts,   an  increase  in  the  allowance  and  the  general   collection  of
receivables.  Noncompete  agreements  decreased  by  approximately  $418,000  to
$731,000 in fiscal 2003 due to the scheduled amortization of this asset.

     We had net capital  expenditures of  approximately  $480,000 in fiscal 2003
and  approximately  $1.1 million in fiscal 2002. The capital  expenditures  were
primarily used for the purchase and  replacement of assets used in operations of
the store locations.  These capital  expenditures  were primarily funded through
our internal cash flows.

     Based upon management's  fiscal 2004 operating plan,  including the (i) the
detailed review and assessment of labor  requirements and operating policies and
procedures  we  implemented  to  significantly  reduce  operating  expenses  for
corporate and store overhead, (ii) revenue opportunities based on the review and
benchmarking  of all  stores in the  areas of  parts,  service  and  finance  to
leverage the best practices and achievements of our top producing stores,  (iii)
improvement  in  inventory  days  on  hand,  turns  and  assortments,  (iv)  the
sale/leaseback   or   refinancing  of  certain  assets  and  (v)  the  borrowing
agreements, management believes that there is sufficient liquidity and resources
to fund fiscal year 2004  operations in the ordinary  course of our  operations.
However,  our  auditors  have  issued an  opinion  referencing  "going  concern"
limitations  based  on our  operating  losses  and  the  matured  status  of our
borrowing  agreements  which  as of the  date of this  Report  on Form  10-K are
pending  renewal  (see  Notes  1 and 13 in the  consolidated  audited  financial
statements of the Company and notes thereto included elsewhere in this Report on
Form  10-K).   Further,   material  shortfalls  or  variances  from  anticipated
performance  or the timing of certain  expenses or revenues  could  result in an
adverse  impact on our business,  financial  condition and results of operations
requiring  us to seek  additional  equity  capitalization,  borrowings  or other
alternate  sources  of  financing.  (See Risk  Factors  "Execution  of  Business
Plans").

New Accounting Standards

     In November 2002, the Emerging  Issues Task Force ("EITF") of the Financial
Accounting Standards Board reached a consensus on issue No. 02-16, Accounting by
a Reseller for Cash Consideration Received from a Vendor. EITF 02-16 establishes
the  accounting   standards  for  the   recognition   and  measurement  of  cash
consideration  paid by a vendor  to a  reseller.  EITF  02-16 is  effective  for
interim period  financial  statements  beginning  after December 15, 2002,  with
early adoption permitted. There was no material impact from the adoption of this
Statement on January 1, 2003.

     In  November  2002,  the  Emerging  Issues  Task Force  ("EITF")  reached a
consensus on Issue No. 00-21, Revenue  Arrangements with Multiple  Deliverables.
EITF 00-21 provides guidance on how to account for arrangements that involve the
delivery or  performance  of multiple  products,  services  and/or rights to use
assets. The provisions of EITF 00-21 will apply to revenue  arrangements entered
into in fiscal periods beginning after June 15, 2003. Management does not expect
the adoption of EITF 00-21 to have a material impact on the Company's  financial
position, results of operations or cash flows.

     In December 2002, the FASB issued Statement 148, Accounting for Stock-Based
Compensation,  Transition  and  Disclosure.  Statement 148 provides  alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based  employee  compensation.  Statement 148 also requires
that  disclosures  of the pro forma  effect of using  the fair  value  method of
accounting for stock-based  employee  compensation be displayed more prominently
and in a tabular format. Additionally,  Statement 148 requires disclosure of the
pro forma effect in interim financial statements. The Company adopted the annual
disclosure  requirements  of Statement 148, which are effective for fiscal years
ending  after  December 15, 2002 and elected to continue to account for employee
stock  options  under  APB No.  25.  The  interim  disclosure  requirements  are
effective for interim periods  commencing  after December 15, 2002. The adoption
of this standard had no effect on the Company's financial  position,  results of
operations or cash flows.


                                       26
<PAGE>

     In January  2003,  the FASB issued FASB  Interpretation  No. 46, or FIN 46,
Consolidation of Variable  Interest  Entities,  an Interpretation of ARB No. 51.
FIN 46 requires  certain  variable  interest  entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to  February  1, 2003,  the  provisions  of FIN 46 must be applied for the first
interim  or annual  period  beginning  after  June 15,  2003.  We do not  expect
adoption of FIN 46 to have a material impact on our financial position,  results
of operations or cash flows.

     In May  2003,  the  FASB  issued  Statement  150,  Accounting  for  Certain
Financial  Instruments  with  Characteristics  of both  Liabilities  and Equity.
Statement 150 requires that certain  financial  instruments  that are settled in
cash,  including  certain  types  of  mandatorily  redeemable   securities,   be
classified as liabilities  rather than as equity or temporary equity.  Statement
150 is effective for financial  instruments  entered into or modified  after May
31, 2003,  and  otherwise is  effective  at the  beginning of the first  interim
period after June 15, 2003. Management does not expect the adoption of Statement
150 to have a material effect on the Company's  financial  position,  results of
operations or cash flows.

Inflation

     The Company believes that inflation generally has not had a material impact
on its operations or liquidity to date.

Item 7A. Quantitative And Qualitative Disclosures About Market Risk

     At September 30, 2003,  approximately  80.6% of the Company's notes payable
and other short term obligations bear interest at variable rates, generally tied
to a  reference  rate such as the LIBOR  rate or the prime rate of  interest  of
certain banks. During the fiscal year ended September 30, 2003, the average rate
of interest of such variable rates was 4.46%. Increases in the variable interest
rates would  result in increased  interest  expense and  decreased  earnings and
cashflow. Assuming the same level of borrowings for the year ended September 30,
2003,  which  averaged  approximately  $50.7  million,  an increase of 2% in the
average  rate of interest  would  result in an increase in fiscal 2003  interest
expense and net loss of approximately  $1.0 million.  Conversely,  a decrease in
the average rate of interest  would result in decreased  interest  expense and a
decrease in net loss and improved cashflow.

Item 8.  Financial Statements

     For the financial  statements and supplementary  data required by this Item
8, see the Index to Consolidated Financial Statements and Schedules.

Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

     Not applicable.

                                    PART III

Item 10. Directors and Executive Officers

     There is  incorporated  herein by reference  that portion of the  Company's
proxy or information statement for the 2004 Annual Meeting of Shareholders which
appears  therein  under  the  captions  "Item  1:  Election  of  Directors"  and
"Information Concerning Directors."


                                       27
<PAGE>

Item 11. Executive Compensation

     There is  incorporated  in this Item 11 by  reference  that  portion of the
Company's definitive proxy or information  statement for the 2004 Annual Meeting
of Shareholders which appears under the caption "Executive Compensation."

Item 12. Security Ownership of Certain Beneficial Owners and Management

     There is  incorporated  in this Item 12 by  reference  that  portion of the
Company's definitive proxy statement for the 2004 Annual Meeting of Shareholders
which appears under the caption "Securities Holdings of Principal  Shareholders,
Directors, Nominees and Officers."

Item 13. Certain Relationships and Related Transactions

     During the fiscal  year ended  September  30,  2003 the  Company  purchased
approximately $10.9 million, or 15.6% of its inventory purchases from affiliates
of Tracker.  There is  incorporated in this Item 13 by reference that portion of
the  Company's  definitive  proxy or  information  statement for the 2004 Annual
Meeting of Shareholders which appears under the captions "Certain  Relationships
and Related  Transactions"  and "Compensation  Committee  Interlocks and Insider
Participation."

                                    PART IV

Item 14. Controls and Procedures

     Within the 90 days prior to the date of filing this Form 10-K,  the Company
performed an evaluation, under the supervision and with the participation of the
Company's  management,  including the Company's Chief Executive  Officer and the
Company's  Chief  Financial  Officer,  of the  effectiveness  of the  design and
operation of the Company's  disclosure controls and procedures.  Based upon that
evaluation,  the  Company's  Chief  Executive  Officer and the  Company's  Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company  required to be included in the  Company's  periodic SEC
filings.

     There have been no significant  changes in the Company's  internal controls
or  in  other  factors  which  could  significantly   affect  internal  controls
subsequent to the date the Company carried out its evaluation.

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1. Financial Statements - The following consolidated financial statements of
the  Company  are  included  following  the  Index  to  Consolidated   Financial
Statements and Schedules on page F-1 of this Report.

     Report of Independent Auditors............................              F-2
     Consolidated Balance Sheets...............................              F-3
     Consolidated Statements of Operations.....................              F-5
     Consolidated Statements of Stockholders' Equity...........              F-6
     Consolidated Statements of Cash Flows.....................              F-7
     Notes to Consolidated Financial Statements................              F-9

(a) 2. Financial  Statement  Schedules - All schedules have been omitted because
they are not applicable, not required under the instructions, or the information
requested is set forth in the consolidated financial statements or related notes
thereto.

(b) Current  Reports on Form  8-K--January  12,  2004.  Item 12,  Travis Boats &
Motors reports Second and Third Quarter Fiscal 2003 and Fiscal Year 2003 Results
and Updates on Key Initiatives.

(c)  Exhibits - The  following  Exhibits  are  incorporated  by reference to the
filing or are included following the Index to Exhibits.


                                       28
<PAGE>

                                INDEX TO EXHIBITS

     (a)  Exhibits:

3.1--Restated Articles of Incorporation of the Registrant, as amended.(1)

3.2--Restated Bylaws of the Registrant, as amended.(1)

4.1--A copy of the Travis Boats & Motors,  Inc.  Statement of Designations of 6%
     Series A Cumulative  Convertible  Preferred  Stock dated March 12, 2002.(7)

4.2--A form of the Warrant to Purchase  Series A Preferred Stock of Travis Boats
     & Motors,  Inc.(7)

4.3--A copy of the Travis Boats & Motors, Inc. Amended and Restated Statement of
     Designations  of 6% Series A Cumulative  Convertible  Preferred Stock dated
     April 8,  2002.(7)

10.1--Loan and Security  Agreement  dated November __, 2003, by and among Travis
     Boats & Motors, Inc., its subsidiaries and Kennedy Funding,  Inc., as agent
     for the lenders named therein (to be filed by amendment).

