SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-Q

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

                  For the Quarterly Period Ended June 30, 2003

                                       OR

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

                         Commission File Number 0-20757

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


            TEXAS                                         74-2024798
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                    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 a check mark  whether the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
                                Yes [ ] No [ X ]


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

Common Stock $.01 par value - 4,309,727 shares as of August 13, 2003.



<PAGE>


                                      INDEX


PART I - FINANCIAL INFORMATION


Item 1:  Financial Statements (Unaudited):
                   Condensed Consolidated Balance Sheets:
                   June 30, 2003 and September 30, 2002.......................1
                   Condensed Consolidated Statements of Operations:
                   Three and Nine Months Ended June 30, 2003 and 2002.........2
                   Unaudited Condensed Consolidated Statements of Cash Flows:
                   Nine Months Ended June 30, 2003 and 2002...................3
                   Notes to Condensed Financial Statements....................4
Item 2:  Management's Discussion and Analysis of Financial
                   Conditions and Results of Operations.......................8
Item 3: Quantitative and Qualitative Disclosures About Market Risk...........15

PART II - OTHER INFORMATION

Items 1 - 6..................................................................15
Signatures...................................................................17


                                       i

<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Travis Boats & Motors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
 ( in thousands, except share data )
<TABLE>
<CAPTION>
                                                                            June 30,        September 30,
                                                                              2003              2002
                                                                          -------------    ----------------
                                                                          (unaudited)
<S>                                                                           <C>                  <C>
ASSETS:
      Current assets:
            Cash and cash equivalents                                           $4,014              $4,253
            Accounts receivable, net                                            12,712               9,681
            Inventories, net                                                    39,262              56,957
            Income taxes recoverable/Deferred tax asset                             --                 611
            Prepaid expenses and other                                           1,081               1,009
                                                                          -------------    ----------------
              Total current assets                                              57,069              72,511

      Property and equipment:
            Land                                                                 5,982               5,982
            Buildings and improvements                                          15,585              15,899
            Furniture, fixtures and equipment                                    9,164               9,327
                                                                          -------------    ----------------
                                                                                30,731              31,208
            Less accumulated depreciation                                     (11,040)             (9,820)
                                                                          -------------    ----------------
                                                                                19,691              21,388

      Intangibles and other assets:
            Non-compete agreements, net                                            835               1,149
            Other assets                                                           210                 384
                                                                          -------------    ----------------
              Total assets                                                     $77,805             $95,432
                                                                          =============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
            Accounts payable                                                    $4,318              $4,122
            Accrued liabilities                                                  2,174               1,439
            Floor plan and revolving line of
            credit                                                              39,136              50,949
            Current portion of notes payable and other short-term                6,785               1,025
            obligations
            Notes payable in default, classified as short-term                       0               6,436
            obligations
                                                                          -------------    ----------------
              Total current liabilities                                         52,413              63,971

      Notes payable, less current portion                                        2,270               3,225
      Convertible subordinated notes                                             1,300               1,300

      Stockholders' equity
               Serial Preferred stock, $100 par value, 1,000,000
               shares authorized, 80,000 shares outstanding                      8,000               8,000
            Common Stock, $.01 par value, 50,000,000 authorized,
               4,309,727 and 4,329,727 issued and outstanding at
               June 30, 2003 and September 30, 2002, respectively                   43                  43
            Paid-in capital                                                     15,100              15,109
            Retained earnings/(deficit)                                     (    1,321)               3,784
                                                                          -------------    ----------------
              Total stockholders' equity                                        21,822              26,936

                                                                          -------------    ----------------
              Total liabilities and stockholders' equity                       $77,805             $95,432
                                                                          =============    ================
</TABLE>

See notes to unaudited condensed consolidated financial statements



                                       1

<PAGE>


Travis Boats & Motors, Inc. and Subsidiaries -
Condensed Consolidated Statements of  Operations
(in  thousands,  except share and store data)
<TABLE>
<CAPTION>