10.2--Promissory  Note dated  November  10,  2003,  executed  by Travis  Boats &
     Motors,  Inc. and its  subsidiaries,  payable to Kennedy Funding,  Inc. and
     Angloamerican Servicing, LLC (to be filed by amendment).

10.3--Deed of Trust,  Assignment  of Rents,  Security  Agreement  and  Financing
     Statement  dated  November  10, 2003,  from Travis Boats & Motors,  Inc. to
     Ronald Dold,  trustee for Kennedy  Funding,  Inc., as agent (to be filed by
     amendment).

10.4--Subordination  Agreement  dated  December __, 2003,  between  Transamerica
     Commercial  Finance  Corporation,  as agent, and Kennedy Funding,  Inc. and
     Anglo Financial Servicing, LLC (to be filed by amendment).

10.5--Subordination  Agreement  dated  December __, 2003,  between  Transamerica
     Commercial  Finance  Corporation,  as agent, and Kennedy Funding,  Inc. and
     Anglo Financial Servicing, LLC (to be filed by amendment).

10.17(a)--Promissory  Note  dated as of  September  20,  1995,  in the  original
     principal amount of $462,145.53, payable by TBC Arkansas, Inc. to Red River
     Marine, Inc. #2.(1)

10.17(b)--Mortgage  With Power of Sale (Realty) dated  September 20, 1995,  from
     TBC Arkansas, Inc. to Red River Marine, Inc. #2.(1)

10.20--Travis Boats and Motors, Inc. 1995 Incentive Plan.(1)

10.23--Form of  Indemnification  Agreement  for  Directors  and  Officers of the
     Company.(1)

10.24--Management   Agreement   dated  December  14,  1995,  by  and  among  TBC
     Management, Ltd., the Company and its subsidiaries.(1)

10.34--Stock  Purchase  Agreement  dated as of  September  30, 1997 among Travis
     Boating  Center  Florida,  Inc. and  Frederic D. Pace and John W.  Reinhold
     providing  for the purchase of 100% of the common  stock of Adventure  Boat
     Brokerage, Inc.(2)


                                       29
<PAGE>

10.35--Stock  Purchase  Agreement  dated as of  September  30, 1997 among Travis
     Boating  Center  Florida,  Inc.  and  John W.  Reinhold  providing  for the
     purchase  of 100% of the  common  stock of  Adventure  Marine  &  Outdoors,
     Inc.(2)

10.36--Stock  Purchase  Agreement  dated as of  September  30, 1997 among Travis
     Boating  Center  Florida,  Inc. and  Frederic D. Pace and John W.  Reinhold
     providing for the purchase of 100% of the common stock of Adventure  Marine
     South, Inc.(2)

10.40--Employment  Agreement  dated  November 16, 1999  between TBC  Management,
     Ltd. and Mark T. Walton.(3)

10.41--Employment  Agreement  dated  November 16, 1999  between TBC  Management,
     Ltd. and Michael B. Perrine.(3)

10.48--Loan and  Security  Agreement,  dated as of  January  31,  2000,  between
     Travis Boats & Motors,  Inc., along with certain of its  subsidiaries,  and
     Deutsche Financial Services  corporation related to a Credit Facility of up
     to $60,000,000.00.(8)

10.49--Loan and Security  Agreement dated as of January 31, 2000, by and between
     Transamerica  Commercial  Finance  Corporation  along  with  certain of its
     subsidiaries,  and Transamerica Commercial Finance Corporation related to a
     line of credit with a maximum credit amount of $50,000,000.00.(8)

10.50--First Amendment to Loan and Security  Agreement,  dated January 31, 2000,
     by and between Deutsche Financial  Services  Corporation and Travis Boats &
     Motors, Inc., along with certain of its subsidiaries.(8)

10.51--Letter,   dated  December  29,  2000,  to  TBC   Management,   Inc.  from
     Transamerica Commercial Finance Corporation.(8)

10.52--TBC  Management  Ltd. Part I Amendment to Employment  Agreement with Mark
     T. Walton.(4)

10.54--TBC  Management  Ltd.  Part I  Amendment  to  Employment  Agreement  with
     Michael B. Perrine.(4)

10.57--Amended and Restated Loan and Security  Agreement  between Travis Boats &
     Motors,  Inc.  and Deutsche  Financial  Services  Corporation,  dated as of
     December 10, 2001.

10.58--Amendment  No.  2 to  Travis  Boats &  Motors,  Inc.  Loan  and  Security
     Agreement by and between the Company and  Transamerica  Commercial  Finance
     Corporation, dated as of December 14, 2001.

10.62--Subordination  Agreement - Travis Boats & Motors,  Inc.  Indebtedness  to
     Shareholder  Purchasers  by and between  those  parties  (Re:  Transamerica
     Commercial Finance Corporation), dated as of December 14, 2001.

10.63--Subordination  Agreement - Travis Boats & Motors,  Inc.  Indebtedness  to
     Shareholder Purchasers by and between those parties (Re: Deutsche Financial
     Services Corporation), dated as of December 14, 2001.

10.66--Travis Boats & Motors, Inc.  Subordinated Note Purchase Agreement between
     Travis  Boats &  Motors,  Inc.  and  Shareholder  Purchasers,  dated  as of
     December 14, 2001.(4)

10.67--Form of Convertible  Subordinated Promissory Note (Travis Boats & Motors,
     Inc. to Shareholder Purchaser), dated as of December 14, 2001.(4)

10.68--A copy of the  Preferred  Stock and Warrant  Purchase  Agreement,  by and
     between  Travis Boats & Motors,  Inc.,  and TMRC,  L.L.P.,  dated March 13,
     2002.(7)


                                       30
<PAGE>

10.69--A copy of the  Tracker/Travis  Master  Dealer  Agreement  (Master  Dealer
     Supply Agreement),  by and between Travis Boats & Motors, Inc., and Tracker
     Marine,  L.L.C.,  dated March 13, 2002.(7)

10.70--A  copy  of the  TBC  Management,  Ltd.  Amendment  No.  2 to  Employment
     Agreement  with Mark T. Walton,  dated March 13, 2002.(7)

10.71--A  copy  of the  TBC  Management,  Ltd.  Amendment  No.  2 to  Employment
     Agreement  with  Michael B.  Perrine,  dated  March 13,  2002.(7)

10.73--A copy of the  Amendment  No. 3 to Travis Boats & Motors,  Inc.  Loan and
     Security  Agreement  by  and  between  Travis  Boats  &  Motors,  Inc.  and
     Transamerica Commercial Finance Corporation, dated March 13, 2002.(7)

10.74--A copy of the Consent and Waiver by and  between  Travis  Boats & Motors,
     Inc. and Transamerica  Commercial  Finance  Corporation (Re: Tracker Marine
     L.L.C.),  dated as of  March 7,  2002.(7)

10.75--A copy of the Consent and Waiver by and  between  Travis  Boats & Motors,
     Inc.  and Deutsche  Financial  Services  Corporation  (Re:  Tracker  Marine
     L.L.C.),  dated as of  March 7,  2002.(7)

10.76--A copy of the Consent and Waiver by and  between  Travis  Boats & Motors,
     Inc. and Hibernia  National Bank (Re:  Tracker Marine L.L.C.),  dated as of
     March 12, 2002.(7)

10.77--Term Sheet,  dated January 7, 2003, by and between Travis Boats & Motors,
     Inc., and TMRC, L.L.P.(6)

10.78--Loan and Security Agreement,  dated as of January 7, 2003, by and between
     Travis Boats & Motors, Inc., and TMRC, L.L.P.(6)

10.79--Amendment  Regarding Amended and Restated Loan and Security  Agreement by
     and among Travis Boats & Motors, Inc., certain of its subsidiaries,  and GE
     Commercial  Distribution  Finance  Corporation,  formerly known as Deutsche
     Financial Services Corporation ("CDF").(6)

10.80--Amendment  No. 4 to  Travis  Boats &  Motors,  Inc.,  Loan  and  Security
     Agreement,  by and between Travis Boats & Motors,  Inc.,  and  Transamerica
     Commercial Finance Corporation.(6)

10.81--Security  Agreement - Tax Refund,  by and between  Travis Boats & Motors,
     Inc.,  and  Transamerica  Commercial  Finance  Corporation,  as  agent  for
     Transamerica  Commercial Finance  Corporation,  GE Commercial  Distribution
     Finance Corporation and TMRC, L.L.P.(6)

10.82--Assignment  of Tax  Claim,  given by  Travis  Boats &  Motors,  Inc.,  to
     Transamerica  Commercial  Finance  Corporation,  as agent for  Transamerica
     Commercial  Finance   Corporation,   GE  Commercial   Distribution  Finance
     Corporation and TMRC, L.L.P.(6)

10.83--Option Agreement dated January 7, 2003, by and between Mark T. Walton and
     TMRC, L.L.P.(6)

10.84--Option  Agreement dated January 7, 2003, by and between Robert C. Siddons
     and TMRC, L.L.P.(6)

10.85--Intercreditor  Agreement (Travis Tax Refund),  by and among  Transamerica
     Commercial Finance  Corporation,  TMRC, L.L.P., GE Commercial  Distribution
     Finance Corporation and Transamerica  Commercial Finance Corporation as tax
     refund agent.(6)

10.86--StockOption  Cancellation Agreement dated January 7, 2003, by and between
     Travis Boats & Motors, Inc., and Michael B. Perrine.(6)

10.87--Stock Option Cancellation Agreement dated January 7, 2003, by and between
     Travis Boats & Motors, Inc., and Mark T. Walton.(6)

10.88--Stock Option Cancellation Agreement dated January 7, 2003, by and between
     Travis Boats & Motors, Inc., and Richard Birnbaum.(6)

10.89--AMENDMENT  NO. 3 TO EMPLOYMENT  AGREEMENT,  by and between Mark T. Walton
     and TBC Management,  Ltd., a Texas limited  partnership,  and agreed to and
     accepted by Travis Boats & Motors, Inc., a Texas corporation.(6)

10.90--AMENDMENT  NO. 3 TO  EMPLOYMENT  AGREEMENT,  by and  between  Michael  B.
     Perrine and TBC Management,  Ltd., a Texas limited partnership,  and agreed
     to and accepted by Travis Boats & Motors, Inc., a Texas corporation.(6)

11.1--Travis  Boats & Motors,  Inc.,  Earnings Press Release dated December 31,
     2002.(6)

21--List of Subsidiaries of Registrant.(3)

23--Consent of Independent Auditors (filed herewith).