                                                           Three Months Ended         Nine  Months  Ended
                                                                June 30,                    June 30,
                                                             2003        2002            2003         2002
                                                          ---------  ----------       ---------    ---------
<S>                                                        <C>         <C>            <C>          <C>
Net sales.............................................     $53,129     $67,825        $109,149     $135,879
Cost of goods sold....................................      42,136      52,614          87,049      106,134
                                                          ---------  ----------       ---------    ---------

Gross profit..........................................      10,993      15,211          22,100      29,745

Selling, general and administrative...................       8,704      10,850          24,682      27,380
Store closing expense.................................         307         --              307         --
Depreciation and amortization.........................         598         625           1,863        1,868
                                                          ---------  ----------       ---------    ---------

                                                             9,609      11,475          26,852      29,248

Operating income/(loss)...............................       1,384       3,736          (4,752)        497
Interest expense......................................        (872)     (1,054)         (2,614)     (3,208)
Other income/(expense)................................          46        (178)             88          66
                                                          ---------  ----------       ---------    ---------

Income/(loss) before income taxes, and cumulative
effect of accounting change...........................         558       2,504          (7,278)     (2,645)
Income tax (provision)/benefit........................         --         (927)          2,533         978
                                                          ---------  ----------       ---------    ---------

Income/(loss) before cumulative effect of accounting
change................................................     $   558     $ 1,577        $ (4,745)    $(1,667)

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

                                                           ---------   ---------      ---------    ---------
     Net income/(loss)................................     $   558     $ 1,577        $ (4,745)    $(8,195)

Preferred stock dividends.............................        (120)        (67)           (360)        (67)
                                                           ---------   ---------      ---------    ---------
     Net income/(loss) attributable to common
     shareholders.....................................     $   438     $(1,510)       $ (5,105)    $(8,262)
                                                           =========   =========      =========    =========

Earnings/(loss) per share
  Basic:
Income/(loss) before preferred stock dividends and
cumulative effect of accounting change, net...........        0.13        0.36           (1.10)      (0.39)
Preferred stock dividends.............................       (0.03)      (0.01)          (0.08)      (0.01)
Cumulative effect of accounting change, net...........         --          --              --        (1.50)
                                                           ---------   ---------      ---------   ----------
     Net income/(loss)................................     $  0.10     $  0.35        $  (1.18)    $ (1.90)
                                                           =========   =========      =========   ==========
     Diluted:
Income/(loss) before preferred stock dividends and
cumulative effect of accounting change, net ..........        0.07        0.25           (1.10)      (0.39)
Preferred stock dividends.............................         --          --            (0.08)      (0.01)
Cumulative effect of accounting change, net...........         --          --              --        (1.50)
                                                           ---------   ---------      ---------   ----------
      Net income/(loss)...............................     $  0.07     $  0.25        $  (1.18)   $  (1.90)
                                                           =========   =========      =========   ==========

Weighted average common shares outstanding............     4,313,243   4,345,657      4,324,232   4,349,742
Weighted average dilutive common shares outstanding...     8,094,653   6,524,013      4,324,232   4,349,742

</TABLE>


See notes to unaudited condensed consolidated financial statements

                                       2

<PAGE>


Travis Boats & Motors, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
                                                                                           Nine months ended
                                                                                                June 30,
                                                                                       2003                2002
                                                                                   ----------------------------------
<S>                                                                                  <C>                 <C>
Operating activities:
Net Loss.....................................................................        ($4,745)            ($8,195)
Adjustments to reconcile net loss to net cash used in
  Operating activities:
      Depreciation...........................................................          1,549               1,518
      Amortization...........................................................            314                 350
      Cumulative effect of accounting change, net............................              0               6,528
      Changes in operating assets and liabilities
           Accounts receivable...............................................         (3,031)             (6,518)
           Prepaid expenses..................................................            (72)               (380)
           Inventories.......................................................         17,694               3,497
           Other assets......................................................            174                 (67)
           Accounts payable..................................................            195               2,131
           Accrued liabilities...............................................            734                 635
           Income tax recoverable............................................            611                 778