31.1--Certification  of Chief  Executive  Officer  pursuant  to  Section  302 of
     Sarbanes-Oxley Act of 2002 (filed herewith).

31.2--Certification  of Chief  Financial  Officer  pursuant  to  Section  302 of
     Sarbanes-Oxley Act of 2002 (filed herewith).

32.1--Certification  of Chief  Executive  Officer  pursuant  to  Section  906 of
     Sarbanes-Oxley Act of 2002 (filed herewith).

32.2--Certification  of Chief  Financial  Officer  pursuant  to  Section  906 of
     Sarbanes-Oxley Act of 2002 (filed herewith).

(d)  Financial Statement Schedules. See Item 15(a)(2) above.



(1)  Incorporated by reference to the Company's  Registration  Statement on Form
     S-1 effective June 26, 1996 (File No. 333-03283).

(2)  Incorporated by reference to the Company's Annual Report on Form 10-K filed
     December 29, 1997 (File No. 000-20757).

(3)  Incorporated  by reference to the  Company's  Annual  Report on Form 10-K/A
     filed with the Commission on January 13, 2000 (File No. 600-20757).

(4)  Incorporated by reference to the Company's Annual Report on Form 10-Q filed
     with the Commission on August 14, 2001 (File No. 000-20757).


                                       31
<PAGE>

(5)  Incorporated  by reference  to the  Company's  Periodic  Report on Form 8-K
     filed with the Commission on March 13, 2002.

(6)  Incorporated  by reference  to the  Company's  Periodic  Report on Form 8-K
     filed with the Commission on January 15, 2003.

(7)  Incorporated by reference to the Company's Annual Report on Form 10-K filed
     with the Commission on January 21, 2003 (File No. 000-20757).

(8)  Portions  of  this  exhibit  have  been  omitted  and  are  subject  to  an
     application  for   confidential   treatment   filed   separately  with  the
     Commission.


                                       32
<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries

                        Consolidated Financial Statements

                 Years ended September 30, 2003, 2002 and 2001

                                    Contents


Report of Independent Auditors...............................................F-2

Audited Consolidated Financial Statements

Consolidated Balance Sheets..................................................F-3

Consolidated Statements of Operations........................................F-5

Consolidated Statements of Stockholders' Equity..............................F-6

Consolidated Statements of Cash Flows........................................F-7

Notes to Consolidated Financial Statements...................................F-8


                                      F-1
<PAGE>

                         Report of Independent Auditors

The Board of Directors
Travis Boats & Motors, Inc. and Subsidiaries


We have audited the accompanying  consolidated  balance sheets of Travis Boats &
Motors, Inc. and Subsidiaries as of September 30, 2003 and 2002, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the three years in the period ended September 30, 2003.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Travis Boats &
Motors,  Inc.  and  Subsidiaries  as of  September  30,  2003  and  2002 and the
consolidated  results of their  operations  and their cash flows for each of the
three  years  in the  period  ended  September  30,  2003,  in  conformity  with
accounting principles generally accepted in the United States.

The accompanying  financial  statements have been prepared  assuming that Travis
Boats & Motors,  Inc. will continue as a going concern.  As more fully described
in Note 1, the Company has incurred  recurring losses and its current agreements
for floor plan and  revolving  lines of credit have  matured.  These  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Management's plans in regard to these matters are described in Note 1.
The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and  classifications  of  liabilities  that may result  from the outcome of this
uncertainty.

As  discussed in Note 4 to the  financial  statements,  on October 1, 2001,  the
Company adopted  Statement of Financial  Accounting  Standards No. 142, Goodwill
and Other Intangible Assets, to change its method of accounting for goodwill and
other intangible assets.


                              /s/ Ernst & Young LLP

Austin, Texas

November 21, 2003, except for Note 13 as to which the date is January 12, 2004


                                      F-2
<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                                                                       September 30,
                                                                                2003                    2002
                                                                           ---------------          -------------

<S>                                                                               <C>                    <C>
Assets
Current assets:
      Cash and cash equivalents                                                   $ 3,414                $ 4,253
      Accounts receivable, net of allowance for doubtful
           accounts of $2,100 in 2003 and $2,058 in 2002                            5,655                  9,681
      Prepaid expenses                                                                914                  1,009
      Income taxes recoverable and deferred tax asset                                 ---                    611
      Inventories                                                                  30,970                 56,957
                                                                           ---------------          -------------

Total current assets                                                               40,953                 72,511

Property and equipment:
     Land                                                                           5,124                  5,982
     Buildings and improvements                                                    13,611                 15,899
     Furniture, fixtures and equipment                                              9,134                  9,327
                                                                           ---------------          -------------
                                                                                   27,869                 31,208

Less accumulated depreciation                                                    (10,634)                (9,820)
                                                                           ---------------          -------------
                                                                                   17,235                 21,388



Noncompete agreements, net of accumulated amortization of                             731                  1,149
     $2,479 in 2003 and 2,061 in 2002

Other assets                                                                          203                    384

                                                                           ---------------          -------------
Total assets                                                                      $59,122                $95,432
                                                                           ===============          =============

</TABLE>

See accompanying notes.


                                       F-3
<PAGE>

<TABLE>
<CAPTION>
                                                                                        September 30,
                                                                                  2003                  2002
                                                                              -------------         -------------
<S>                                                                                <C>                   <C>
Liabilities
Current liabilities:

     Accounts payable                                                              $ 2,258               $ 4,122

     Accrued liabilities                                                             2,001                 1,439

     Current portion of deferred gain on sale of real property                          87                   ---

     Floor plan and revolving lines of credit payable                               28,658                50,949

     Current portion of notes payable and other short term obligations               4,723                 1,025
     Notes payable classified as short term obligations                                ---                 6,436

                                                                              -------------         -------------
Total current liabilities                                                           37,727                63,971

     Deferred gain on sale of real property, net of current portion                    963                   ---
     Notes payable, less current portion                                             1,591                 3,225
     Convertible notes                                                               1,300                 1,300

Stockholders' equity:
   Series A Preferred stock, $100 par value, 1,000,000 shares                        8,000                 8,000
     authorized, 80,000 shares issued and outstanding at September
     30, 2003 and 2002, respectively
   Common stock, $.01 par value, 50,000,000 shares authorized, 4,299,727                43                    43
     and 4,329,727 shares issued and outstanding at September 30, 2003 and
     2002, respectively

    Paid-in capital                                                                 15,094                15,109

Retained earnings/(accumulated deficit)                                             (5,596)                3,784
                                                                              -------------         -------------

Total stockholders' equity                                                          17,541                26,936

                                                                              -------------         -------------
Total liabilities and stockholders' equity                                         $59,122               $95,432
                                                                              =============         =============
</TABLE>

See accompanying notes.


                                       F-4
<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                 Year ended September 30,
                                                                              2003         2002         2001
                                                                           ------------ ------------ ------------
<S>                                                                          <C>          <C>          <C>
Net sales................................................................    $140,715     $176,523     $198,539

Cost of sales............................................................     113,059      139,451      152,160
                                                                           ------------ ------------ ------------

Gross profit.............................................................      27,656       37,072       46,379

Selling, general and administrative expenses.............................      33,469       38,984       41,813
Depreciation and amortization............................................       2,441        2,474        2,906
                                                                           ------------ ------------ ------------
                                                                               35,910       41,458       44,719

Operating income/(loss)..................................................      (8,254)      (4,386)       1,660

Interest expense.........................................................      (3,281)      (4,018)      (6,533)

Other income/(expense)...................................................         103         (167)          43
                                                                           ------------ ------------ ------------

Loss before income taxes and cumulative effect of
      accounting change..................................................     (11,432)      (8,571)      (4,830)

Income tax (expense)/benefit.............................................       2,533       (1,693)       1,549
                                                                           ------------ ------------ ------------

Loss before cumulative effect of accounting change.......................      (8,899)     (10,264)      (3,281)

Cumulative effect of accounting change, net of taxes of $2,281...........         ---       (6,528)         ---

                                                                           ------------ ------------ ------------
     Net loss............................................................     $(8,899)    $(16,792)     $(3,281)
                                                                           ============ ============ ============

Preferred stock dividends................................................        (480)        (187)         ---
                                                                           ------------ ------------ ------------
     Net loss attributable to common shareholders........................     $(9,379)    $(16,979)     $(3,281)
                                                                           ============ ============ ============

Basic/Diluted loss per share:
     Loss before cumulative effect of accounting change
         and preferred stock dividends...................................      $(2.05)      $(2.36)       $(.75)
     Cumulative effect of accounting change, net of taxes................         ---        (1.50)         ---
     Preferred stock dividends...........................................        (.12)        (.05)         ---
                                                                           ------------ ------------ ------------
     Net loss attributable to common shareholders........................      $(2.17)      $(3.91)       $(.75)
                                                                           ============ ============ ============
</TABLE>


See accompanying notes.


                                      F-5
<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                                       Retained
                                                 Common                  Preferred          Paid-in    Earnings
                                            Shares      Amount       Shares       Amount    Capital    (deficit)     Total
                                         ------------ ---------- -------------- ----------- --------- ------------ ----------

<S>                                           <C>        <C>            <C>        <C>       <C>        <C>         <C>
Balance at September 30, 2000                 4,399      $   44         -----      $ ----    $15,464    $ 24,044    $39,552

     Repurchase and cancellation of
     common stock                               (40)      -----         -----       -----       (122)      -----       (122)

     Net loss                                 -----       -----         -----       -----      -----      (3,281)    (3,281)

                                         ------------ ---------- -------------- ----------- --------- ------------ ----------
Balance at September 30, 2001                 4,359          44         -----       -----     15,342      20,763     36,149
                                         ------------ ---------- -------------- ----------- --------- ------------ ----------

     Repurchase and cancellation of
     common stock                               (29)         (1)        -----       -----        (55)      -----        (56)
     Issuance  of Series A  preferred
     stock                                    -----       -----            80       8,000       (178)      -----      7,822
     Preferred stock dividends                -----       -----         -----       -----      -----        (187)      (187)
     Net loss                                 -----       -----         -----       -----      -----     (16,792)   (16,792)

                                         ------------ ---------- -------------- ----------- --------- ------------ ----------
Balance at September 30, 2002                 4,330      $   43            80       8,000     15,109       3,784     26,936
                                         ------------ ---------- -------------- ----------- --------- ------------ ----------

     Repurchase and cancellation of
     common stock                               (30)      -----         -----       -----        (15)      -----        (15)
     Preferred stock dividends                -----       -----         -----       -----      -----        (480)      (480)
     Net loss                                 -----       -----         -----       -----      -----      (8,899)    (8,899)

                                         ------------ ---------- -------------- ----------- --------- ------------ ----------
Balance at September 30, 2003                 4,300      $   43            80     $ 8,000   $ 15,094    $ (5,596)   $17,541
                                         ============ ========== ============== =========== ========= ============ ==========

</TABLE>

See accompanying notes.

                                      F-6

<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                  Year Ended September 30,
                                                                                 2003        2002        2001
                                                                             ------------ ---------- ------------
<S>                                                                           <C>         <C>           <C>
OPERATING ACTIVITIES

Net loss                                                                      $(8,899)    $(16,792)     $(3,281)

Adjustments to reconcile net loss to net cash
provided by operating activities:
     Depreciation                                                               2,011        2,016        2,018
     Amortization                                                                 430          458          888
     Disposal of assets from closed store locations                               294          ---          ---
     Cumulative effect of accounting change, net                                  ---        6,528          ---
     Deferred income taxes                                                        401          595         (320)
     Changes in operating assets and liabilities:
       Accounts receivable                                                      4,027        1,670          265
       Prepaid expenses                                                            95         (230)         144
       Inventories                                                             25,986        8,208       12,915
       Other assets                                                               182          (64)         (74)
       Accounts payable                                                        (1,865)      (1,753)       1,516
       Accrued liabilities                                                        562          236         (623)
       Income taxes recoverable/income tax payable                                210        2,995           43
                                                                             --------- ------------ -------------

Net cash provided by operating activities                                      23,434        3,867       13,491

INVESTING ACTIVITIES
Purchase of property and equipment                                               (480)      (1,063)      (1,495)
Proceeds from the sale of property and equipment                                3,365          ---          ---
                                                                             --------- ------------ -------------

Net cash provided by/ (used in) investing activities                            2,885      (1,063)       (1,495)

FINANCING ACTIVITIES
  Net increase (decrease) in notes payable and other short-term obligations   (26,663)     (8,818)      (13,457)
  Proceeds from issuance of convertible subordinated notes                        ---       4,300           ---
  Repayments of convertible subordinated notes                                    ---      (3,000)          ---
  Net proceeds from issuance of preferred stock                                   ---       7,822           ---
  Net payments for repurchase of common stock                                     (15)        (56)         (122)
  Preferred stock dividends                                                      (480)       (187)          ---
                                                                           --------------------------------------

  Net cash provided by (used in) financing activities                         (27,158)         61       (13,579)

  Change in cash and cash equivalents                                            (839)      2,865        (1,583)
  Cash and cash equivalents, beginning of year                                  4,253       1,388         2,971
                                                                           --------------------------------------

  Cash and cash equivalents, end of year                                       $3,414      $4,253        $1,388
                                                                           ======================================

</TABLE>

See accompanying notes.


                                      F-7
<PAGE>

                  Travis Boats & Motors, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements


1.   Basis of Presentation

Controlling Shareholder

     As of  January  7,  2003,  TMRC,  LLP,  ("Tracker"),  pursuant  to  certain
agreements for assistance in financing and other matters (the  "Agreements") has
assumed effective control of the Company.  Tracker and affiliated  entities have
operations in marine and outdoor lifestyle retail and manufacturing.  Tracker is
the manufacturer of various pleasure boatlines including:  Tracker, Mako, Nitro,
ProCraft, Fisher and numerous other popular models.

     Prior to the Agreements,  pursuant to its holding 80,000 shares of Series A
Preferred  Stock,  Tracker  beneficially  owned  approximately  43% or 3,252,825
shares of the Company's common stock on a fully-diluted,  as-converted basis. As
a result of the Agreements,  Tracker now has voting control of approximately 57%
or 4,611,119 shares on a fully-diluted, as-converted basis. Tracker also has the
right to designate  four of seven members of the  Company's  Board of Directors.
Tracker currently has two  representatives on the Board of Directors pursuant to
Tracker's  ownership of 80,000 shares of the Company's Series A Preferred Stock,
and has not yet designated two additional representatives.

     In fiscal 2003 we  purchased  approximately  $10.9  million or 15.6% of our
inventory from Tracker.

2.   Summary of Significant Accounting Policies

Description of Business

     Travis Boats & Motors,  Inc. (the "Company")  based in Austin,  Texas, is a
retailer of boats,  motors,  trailers and related  watersport  accessories.  The
Company operates, in one reportable segment, at locations in the southern region
of the United States.

Description of Consolidation

     The consolidated  financial  statements include the accounts of the Company
and its wholly-owned  subsidiaries.  All significant  intercompany  accounts and
transactions have been eliminated in consolidation.

Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Revenue Recognition

     The  Company  records  revenue  on sales of boats,  motors,  trailers,  and
related  watersport  parts and accessories upon delivery to or acceptance by the
customer at the closing of the  transaction.  The Company records  revenues from
service operations at the time repair or service work is completed.

     The Company refers  customers to various  financial  institutions to assist
the customers in obtaining financing for their boat purchase.  For each loan the
financial institutions are able to fund as a result of the referral, the Company
receives  a fee.  Revenue  earned by the  Company  for  financing  referrals  is
recognized when the related boat sale is recognized. The fee amount is generally
based on the loan  amount and the term.  Generally,  the  Company  must return a
portion of the fee amount  received if the customer  repays the loan or defaults
on the loan  within a period of up to 180 days from the initial  loan date.  The
Company records such refunds,  which are not significant,  in the month in which
they occur.


                                      F-8
<PAGE>

     Revenues from insurance and extended service agreements are recorded at the
time such  agreements are executed which  generally  coincides with the date the
boat,  motor and  trailer is  delivered.  Such  revenues  are not  deferred  and
amortized over the life of the insurance or extended service agreement policies,
because the  Company  sells such  policies  on behalf of third party  vendors or
administrators. At the time of sale, the Company records a fee for insurance and
extended  service  agreements  net  of the  related  fee  that  is  paid  to the
third-party  vendors or  administrators.  Since its  inception,  the Company has
incurred no additional costs related to insurance or extended service agreements
beyond the fees paid to the third party vendors at the time of sale.

Cash and Cash Equivalents

     The Company  considers all  investments  with  maturities of ninety days or
less when purchased to be cash equivalents.

Fair Value of Financial Instruments

     The carrying amount of the Company's financial instruments,  including cash
and cash equivalents,  accounts  receivable,  accounts payable and notes payable
approximates  fair value due to either their short-term nature or their variable
interest rate.

Accounts Receivable and Allowance for Doubtful Accounts

     Accounts  receivable  potentially  expose the Company to  concentrations of
credit risk, as defined by the Statement of Financial  Accounting  Standards No.
105,  Disclosure of Information  about Financial  Instruments  with  Off-Balance
Sheet Risk and Financial Instruments with Concentrations of Credit Risk.

     Accounts  receivables  consist  primarily  of  amounts  due from  financial
institutions  upon sales contract  funding,  amounts due from  manufacturers  or
vendors under rebate programs,  amounts due from  manufacturers or vendors under
warranty  programs  and amounts due from  customers  for  services.  The Company
routinely  evaluates  the  collectibility  of  accounts  receivable  focusing on
amounts due from  manufacturers,  vendors  and  customers.  If events  occur and
market  conditions  change,   causing  collectibility  of  outstanding  accounts
receivable to become unlikely,  the Company records an increase to its allowance
for doubtful  accounts.  The Company  evaluates the probability of collection of
outstanding  accounts  receivable based on several factors which include but are
not limited to the following: 1) age of the outstanding accounts receivable,  2)
financial condition of the manufacturer,  vendor or customer, and 3) discussions
or  correspondence  with the  manufacturer,  vendor  or  customer.  The  Company
determines  the  allowance  for  doubtful  accounts  based  upon  both  specific
identification and a general allowance for accounts  outstanding for a specified
period  of time.  The  Company  does not  require  or obtain  collateral  on its
accounts receivable.


                                      F-9
<PAGE>

     The accounts receivable balances consisted of the following (in thousands):

                                                    September 30,
                                                  2003          2002
                                             -----------------------------

Trade receivables                                   $ 3,119       $ 4,712
Amounts due from manufacturers/vendors                4,065         6,377
Other receivables                                       571           650
Allowance for doubtful accounts                      (2,100)       (2,058)
                                             -----------------------------
                                                     $5,655        $9,681
                                             =============================

Activity in the  Company's  allowance  for  doubtful  accounts is as follows (in
thousands):



Balance at September 30, 2000                                              $278
                                                                   -------------
     Additions charged to costs and expenses                                479
     Write-offs of uncollectible accounts                                  (230)

--------------------------------------------------------------------------------

Balance at September 30, 2001                                               527
                                                                   -------------
     Additions charged to costs and expenses                              2,030
     Write-offs of uncollectible accounts                                  (499)

--------------------------------------------------------------------------------

Balance at September 30, 2002                                             2,058
                                                                   -------------
     Additions charged to costs and expenses                              1,301
     Write-offs of uncollectible accounts                                (1,259)

                                                                   -------------
Balance at September 30, 2003                                            $2,100
                                                                   =============


Inventories

     Inventories consist of boats, motors, trailers and related watersport parts
and  accessories.  Inventories are carried at the lower of cost or market.  Cost
for boats,  motors and trailers is determined using the specific  identification
method.  Cost for parts  and  accessories  is  determined  using  the  first-in,
first-out  method.  If the carrying amount of inventory  exceeds its fair value,
such  inventory  is  written  down  to its  fair  value.  The  Company  utilizes
historical  experience  and current  sales  trends as the basis for its lower of
cost or market  analysis.  Changes in market  conditions,  lower  than  expected
customer demand,  closing of additional store locations and changing  technology
or features could result in additional  obsolete inventory that is unsaleable or
only  saleable at reduced  prices,  which  could  require  additional  inventory
reserve provisions.