                                                                                   ----------           -----------
      Net Cash provided by operating activities..............................         13,423                 277

      Investing Activities:
      Purchase of property and equipment.....................................              0                (541)
      Other..................................................................            151                   0
                                                                                   ----------           -----------
      Net cash (used in)/provided by investing activities....................            151                (541)

      Financing activities:

      Proceeds from issuance of convertible subordinated notes...............              0               1,300
      Net decrease in notes payable and other short term obligations.........        (13,444)             (1,175)
      Net proceeds from issuance of Series A preferred stock.................              0               7,820
      Preferred stock dividends..............................................           (360)                (67)
      Net payments from repurchase of common stock...........................             (9)                (41)

                                                                                   ----------          ------------
      Net cash (used in)/provided by financing activities....................        (13,813)              7,837
      Change in cash and cash equivalents....................................           (239)              7,573
      Cash and cash equivalents, beginning of period.........................          4,253               1,388

                                                                                   ----------          ------------
      Cash and cash equivalents, end of period...............................       $  4,014             $ 8,961

                                                                                   ==========          ============
</TABLE>


     See notes to unaudited condensed consolidated financial statements

                                       3

<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared  from the  records  of Travis  Boats & Motors,  Inc.  and  subsidiaries
(collectively,  the "Company") without audit. In the opinion of management, such
financial  statements  include all  adjustments  (consisting  of only  recurring
accruals)  necessary to present fairly the financial  position at June 30, 2003;
and the  interim  results  of  operations  and cash flows for the three and nine
month periods ended June 30, 2003 and 2002. The condensed  consolidated  balance
sheet at September  30,  2002,  presented  herein,  has been  prepared  from the
audited  consolidated  financial  statements  of the Company for the fiscal year
then ended.

Accounting  policies  followed  by the Company  are  described  in Note 2 to the
audited  consolidated  financial  statements for the fiscal year ended September
30, 2002.  Certain  information and footnote  disclosures  normally  included in
financial  statements  have  been  condensed  or  omitted  for  purposes  of the
condensed consolidated interim financial statements.  The condensed consolidated
financial statements should be read in conjunction with the audited consolidated
financial  statements,  including the notes  thereto,  for the fiscal year ended
September 30, 2002 included in the Company's annual Report on Form 10-K.

The results of  operations  for the three and nine month  period  ended June 30,
2003 are not  necessarily  indicative of the results to be expected for the full
fiscal year.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial  Accounting  Standards Board (the "FASB") issued
Statement of Financial  Accounting Standards No. 148, Accounting for Stock-Based
Compensation-Transition  and  Disclosure-an  amendment of FASB Statement No. 123
("Statement  148"). This amendment provides two additional methods of transition
for a  voluntary  change  to the fair  value  based  method  of  accounting  for
stock-based employee compensation.  Additionally,  more prominent disclosures in
both  annual and interim  financial  statements  are  required  for  stock-based
employee compensation.  The transition guidance and annual disclosure provisions
of Statement 148 are effective for fiscal years ending after  December 15, 2002.
The interim disclosure provisions are effective for financial reports containing
financial  statements for interim periods beginning after December 15, 2002. The
adoption  of  Statement  148 did not have a  material  impact  on the  Company's
consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of Others" (FIN 45). FIN 45 elaborates on the existing  disclosure
requirements  for most  guarantees,  including loan  guarantees  such as standby
letters  of  credit.  It also  clarifies  that at the  time a  company  issues a
guarantee,  the company must recognize an initial  liability for the fair value,
or market value,  of the  obligations  it assumes under that  guarantee and must
disclose that information in its interim and annual financial statements. FIN 45
is effective  on a  prospective  basis to  guarantees  issued or modified  after
December  31, 2002.  The  requirements  of FIN 45 are  effective  for  financial
statements  of interim or annual  periods  ending after  December  15, 2002.  We
adopted the accounting and disclosure  requirements of FIN 45, which resulted in
no material impact on our financial statements.