     Additional events and market conditions  include but are not limited to the
following: 1) deteriorating financial condition of the manufacturer resulting in
discontinuance and lack of manufacturer's  warranty for certain boats, motors or
other products,  2) introduction of new models or product lines by manufacturers
resulting  in less  demand  for  previous  models or product  lines,  3) Company
initiatives  to promote  unit sales and reduce  inventory  levels for new and/or
used  inventory by reducing  sales prices,  and 4) Competing  boat  retailers in
various markets in which the Company operates may offer sales incentives such as
price reductions.


                                      F-10
<PAGE>

Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                    September 30,
                                                              2003                 2002
                                                          -------------       ---------------

<S>                                                            <C>                   <C>
New boats, motors and trailers                                 $23,227               $47,120

Used boats, motors and trailers                                  2,892                 5,071

Parts, accessories and other                                     5,405                 6,179

Valuation allowance                                               (554)               (1,413)
                                                          -------------       ---------------

                                                               $30,970               $56,957
                                                          =============       ===============
</TABLE>


Activity  in the  Company's  inventory  valuation  allowance  is as follows  (in
thousands):

Balance at September 30, 2000                                              $417
                                                                   -------------
     Additions charged to costs and expenses                                155
     Inventory write-offs                                                   (88)

Balance at September 30, 2001                                               484
                                                                   -------------
     Additions charged to costs and expenses                                956
     Inventory write-offs                                                   (27)

Balance at September 30, 2002                                             1,413
                                                                   -------------
     Additions charged to costs and expenses                                189
     Reduction of reserve due to inventory sold                          (1,048)
                                                                   -------------
Balance at September 30, 2003                                              $554
                                                                   =============


Property and Equipment

     Property and equipment are stated at cost.  Provisions for depreciation are
determined  using the  straight-line  method.  The Company uses estimated useful
lives  of 5 - 20 years  for  buildings  and  improvements  and 5 - 10 years  for
furniture, fixtures and equipment.

     In  September  2003,  the  Company  consummated  the  sale  and  concurrent
leaseback  ("sale/leasebacks")  of the land and  buildings  of two of its  store
locations. The properties were sold at a collective sales price of approximately
$3.3  million  and leased back by the  Company  pursuant to long term  operating
leases.  The gain of approximately  $1.1 million  resulting from the sale of the
properties has been classified as a Deferred Gain and will be amortized  ratably
over the lease period which is approximately 10 years.

Income Taxes

     In accordance  with  Statement of Financial  Accounting  Standards No. 109,
Accounting  for Income Taxes,  deferred  income taxes are provided for temporary
differences  between the basis of assets and liabilities for financial reporting
purposes and for income tax return purposes. The Company routinely evaluates its
recorded  deferred  tax assets to  determine  whether it is more likely than not
that such  deferred  tax  assets  will be  realized.  During the  quarter  ended
September  30, 2002,  the Company  determined  that for deferred tax assets that
could not be  realized by  carryback  to prior tax years it was more likely than
not that such  deferred tax assets would not be realized and  accordingly a full
valuation  allowance has been recorded for these  deferred tax assets since that
time.


                                      F-11
<PAGE>

Impairment of Long-lived Assets

     Long-lived   assets  consist   primarily  of  property  and  equipment  and
intangible  assets.  Property  and  equipment  and other  intangible  assets are
carried  on  the  Company's  financial  statements  based  on  their  cost  less
accumulated  depreciation or amortization.  The Company  evaluates  property and
equipment  and  other  intangible  assets  held  and  used  by the  Company  for
impairment  whenever events or changes in circumstances  indicate that their net
book value may not be recoverable.  When such factors and  circumstances  exist,
the Company  compares the projected  undiscounted  future cash flows  associated
with the  future use and  disposal  of the  related  asset or group of assets to
their respective carrying amounts. Impairment, if any, is measured as the excess
of the  carrying  amount  over  the  fair  value,  based on  market  value  when
available,  or discounted expected cash flows of those assets and is recorded in
the period in which the determination is made.

Goodwill and Identifiable Intangible Assets

     Amounts  assigned to intangible  assets are amortized  over the  respective
estimated useful lives using the straight-line method as follows:

Noncompete agreements -- 7 years   Goodwill -- 25 years (prior to fiscal 2002)

     The Company  adopted  SFAS No. 142,  Goodwill and Other  Intangible  Assets
("SFAS  142")  effective  October  1, 2001.  SFAS 142  provides  that  separable
intangible  assets that have finite  lives will  continue to be  amortized  over
their useful lives and that goodwill and indefinite-lived intangible assets will
no longer be amortized  but will be reviewed for  impairment  annually,  or more
frequently if impairment indicators arise. The Company operates as one reporting
unit for goodwill impairment testing.

Significant Suppliers

     The  Company  has  historically  purchased  substantially  all of  its  new
outboard motors for use on its Travis Edition boat packages from a limited group
of  manufacturers.  During the 2003,  2002 and 2001 fiscal  years this  included
outboard motors  purchased from American Suzuki Motor  Corporation and Brunswick
Corporation.

     Approximately  25%, 36% and 42% of the  Company's  net  purchases in fiscal
2003, 2002 and 2001, respectively,  were manufactured by boat suppliers owned by
Genmar Holdings.

     Approximately  16% of the  Company's net purchases in fiscal 2003 were from
Tracker. (See Note 1 - Basis of Presentation)

Advertising Costs

     Advertising   costs  are  expensed  as  incurred  and  were   approximately
$1,494,000, 1,435,000 and $2,295,000 during the fiscal years ended September 30,
2003, 2002 and 2001, respectively.

Stock Based Compensation

     The Company accounts for its employee  stock-based  compensation  using the
intrinsic value method in accordance with  Accounting  Principles  Board Opinion
No. 25, Accounting for Stock Issued to Employees,  and related  Interpretations.
The Company makes disclosures regarding employee stock-based  compensation using
the fair value method in  accordance  with  Statement  of  Financial  Accounting
Standards  ("Statement")  123,  Accounting  for  Stock-Based  Compensation.  The
Company has calculated the fair value of options  granted in these periods using
the Black-Scholes  option-pricing  model and has determined the pro forma impact
on net loss.


                                      F-12
<PAGE>

     The following  table  illustrates the effect on net loss and loss per share
if the Company had applied the fair value  recognition  provisions  of Statement
123 to stock-based compensation for all periods presented (in thousands,  except
per share data)

<TABLE>
<CAPTION>
                                                                          Year Ended September 30,
                                                                         2003         2002        2001
                                                                    --------------------------------------

<S>                                                                   <C>         <C>           <C>
Net loss attributable to common shareholders as
     Reported (000's)                                                 $ (9,379)   $ (16,979)    $ (3,281)
Add: Total stock based employee compensation
     expense included in the determination of net
     loss as reported, net of related tax effects                          ---          ---          ---
Less: Total stock based employee compensation
     expense determined under the fair value
     methods for all awards, net of related tax effects                   (158)        (315)    $   (179)
                                                                    --------------------------------------

Proforma net loss attributable to common shareholders                 $ (9,537)   $ (17,294)    $ (3,460)
                                                                    --------------------------------------

Basic and Diluted Loss Per Share
Reported net loss per share attributable to common
     shareholders                                                     $  (2.17)   $   (3.91)    $   (.75)
Proforma net loss per share attributable to common
     shareholders                                                     $  (2.21)   $   (3.98)    $   (.79)

</TABLE>

The  compensation  expense  associated  with  the  fair  value  of  the  options
calculated  in  2003,  2002 and 2001 is not  necessarily  representative  of the
potential effects on reported net income/(loss) in future years.

Reclassifications

     Certain  amounts  in the 2002  and  2001  financial  statements  have  been
reclassified  to  conform  with  the   classifications  in  the  2003  financial
statements  with no  effect on  previously  reported  net loss or  stockholders'
equity.

New Accounting Standards

     In November 2002, the Emerging  Issues Task Force ("EITF") of the Financial
Accounting Standards Board reached a consensus on issue No. 02-16, Accounting by
a Reseller for Cash Consideration Received from a Vendor. EITF 02-16 establishes
the  accounting   standards  for  the   recognition   and  measurement  of  cash
consideration  paid by a vendor  to a  reseller.  EITF  02-16 is  effective  for
interim period  financial  statements  beginning  after December 15, 2002,  with
early adoption permitted. There was no material impact from the adoption of this
Statement on January 1, 2003.

     In  November  2002,  the  Emerging  Issues  Task Force  ("EITF")  reached a
consensus on Issue No. 00-21, Revenue  Arrangements with Multiple  Deliverables.
EITF 00-21 provides guidance on how to account for arrangements that involve the
delivery or  performance  of multiple  products,  services  and/or rights to use
assets. The provisions of EITF 00-21 will apply to revenue  arrangements entered
into in fiscal periods beginning after June 15, 2003. Management does not expect
the adoption of EITF 00-21 to have a material impact on the Company's  financial
position, results of operations or cash flows.

     In December 2002, the FASB issued Statement 148, Accounting for Stock-Based
Compensation,  Transition  and  Disclosure.  Statement 148 provides  alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based  employee  compensation.  Statement 148 also requires
that  disclosures  of the pro forma  effect of using  the fair  value  method of
accounting for stock-based  employee  compensation be displayed more prominently
and in a tabular format. Additionally,  Statement 148 requires disclosure of the
pro forma effect in interim financial statements. The Company adopted the annual
disclosure  requirements  of Statement 148, which are effective for fiscal years


                                      F-13
<PAGE>

ending  after  December 15, 2002 and elected to continue to account for employee
stock  options  under  APB No.  25.  The  interim  disclosure  requirements  are
effective for interim periods  commencing  after December 15, 2002. The adoption
of this standard had no effect on the Company's financial  position,  results of
operations or cash flows.

     In January  2003,  the FASB issued FASB  Interpretation  No. 46, or FIN 46,
Consolidation of Variable  Interest  Entities,  an Interpretation of ARB No. 51.
FIN 46 requires  certain  variable  interest  entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to  February  1, 2003,  the  provisions  of FIN 46 must be applied for the first
interim  or annual  period  beginning  after  June 15,  2003.  We do not  expect
adoption of FIN 46 to have a material impact on our financial position,  results
of operations or cash flows.