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 no longer classifies debt  extinguishment  transactions as extraordinary
items.  These costs are now included  within the other  expense  category in the
statement of operations.  For the three and nine months ended June 30, 2002, the
Company reclassified the amount of $206,000 incurred upon debt extinguishment to
other expense.

In May 2003,  the FASB  issued SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity,  effective for
financial instruments entered into or modified after May 31, 2003. The statement
requires the  reclassification  of certain  instruments  that were classified as
equity.  The Company is  evaluating  the  applicability  of the Statement on its
financial position and results of operations.

NOTE 3 - BASIC/DILUTED OUTSTANDING SHARE CALCULATION

The  following  table sets forth the  computation  of basic and  diluted  shares
outstanding:

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                   Three Months Ended          Nine Months Ended
                                                        June 30,                    June 30,
                                                     2003         2002           2003        2002
                                                  ----------   ---------      ---------   ---------
<S>                                               <C>          <C>            <C>         <C>
Denominator for Basic income/(loss) per share -

     Weighted  average  shares.................   4,313,243    4,345,657      4,324,232   4,349,742

Effect of assumed conversions:

    Convertible Subordinated Notes.............     528,584      528,584          --          --

    Series A Preferred Stock...................   3,252,826    1,649,772          --          --

Denominator for diluted income/(loss) per share

                                                  ---------    ---------      ---------   ---------
    Weighted average shares and
    assumed conversions........................   8,094,653    6,524,013      4,324,232   4,349,742
                                                  =========    =========      =========   =========
</TABLE>


Financial  Accounting Standards Board Statement No. 128 requires the calculation
of earnings per share to exclude common stock  equivalents when the inclusion of
such would be  anti-dilutive.  In the nine month periods ended June 30, 2003 and
2002, the inclusion of common stock  equivalents  would have been  anti-dilutive
based  upon the net loss  posted  by the  Company.  As such,  all  common  stock
equivalents were excluded.

The Company,  as of June 30, 2003, had  outstanding  incentive  stock options to
certain  employees  totaling  74,100 shares which had a strike price equal to or
exceeding  the closing  price of the  Company's  common stock on such date.  The
74,100  option  shares  have a  weighted  average  strike  price of $5.14  and a
weighted average outstanding remaining life of 5.8 years.

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 nine-month period
ended June 30, 2003, the conversion  price of  approximately  $2.46 per share of
both issuances exceeds the Company's average market price of its common stock.

NOTE 4 - STOCKHOLDERS' EQUITY

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.

Repurchases of shares of common stock during the nine months ended June 30, 2003
and 2002 consisted of the following:

                                            9 mos ended            9 mos ended
                                           June 30, 2003          June 30, 2002
                                          -------------------------------------
     Shares Repurchased (000's)                  20                   19.3
     Total Purchase Price (000's)                $5.4                $40.1
     Average Price per Share                     $0.27               $ 2.08


                                       5

<PAGE>

The Company has stock-based  compensation plans under which directors,  officers
and other employees  receive stock options and other  equity-based  awards.  The
plans  provide  for the  grant  of stock  options,  stock  appreciation  rights,
performance  awards,  restricted  stock awards and other stock unit awards.  The
Company follows the disclosure requirements of SFAS 123. As permitted under SFAS
123, the Company  follows  Accounting  Principles  Board  Opinion No. 25 for its
stock-based  compensation  plans and does not recognize expense for stock option
grants if the exercise price is at least equal to the market value of the common
stock at the date of grant. Stock-based compensation expense reflected in the as
reported  net loss  includes  expense for  restricted  stock unit awards and the
amortization of certain  acquisition-related  deferred compensation expense. The
fair value of stock  options  used to  compute  pro forma net loss and pro forma
loss per share disclosures is estimated using the  Black-Scholes  option-pricing
model,  which  was  developed  for use in  estimating  the fair  value of traded
options  that  have no  vesting  restrictions  and are  fully  transferable.  In
addition, this model requires the input of subjective assumptions, including the
expected price volatility of the underlying stock. Projected data related to the
expected  volatility and expected life of stock options is based upon historical
and other  information.  Changes in these subjective  assumptions can materially
affect the fair value estimate,  and therefore the existing  valuation models do
not provide a precise measure of the fair value of the Company's  employee stock
options.  As required  under SFAS 148, the following  table  summarizes  the pro
forma effect of stock-based  compensation  on net loss and loss per share if the
fair value  expense  recognition  provisions  of SFAS 123 had been  adopted  (in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                                           Net Income/(Loss)

                                                                      Three Months Ended June 30,       Nine Months Ended June 30,
                                                                           2003        2002                 2003          2002
<S>                                                                        <C>        <C>                 <C>           <C>
Reported net income/net loss                                                438       1,510               (5,105)       (8,262)
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                               (33)        (78)                (126)         (237)
      expense determined under the fair value
      method for all awards, net of related tax effects
                                                                       -----------  ----------         -----------    -----------
Pro forma net income/(loss)                                                 405       1,432               (5,231)       (8,499)


                                                                             Reported Basic and Diluted Income/ Loss per Share

Reported Basic net income/(loss) per share                                 0.10        0.35                (1.18)        (1.90)
Reported Diluted net income/(loss) per share                               0.07        0.25                (1.18)        (1.90)

Pro forma Basic net income/(loss) per share                                0.09        0.33                (1.21)        (1.95)
Pro forma Diluted net income/(loss) per share                              0.05        0.22                (1.21)        (1.95)
</TABLE>


NOTE 5 - CONVERTIBLE SUBORDINATED NOTES

The Company has outstanding  Convertible  Subordinated Notes (the "Notes") in an
aggregate amount of $1.3 million  originally  issued in December 2001. The Notes
are unsecured with a term of 36 months and accrue interest at 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 (see Note 7). 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.

NOTE 6 - SERIES A PREFERRED STOCK

The  Company  has issued  80,000  shares of 6% Series A  Cumulative  Convertible
Preferred  Stock (the  "Preferred  Stock")  pursuant to an agreement  with TMRC,
L.L.P.  ("Tracker"),  a wholly-owned  subsidiary of Tracker Marine,  L.L.C.  The

                                       6
<PAGE>

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.  The Preferred Stock is governed by a  comprehensive  agreement
that provides,  among other components,  the right to name certain directors and
re-pricing  options in the event of the issuance of other equity  securities  or
debt with more favorable conversion prices or terms.

NOTE 7 - SHORT TERM BORROWINGS

The Company  finances  substantially  all of its inventory  and working  capital
requirements  pursuant to inventory borrowing agreements entered into in January
2000 with two commercial finance companies.  The agreements matured on April 30,
2003  and  have  been  extended  since  that  time on a  monthly  basis  pending
negotiations for longer term renewal  agreements  acceptable to both the Company
an the lenders (see  Management's  Discussion and Analysis -  "Liquidity").  The
maximum  aggregate  borrowing  availability as of June 30, 2003 was limited to a
maximum  credit  limit of  approximately  $70 million at various  prime based or
LIBOR  based  interest  rates  (varying  from 4.75% to 4.82% at June 30,  2003).
Borrowings  under the agreements  are pursuant to a borrowing  base, or specific
floor  plan,  advancing  formula  and are used  primarily  to finance  inventory
purchases  and for  general  working  capital  requirements.  Substantially  all
inventory,  accounts receivable,  furniture,  fixtures, equipment and intangible
assets collateralize these agreements.  The Company also granted junior liens on
its real estate holdings as collateral.

The Company  also has  approximately  $5.5  million in real estate  loans with a
single lender which previously have been  re-classified as current.  The Company
and Lender entered into revised loan agreement  effective March 20, 2003 and the
Company  is in  compliance  with the  revised  agreement.  Terms of the  revised
agreement  require the Company to repay each loan on or prior to specific  dates
prior  to  October  30,  2003.  (See  Management's  Discussion  and  Analysis  -
"Liquidity.").