     In May  2003,  the  FASB  issued  Statement  150,  Accounting  for  Certain
Financial  Instruments  with  Characteristics  of both  Liabilities  and Equity.
Statement 150 requires that certain  financial  instruments  that are settled in
cash,  including  certain  types  of  mandatorily  redeemable   securities,   be
classified as liabilities  rather than as equity or temporary equity.  Statement
150 is effective for financial  instruments  entered into or modified  after May
31, 2003,  and  otherwise is  effective  at the  beginning of the first  interim
period after June 15, 2003. Management does not expect the adoption of Statement
150 to have a material effect on the Company's  financial  position,  results of
operations or cash flows.

3.   Loss Per Share

<TABLE>
<CAPTION>
                                                                                  Year ended September 30,
                                                                               2003          2002        2001
                                                                           --------------------------------------
                                                                           (in thousands, except per share data)

<S>                                                                          <C>          <C>          <C>
Numerator:
     Net loss before cumulative effect of accounting
       change and preferred stock dividends.............................     $ (8,899)    $ (10,264)   $ (3,281)
     Cumulative effect of accounting change, net of tax.................           --        (6,528)         --
     Preferred stock dividends..........................................         (480)         (187)         --
                                                                          ------------ ------------- -------------
     Net loss attributable to common shareholders.......................     $ (9,379)    $ (16,979)   $ (3,281)
                                                                          ============ ============= =============

Weighted average basic and diluted common shares
     outstanding........................................................        4,320         4,345       4,375
                                                                          ============ ============= =============

Basic and Diluted loss per share before cumulative effect
     of accounting change and preferred stock dividends.................     $  (2.05)    $   (2.36)   $   (.75)
     Cumulative effect of accounting change, net of tax.................           --         (1.50)         --
     Preferred stock dividends..........................................         (.12)         (.05)         --
                                                                          ------------ ------------- -------------
Basic and Diluted loss per share attributable to
     common shareholders................................................     $  (2.17)    $   (3.91)   $   (.75)
                                                                          ============ ============= =============

</TABLE>


                                      F-14
<PAGE>

     Options to purchase the following shares of common stock were excluded from
the  computation of diluted EPS for the years ended September 30, 2003, 2002 and
2001 as such  shares  would be  anti-dilutive  since the  exercise  price of the
options was greater than the average market price of the Company's  common stock
during the respective fiscal year.

<TABLE>
<CAPTION>
       Fiscal Year         Excluded Options            Weighted Average       Weighted Average Contractual
                                                       Exercises Prices              Life in Years
-------------------------- ------------------------ ------------------------ -------------------------------
          <S>                      <C>                      <C>                           <C>
          2003                      61,100                  $ 6.47                        6.59
          2002                     311,298                  $ 5.14                        6.09
          2001                     404,964                  $ 6.80                        6.67

</TABLE>

The Company also has excluded  the  inclusion of 528,584  shares of common stock
subject  to  issuance  pursuant  to  $1.3  million  in  outstanding  convertible
subordinated  notes and  3,252,826  shares of common  stock  subject to issuance
pursuant to 80,000 shares of Series A Preferred Stock. For the fiscal year ended
September 30, 2003, the  conversion  price of  approximately  $2.46 per share of
both issuances exceeded the Company's average market price of its common stock.

4.   Goodwill and Other Intangibles

     The Company  adopted  SFAS No. 142,  Goodwill and Other  Intangible  Assets
("SFAS  142")  effective  October  1, 2001.  SFAS 142  provides  that  separable
intangible  assets that have finite  lives will  continue to be  amortized  over
their useful lives and that goodwill and indefinite-lived intangible assets will
no longer be amortized  but will be reviewed for  impairment  annually,  or more
frequently if impairment indicators arise. The Company operates as one reporting
unit for goodwill impairment testing.

     In  accordance  with SFAS 142, the Company  completed  goodwill  impairment
tests as required.  The tests involved the use of estimates  related to the fair
value of the business with which the goodwill is associated.  As a result of the
transitional impairment test, which considered factors including the significant
negative  industry and economic  trends  impacting  current  operations  and the
Company's  market  capitalization  relative to its net book  value,  the Company
recorded a non-cash,  after tax charge of $6.5  million  (charge of $8.8 million
less tax effect of $2.3 million) as a cumulative  effect of accounting change as
of October 1, 2001. The non-cash,  after tax charge  resulted in the elimination
of the entire goodwill balance from the Company's balance sheet.

     Net loss and loss per basic and  diluted  share for the fiscal  years ended
September 30, 2003,  2002 and 2001 adjusted to exclude  amortization  expense of
goodwill (net of income taxes) is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                        Fiscal Year  Ended
                                                                           September 30,
                                                                 2003          2002           2001
                                                             -----------    ----------     ----------

<S>                                                           <C>            <C>             <C>
Net loss attributable to common shareholders.............     $  (9,379)     $ (16,979)      $ (3,281)
Cumulative effect of accounting change, net..............           --           6,528            --
Goodwill amortization, net...............................           --             --             259
                                                             -----------    -----------     ----------
Adjusted net loss attributable to common shareholders....     $  (9,379)     $ (10,451)      $ (3,022)
                                                             ===========    ===========     ==========

Loss per share
   Basic and Diluted:
Reported net loss attributable to common shareholders....     $   (2.17)     $   (3.91)      $  (0.75)
   Cumulative effect of accounting change................           --            1.50            --
   Goodwill amortization, net of tax.....................           --             --            0.06
                                                             -----------    -----------     ----------
Adjusted net loss attributable to common shareholders....     $   (2.17)     $   (2.41)      $  (0.69)
                                                             ===========    ===========     ==========

</TABLE>

     In addition,  the intangible asset  established for non-compete  agreements
remains  subject to amortization in accordance with SFAS 141. The gross carrying
amount  related to non-compete  agreements  was $3,210,000  while the associated
accumulated   amortization  balance  at  September  30,  2003,  2002  and  2001,
respectively,  was  $2,479,000,  2,061,000  and  $1,603,000,  respectively.  The


                                      F-15
<PAGE>

aggregate amortization expense on non-compete agreements was $418,000,  $464,000
and  $410,000  for the fiscal years ended  September  30,  2003,  2002 and 2001,
respectively.  Estimated  amortization expense for the next four fiscal years is
approximately  $385,000 in 2004;  $235,000  in 2005,  $111,000 in 2006 and $0 in
2007.

5.   Notes Payable and Other Short-Term Obligations

     We  finance  substantially  all  of our  inventory  pursuant  to  borrowing
agreements  with two commercial  finance  companies --  Transamerica  Commercial
Finance Corporation ("TCFC") and GE Commercial  Distribution Finance Corporation
("GE") (formerly known as Deutsche Financial Services Corporation ("DFS")).  The
agreements contain  substantially  similar terms and financial covenants.  As of
September 30, 2003, the maximum aggregate borrowing  availability was limited to
a maximum  credit limit of $55.5  million at various  prime based or LIBOR based
interest rates (varying from 4.12% to 4.75%) and approximately $28.7 million was
outstanding.  The  borrowing  agreements  are  primarily  for  the  purchase  of
inventories  and do not provide  available  amounts for general  working capital
requirements.  Based on the terms of the  borrowing  agreements we could request
for the  lenders to advance  funds to  manufacturers  for  additional  inventory
purchases up to the remaining  available credit limit. As we purchase inventory,
we authorize our lenders to remit payment directly to the manufacturers pursuant
to our borrowing agreements.  Substantially all inventory,  accounts receivable,
furniture, fixtures, equipment, real estate (junior liens) and intangible assets
collateralize these borrowing agreements.  The terms of the borrowing agreements
also provide for fees for administrative  monitoring and for any unused portions
of available credit. Also, various  manufacturers provide us or our lenders with
interest expense assistance under the inventory borrowing agreements in order to
subsidize the carrying cost of inventory.  Accordingly,  no interest  expense is
recorded during portions of the year (generally  August through May) for certain
limited  borrowings under these  agreements.  Discontinuance of these agreements
could result in an increase to interest  expense.  Acquisitions,  the payment of
common stock dividends or repurchases of our common stock are also substantially
limited without prior consent.

     The borrowing  agreements,  which originated in fiscal 2000, expired during
fiscal 2003 and were subsequently  renewed through October 15, 2003 pending each
lender's  review of our request for a 12 month  renewal  term. As of the date of
this Report on Form 10-K,  we have been notified by each lender that our request
has been reviewed and subject to  appropriate  documentation  our new expiration
date will be in October 2004. The renewed  borrowing  agreements are expected to
include  loan  agreements   containing  various  loan  covenants  and  borrowing
restrictions,  including, but not limited to, minimum financial ratios governing
net worth,  inventory turn,  accounts  receivable turn and percentage  levels of
operating  expenses.  (See Note 13 -  "Subsequent  Events"  in the  consolidated
audited financial statements of the Company and notes thereto included elsewhere
in this Report on Form 10-K).

5.   Notes Payable and Other Short-Term Obligations (continued)

     The weighted  average  interest rate on the borrowing  arrangements and the
floor plan payables  outstanding  as of September 30, 2003 and 2002 was 4.4% and
4.9%, respectively.


                                      F-16
<PAGE>

     Notes payable and other short-term obligations consist of the following (in
thousands, except per share amounts and payment amount/terms in Summary Data):

<TABLE>
<CAPTION>
                                                                                   September 30,
                                                                                 2003        2002
                                                                              ----------- -----------

<S>                                                                             <C>         <C>
Short term notes payable to commercial  finance  companies  under
revolving and floor plan line of credit agreements with interest
ranging from 0% to the rate of 4.82% with maturity at October 2003.             $ 28,658    $ 50,949

Notes payable (see summary data below)                                             7,614      11,986
                                                                              ----------- -----------
Total notes payable and other short-term obligations                              36,272      62,935
                                                                              ----------- -----------
Less revolving and floor plan credit agreements                                  (28,658)    (50,949)
Less real estate notes with balloon payments                                      (4,412)       (529)
Less real estate notes classified as current                                        ----      (6,436)
Less current portion of notes payable                                               (311)       (496)
                                                                              ----------- -----------
                                                                                 (33,381)    (58,410)
                                                                              ----------- -----------
Total notes payable, less current portion                                       $  2,891    $  4,525
                                                                              =========== ===========

Notes Payable Summary Data
Mortgage notes payable to various banks,  organizations and individuals
secured by deeds of trust  with  interest  ranging  from 6.0% to 12.0%,
due in  monthly principal and interest installments ranging from $1,899
to $52,000, maturing beginning in December 2003.                                $  6,029    $ 10,160

Notes payable to various banks,  finance companies and a corporation
secured by certain  vehicles,  equipment and leasehold  improvements with
interest ranging from 3.99% to 11.0%, due in monthly principal and interest
installments ranging from $209 to $3,106, maturing beginning in June 2004.           207         304

Acquisition  related notes payable to individuals and corporations with
interest ranging from 7.5% to 8.75%, due in monthly  principal and interest
installments ranging from $2,587 to $12,770, maturing beginning in April
2005.  These notes are unsecured.                                                     78         222

Convertible notes payable in varying amounts to certain officers,  directors
and other  individuals with interest rates of 10.75%,  fixed.  Payments are
interest only until maturity in  December 2004.  The notes are subordinated
in substantially  all respects to the commercial finance companies providing
the Company's revolving and floor plan financing. At any time prior to
maturity, the notes may be converted into the Company's common stock at a
conversion price of $2.4594 per share.                                             1,300       1,300
                                                                              ----------- -----------
Total notes payable                                                             $  7,614    $ 11,986
                                                                              =========== ===========

</TABLE>


5.   Notes Payable and Other Short-Term Obligations (continued)

     At September 30, 2003 and 2002,  approximately 80.6% and 89.6% respectively
of the Company's notes payable and other short-term obligations bear interest at
variable  rates,  generally  tied to a reference  rate such as the prime rate of
interest of certain banks.  Accordingly,  the Company believes that the carrying
amount of the notes payables and other short term obligations approximates their
fair value.

     Interest paid approximates interest expense during 2003, 2002 and 2001.


                                      F-17
<PAGE>

     Aggregate annual maturities required on notes payable at September 30, 2003
are as follows (in thousands):

Year Ending September 30
---------------------------------------
2004                                              $4,723 (1)
2005                                               1,579
2006                                                 686
2007                                                 419
2008                                                  80
Thereafter                                           127

                                        -------------------
                                                  $7,614
                                        ===================

(1)  Includes a $3.7  million  real estate loan with a maturity of December  31,
2003,  that  subsequent  to  September  30,  2003  was  refinanced  on a 3  year
promissory note with another lender. (see Note 13 - "Subsequent Events")

6.   Fee on Repayment of Subordinated Debt

     The Company recorded an expense of $206,000, on the June 10, 2002 repayment
of the $3.0 million convertible  subordinated  promissory note originally issued
on  December  14,  2001  (see  Note 9).  This  expense  was the  result  of a 5%
prepayment fee paid on the outstanding  principal balance of $3.0 million,  plus
the expensing of the legal and  consulting  fees that were  attributable  to the
$3.0 million note.

     In April 2002, the FASB issued SFAS No. 145,  Recission of FASB  Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
("SFAS 145").  The new statement  provides new guidance for debt  extinguishment
transactions  that are part of an  entity's  recurring  operations.  SFAS 145 is
effective  for fiscal  years  beginning  after May 15,  2002.  As a result,  the
Company  reclassified the debt  extinguishment  transactions from  extraordinary
items. These costs are now included within other income/expense in the statement
of operations with the tax benefit adjusted to reflect the reclassification.

7.   Leases

     The Company leases various retail  facilities,  dock space,  vehicles,  and
computer  software  under  third  party  operating  leases.   Rent  expense  was
approximately $3,241,000 in 2003, $3,441,000 in 2002 and $3,841,000 in 2001.

     Future minimum payments under non-cancelable  operating leases at September
30,  2003  are  as  follows  for  each  of the  years  ending  September  30 (in
thousands):

                  Year Ending September 30
                  -------------------------------
                  2004                                           $2,781
                  2005                                            2,262
                  2006                                            1,835
                  2007                                            1,290
                  2008                                              815
                  Thereafter                                      2,148

     Generally,  the leases for  facilities  provide  for  renewals  for various
periods at stipulated rates.


                                      F-18
<PAGE>

8.   Income Taxes

<TABLE>
<CAPTION>
                                                                                Tax year ended December 31,
                                                                                2003          2002        2001
                                                                           --------------------------------------
                                                                           (in thousands)

<S>                                                                         <C>           <C>          <C>
Current expense/(benefit)
    Federal............................................................     $ (0,000)     $  (1,087)   $ (1,100)
    State..............................................................           --            (96)       (129)
                                                                          ------------ ------------- -------------
Total current expense/(benefit)........................................     $ (0,000)     $  (1,183)   $ (1,229)
                                                                          ============ ============= =============

Deferred expense/(benefit)
    Federal............................................................     $  (0.00)     $     547    $   (320)
    State..............................................................           --             48          --
                                                                          ------------ ------------- -------------
Total provision/(benefit) for income taxes.............................     $  (0.00)     $    (588)   $ (1,549)
                                                                          ============ ============= =============

</TABLE>

The  Company's  provision for income taxes differs from the expected tax expense
(benefit)  amount computed by applying the statutory  federal income tax rate of
34% to income before taxes due to the following:

<TABLE>
<CAPTION>
                                                                                 Year ended September 30,
                                                                               2003          2002        2001
                                                                            --------------------------------------
                                                                            (in thousands)
   <S>                                                                        <C>          <C>         <C>
   Federal statutory rate..............................................       $ (0,000)    $ (5,909)   $ (1,642)
   State taxes, net of federal benefit.................................            --          (454)       (129)
   Other...............................................................            --         1,176         222
   Valuation allowance.................................................            --         4,599         ---
                                                                          ------------ ------------- -------------
                                                                              $ (0,000)    $   (588)   $ (1,549)
                                                                          ============ ============= =============

</TABLE>

                                      F-19
<PAGE>

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred taxes are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                    September 30,
                                                                2003          2002
                                                           -----------------------------
<S>                                                           <C>            <C>
Deferred tax assets:
   Book over tax depreciation/amortization                    $ 000          $3,582
   Reserve and allowances                                       000           1,017
                                                           -----------------------------
Net deferred tax assets                                         000           4,599
Valuation allowance for net deferred tax assets                (000)         (4,599)
                                                           -----------------------------
   Net deferred taxes                                         $ ---          $  ---
                                                           =============================
</TABLE>

The Company has established a valuation  allowance equal to the net deferred tax
asset due to  uncertainties  regarding  the  realization  of deferred tax assets
against   future  taxable   income.   The  valuation   allowance   increased  by
approximately  $___ and $4.6 million during the fiscal years ended September 30,
2003 and 2002, respectively.

Income  taxes   received   were   approximately   ($  000),   ($1,500,000)   and
($1,200,000)in  the fiscal  years ended  September  30,  2003,  2002,  and 2001,
respectively.

9.   Stockholders' Equity

CONVERTIBLE SUBORDINATED NOTES

     Effective  December 14, 2001, the Company issued  Convertible  Subordinated
Notes (the "Notes") in an aggregate amount of $4,300,000 issued in the form of a
$3.0 million Note plus other Notes in the aggregate amount of $1.3 million.  The
Notes are unsecured with a term of 36 months and have rates ranging from prime +
2%,  adjusted  quarterly to 10.75%,  fixed.  The principal and interest  amounts
payable pursuant to the Notes are  subordinated,  in substantially all respects,
to the Company's  borrowing  agreements  with the commercial  finance  companies
providing inventory and working capital financing for the Company. The Notes are
redeemable by the Company, and if not redeemed the principal amount of the Notes
may be converted by the holders into the Company's  common stock at a conversion
price of approximately $2.46 per share.

     On June 10, 2002,  the Company,  prepaid in full,  the  principal  balance,
accrued  interest and the required 5%  prepayment  fee to the holder of the $3.0
million Note.  The proceeds for repayment of the $3.0 million Note were received
pursuant to the preferred stock transaction described below.

SERIES A PREFERRED STOCK

     On June 13, 2002, the Company  entered into an agreement with TMRC,  L.L.P.
("Tracker"),  a  wholly-owned  subsidiary of Tracker  Marine,  L.L.C.,  to issue
Tracker  50,000  shares  of newly  created  6% Series A  Cumulative  Convertible
Preferred Stock (the "Preferred Stock") in the Company. The Company also granted
Tracker a warrant (the  "Warrant") to acquire  30,000  additional  shares of the
Preferred Stock. The issue price of the Preferred Stock was $100 per share. Each
share may be converted into the Company's  common stock at a conversion price of
approximately $2.46 per share.

     Prior to June 30, 2002, Tracker funded $5,000,000 to purchase 50,000 shares
of the Preferred Stock.  Tracker also exercised the Warrant and purchased 30,000
shares issued thereto for an additional $3,000,000. Pursuant to the requirements
of the Warrant,  the proceeds from the exercise  ($3.0 million) were used to pay
off the $3.0 million Note described above.


                                      F-20
<PAGE>

INCENTIVE STOCK OPTION PLAN

     The  Company  has  an  Incentive  Stock  Option  Plan  (the  "Plan")  which
originally  provided for the issuance of up to 200,000  shares of the  Company's
common  stock.  The Plan provides for the granting of options  (incentive  stock
options or non-statutory),  stock  appreciation  rights and restricted shares to
officers,  key  employees,  non-employee  directors and  consultants to purchase
shares of the Company's common stock. No stock appreciation rights or restricted
shares have been issued under the Plan.  Options vest generally over a five year
period and expire in ten years from the date of grant.

     In March 1998,  the Company  amended the Plan to provide that the aggregate
number of shares of common stock that may be issued or  transferred  pursuant to
awards under the Plan shall increase automatically  effective on April 1 of each
calendar  year for the  duration  of the Plan so that the  aggregate  number  of
shares of common  stock  that may be issued or  transferred  pursuant  to awards
under  the Plan is equal to 10% of the total  number  of shares of common  stock
issued and outstanding on April 1 of that year.