NOTE 8 - GOODWILL

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.  Accordingly,  with the adoption of the Statement,
the Company ceased amortization of goodwill as of October 1, 2001.

In accordance with SFAS 142, the Company completed goodwill  impairment tests as
required.  The tests  involved the use of  estimates  related to the fair market
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 our
market  capitalization  relative to our 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.

NOTE 9 - COMPREHENSIVE INCOME/LOSS

For the three and nine months ended June 30, 2003 and 2002, the Company recorded
no comprehensive income or loss items, other than the net income or net loss.

NOTE 10 - 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.  Some of these  lawsuits  involve  claims  for
substantial amounts.

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 we received  approximately  $700,000 in
cash payments from OMC that were are deemed to be  preferential  payments  under
applicable  bankruptcy law, and hence demands the repayment thereof. The Company
believes  that the  lawsuit is  without  merit and that the cash  payments  were
received in the ordinary course of business pursuant to the Company's  contracts
with OMC.

                                       7

<PAGE>

There is no guarantee that our Company will prevail in defense of lawsuits filed
against it. Lawsuits  resulting in an unfavorable  verdict or settlement for the
Company could have a material adverse affect on our results of operations.

Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations

Some of the  information  in this Report on Form 10-Q  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  information  that we
describe  in this  section,  as well as any other  cautionary  language  in this
Report on Form 10-Q, 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 and therefore result in a material adverse effect
on  our  business,  operating  results  and  financial  condition.  For  a  more
comprehensive  discussion of these and the numerous other Risk Factors affecting
our business and operations see the Company's  Report on Form 10-K filed for the
fiscal year ended  September 30, 2002 and other  documents  filed of record with
the Securities and Exchange Commission.

We Must  Comply  with  Listing  Requirements  for the Nasdaq  Stock  market.  We
transferred  our common  stock to the Nasdaq  Small Cap Market  effective  as of
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.  By
letter  dated as of February  14,  2003 we were  notified by the NASDAQ that the
closing  price for our common stock for the 30 days prior  thereto was below the
minimum $1.00 bid price required by the Nasdaq Small Cap Market. By letter dated
August 14, 2003, the NASDAQ  notified the Company that it can regain  compliance
if the Company's common stock closes at $1.00 per share or more for a minimum of
10  consecutive  trading  days prior to  February  9, 2004.  The NASDAQ has also
notified  the Company  that in the event it has a net worth of at least the $5.0
million  required by the NASDAQ Small Cap Market  maintenance  standards on that
date the NASDAQ will grant the  Company an  additional  grace  period of 90 days
until May 9, 2004 to regain compliance with the minimum bid price. The Company's
net worth as of June 30, 2003 was $21.8  million  and thus the Company  believes
that it will receive the extended grace period from the NASDAQ.  However,  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.

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 operated 30 stores on June 30, 2003 under the name Travis Boating Center
in nine states:  Texas (8), Arkansas (2),  Louisiana (4), Alabama (1), Tennessee
(3),  Mississippi  (1),  Florida (9),  Georgia (1) and Oklahoma (1).  During the
quarter  ended  June 30,  2003,  the  Company  closed  the  store  locations  in
Knoxville,  Tennessee;  Lake  Pickwick,  Tennessee;  Little  Rock,  Arkansas and
Englewood,  Florida.  The assets of the closed locations were  consolidated into
other Travis Boats locations in proximity to the closed stores.

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.  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 our boats held for sale.

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. We also

                                       8

<PAGE>

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.