     Notwithstanding  this  provision,  the  amendment  provides  that  (i)  the
aggregate  number of shares of common  stock  that may be issued or  transferred
pursuant  to awards  under the Plan  shall not be reduced in the event the total
number of shares  issued  and  outstanding  decreases  in any year,  or (ii) the
aggregate  number of shares of common  stock  that may be issued or  transferred
pursuant to awards  under the Plan shall not exceed  1,000,000  shares of common
stock over the life of the Plan.

Total option activity for the years ended September 30, 2003, 2002 and 2001:

<TABLE>
<CAPTION>
                                           Number of Shares     Range of Exercise Prices   Wtd Avg Exercise Price
                                         -------------------- -------------------------- ---------------------------
<S>                                                 <C>                <C>                         <C>
Outstanding at September 30, 2000                    391,131           $3.8125 - $22.50            $ 9.20
                                         --------------------
     Granted                                          82,333           $2.70 - $4.00               $ 3.07
     Exercised                                           ---                  ---                     ---
     Forfeited/Cancelled                             (68,500)          $4.00 - $22.50              $16.00

Outstanding at September 30, 2001                    404,964           $2.70 - $22.375             $ 6.80
                                         --------------------
     Granted                                          40,000           $2.45 - $2.50               $ 2.49
     Exercised                                           ---                  ---                     ---
     Forfeited/Cancelled                            (133,666)          $2.70 - $20.00              $ 9.38

Outstanding at September 30, 2002                    311,298           $2.45 - $22.375             $ 5.14
                                         --------------------
     Granted                                             ---                  ---                     ---
     Exercised                                           ---                  ---                     ---
     Forfeited/Cancelled                            (250,198)          $2.50 - $15.00              $ 4.82
                                         --------------------
Outstanding at September 30, 2003                     61,100           $2.45 - $22.375             $ 6.47
                                         ====================

                                         --------------------
Exercisable at September 30, 2003                     47,500           $2.45 - $22.375             $ 7.27
                                         ====================

Options available for grant at
September 30, 2003                                   371,873
                                          ===================
Common stock reserved for issuance
At September 30, 2003                                432,973
                                          ===================
</TABLE>

     The weighted-average remaining contractual life of options at September 30,
2003 and 2002 is approximately 6.59 years and 6.09 years, respectively.


                                      F-21
<PAGE>

Options outstanding at September 30, 2003, are comprised of the following:

<TABLE>
<CAPTION>
                     Outstanding                                                     Exercisable
-------------------------------------------------------------------------------------------------------------
                                                           Weighted
                        Weighted         Weighted           Average
 Range of Exercise       Average          Average         Contractual         Weighted
       Prices            Options      Exercise Prices    Life in Years     Average Options   Exercise Price
--------------------- --------------- ----------------- ----------------- ----------------- -----------------

    <S>                       <C>               <C>                 <C>             <C>               <C>
       $2.45 - $4.00          22,000             $3.17              7.93            10,400             $3.60
       $5.75 - $5.75          21,500             $5.75              6.55            21,500             $5.75
     $8.875 - $10.00          13,600             $9.08              5.12            11,600             $9.12
    $15.00 - $22.375           4,000            $19.61              4.47             4,000            $19.61
--------------------- --------------- ----------------- ----------------- ----------------- -----------------
     $2.45 - $22.375          61,100             $6.47              6.59            47,500             $7.27

</TABLE>

     The assumptions used by the Company to determine the pro forma  information
regarding  net loss and loss per share  required  by  Statement  No.  123 are as
follows using the Black-Scholes model:

                                             Year Ended September 30,
                                         2003          2002          2001
                                    --------------------------------------------
                                    --------------------------------------------

Risk-free interest rate                      3.00%         3.00%          3.00%
Dividend yield                                  0%            0%             0%
Expected life                              5 years       5 years        5 years
Volatility                                   94.7%         67.7%          65.2%


10.  Common Stock Repurchase Program

     During  fiscal  2000,  the  Company  established  a program  to  repurchase
outstanding shares of its common stock in the open market from time to time. The
Company has made  purchases of its common stock pursuant to this program and has
retired all such common shares  repurchased.  Repurchased shares of common stock
consisted of the following:

                                               Year Ended September 30,
                                            2003         2002        2001
                                        ---------------------------------------
                                        ---------------------------------------

Shares Repurchased (000's)                         30          29           40
Total Purchase Price (000's)                      $15         $56         $122
Average Price per Share                         $0.50       $1.90        $3.07


                                      F-22
<PAGE>

11.  Commitments and Contingencies

     From time to time, our Company is involved in litigation relating to claims
arising  from its  normal  business  operations.  Currently,  our  Company  is a
defendant in several lawsuits.

     In January 2003, the Company received notice of a lawsuit filed in the U.S.
Bankruptcy  Court  for the  Northern  District  of  Illinois  on  behalf  of the
bankruptcy  estate for  Outboard  Marine  Corporation  ("OMC").  The Company has
denied the  allegations in this lawsuit and finds them without merit.  OMC was a
primary supplier of outboard engines to our Company prior to OMC's bankruptcy in
December of 2000. The suit alleges that the Company  received  payments from OMC
that were are deemed to be  preferential  payments under  applicable  bankruptcy
law, and demands the repayment thereof.

     The Company,  based upon review of the case and discussions  with its legal
counsel,  believes  the  lawsuit to be similar to  numerous  filed on former OMC
dealers on behalf of OMC and that it is  without  merit.  There is no  guarantee
that our Company  will  prevail in defense of this or other  lawsuits.  Lawsuits
resulting in a substantial  unfavorable  verdict or  resolution  for the Company
could have a material adverse impact on the results of operations.

12.  Benefit Plan

     The  Company  has a  401(k)  retirement  plan  which  is  available  to all
full-time  employees.  The  Company  may,  in  its  discretion,   make  matching
contributions into the plan. The Company did not make matching  contributions to
the plan in the years ended  September 30, 2003, 2002 and 2001 and plan expenses
during the same period were not significant.

13.  Subsequent Events

     Effective  November  10, 2003,  the Company  entered into a new real estate
loan in the amount of $5.3 million. The loan has a three year maturity. Interest
payments  are due monthly  based upon  interest  at 12%,  and all  principal  is
repayable  at maturity.  Proceeds of the loan were used to refinance  other real
estate indebtedness maturing December 31, 2003 in the approximate amount of $3.7
million and the  remainder  will be used for  transaction  expenses  and general
working capital.

     Effective  December 19, 2003, the Company  consummated the sale of the land
and building of its former store location in Little Rock, Arkansas for $375,000.
The  proceeds  repaid the  existing  mortgage  on the  premises in the amount of
approximately  $170,000 and the remainder will be used for transaction  expenses
and general working capital.

     After  giving  effect  to the  aforementioned  transactions;  the  proforma
aggregate  annual  maturities  required on notes  payable at September  30, 2003
would be as follows (in thousands):

Year Ending September 30
---------------------------------------
2004                                               $ 984
2005                                               1,551
2006                                                 656
2007                                               5,687
2008                                                  44
Thereafter                                           108

                                        -------------------
                                                  $9,030
                                        ===================

     Effective by  correspondence  dated January 6, 2004 and January 9, 2004 the
Company  received  notice  from  Transamerica   Commercial  Finance  Corporation
("TCFC") and GE Commercial  Distribution  Finance  Corporation  ("GE") (formerly
known as Deutsche  Financial Services  Corporation  ("DFS") that the maturity of
its borrowing  agreements had been renewed from October 30, 2003 through October
31, 2004 subject to appropriate  documentation.  Pursuant to the correspondence,
the borrowing  agreements are in the initial  combined  amount of $60.0 million;


                                      F-23
<PAGE>

with a seasonal reduction to $42.5 million in July 2004.  Documentation includes
loan agreements  containing  various loan covenants and borrowing  restrictions,
including,  but not limited to, minimum  financial  ratios  governing net worth,
inventory  turn,  accounts  receivable  turn and percentage  levels of operating
expenses.

The  Company  anticipates  filing  the  amended  documents  of  record  upon the
execution of the amended definitive agreements.


                                      F-24
<PAGE>

No annual report or proxy  material has been sent to security  holders as of the
date of this Report on Form 10-K;  however,  the Company anticipates sending the
annual report and proxy  materials on or before any applicable  deadlines.  When
such a report and proxy  materials are furnished,  the  Registrant  will furnish
copies of such materials to the Commission.

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                      Travis Boats & Motors, Inc.
Date:  January 13, 2004               By:  /s/ MARK T. WALTON
                                         -----------------------------------
                                           Mark T. Walton
                                             President



                      POWER OF ATTORNEY TO SIGN AMENDMENTS

     KNOW ALL BY THESE PRESENTS,  that each person whose signature appears below
does  hereby  constitute  and  appoint  Mark  T.  Walton  his  true  and  lawful
attorney-in-fact  and agent for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to the Travis Boats & Motors, Inc.
Annual Report on Form 10-K for the year ending  September 30, 2003,  and to file
the  same,  with  all  exhibits  thereto,  and  other  documents  in  connection
therewith,  with the  Securities  and Exchange  Commission,  granting  unto said
attorney-in-fact  and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully,  to all intents and purposes,  as they
or he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, may lawfully do or cause to be done
by virtue hereof.  This Power of Attorney has been signed below by the following
persons in the capacities and on the dates indicated.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Name                                   Title                                       Date Signed

<S>                                    <C>                                         <C>
/S/ RICHARD S. BIRNBAUM                Chairman of the Board                       January 13, 2004
Richard S. Birnbaum

/s/ MARK T. WALTON                     President (Principal Executive Officer)     January 13, 2004
Mark T. Walton

/S/ MICHAEL B. PERRINE                 Chief Financial Officer, Secretary and      January 13, 2004
Michael B. Perrine                     Treasurer (Principal Financial and
                                       Accounting Officer)

/S/ KENNETH BURROUGHS                  Director                                    January 13, 2004
Kenneth Burroughs

/s/ JAMES P. KARIDES, CPA              Director                                    January 13, 2004
James P. Karides, CPA

/S/ ROBERT L. RING                     Director                                    January 13, 2004
Robert L. Ring

</TABLE>