We study  sales  trends  from the  cities  and  states  where we  operate  store
locations.  We use the  information  from this data to coordinate the design and
pre-package combinations of popular brand-name boats, such as Larson, Wellcraft,
Scarab,  Bayliner,  Fisher,  ProCraft,  Fishmaster,  Ranger 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 our 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  new and used  yachts  in
several  markets that range in length from 25 feet to over 50 feet. 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 product line generally  consists of
boat packages priced from $7,500 to $100,000 with approximate even  distribution
within this price range.  However,  we do sell new and used  cruisers and yachts
that may have prices above $500,000. We believe that as our Company continues to
operate in Florida and enters  other  markets  along the Gulf of Mexico or other
coastal areas, the number of off-shore  fishing boats and cruisers will continue
to increase as a percentage of our net sales.  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.

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 income for insurance and extended service agreements net

                                       9

<PAGE>

of the related fee that is paid to the  third-party  vendors or  administrators.
Since our Company's  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.

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 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.

Such 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 year 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 was necessary for these deferred tax assets.

Results of Operations

Quarter Ended,  June 30, 2003 Compared to the Quarter  Ended,  June 30, 2002 and
Nine Months Ended,  June 30, 2003  Compared to the Nine Months  Ended,  June 30,
2002.

Net sales.  Net sales in the third  quarter of fiscal  2003  decreased  to $53.1
million,  compared to net sales of $67.8 for the third  quarter of fiscal  2002.
For the nine months ended June 30, 2003, net sales  decreased to $109.1 million,
compared to $135.9 million during the same period of the prior fiscal year.

Comparable  store sales decreased by 16.5% and 15.2% (30 stores in base) for the
quarter and nine months ended June 30, 2003.  The  decreases in net sales during
the quarter and nine months  ended June 30, 2003  resulted  from the decrease in
comparable store sales,  reduced sales as a result of the impact of fewer stores

                                       10

<PAGE>

in operation (30 versus 35) and a decline in average  retail prices based on our
aggressive  sell-through of non-current inventory.  The operation of fewer store
locations  accounted  for  approximately  $4.6  million and $8.2  million of the
reduction  in net  sales  for the  quarter  and 9 months  ended  June 30,  2003,
respectively.  During  the  quarter  ended  June  30,  2003,  the  Company  sold
approximately  $14.5 million of non-current and aged inventory at reduced retail
sales prices and gross profit margins. Our strategy is to accelerate the sale of
certain  aged and  discontinued  product to  improve  inventory  turns,  improve
product mix refinement and to increase working capital since  substantially  all
of the aged  inventory  is  ineligible  to borrow  against  under the  Company's
inventory  borrowing  agreements.  Management  believes that the sell-through of
additional  inventory  will have a negative  impact on retail  sales  prices and
impact gross profit margins (in a range  consistent  with the quarter ended June
30, 2003) through the first quarter of the Company's 2004 fiscal year when it is
expected to be substantially  complete;  but offset by an improvement in working
capital from its inventory borrowing base loan requirements.  Management further
believes that  additional  factors  contributing to the decline in net sales and
the  decrease  in  comparable  store  sales  included,  but were not limited to,
prolonged erratic levels of consumer confidence and employment uncertainty.

Gross Profit.  Gross profit decreased by 27.7% to approximately $11.0 million in
the third  quarter  of fiscal  2003 from $15.2  million  in the same  quarter of
fiscal 2002.  Gross profit,  as a percent of net sales,  decreased to 20.7% from
22.4% during the same periods.  For the nine months ended,  June 30, 2003, gross
profit decreased 25.7% to $22.1 million from $29.7 million in the same period of
the prior year.  Gross  profit,  as a percent of sales,  decreased to 20.2% from
21.9% during the same period.

The  decrease  in total  gross  profit  was  primarily  related  to the  factors
discussed  above in Net Sales.  We believe  that we may  continue to  experience
erratic levels of overall gross profit margins  through the first quarter of the
2004 fiscal year  resulting,  in part,  to (i) the  aggressive  sell-through  of
substantially the remainder of the non-current and aged inventory; combined with
(ii) a continued weak and uncertain economic environment.

F&I Products.  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  arranged by us, we earn  commissions  based upon our total  volume of
sales or the amount of mark-up we charge over the cost of the products sold.

Net sales of these products  contributed  approximately $2.0 million,  or 18.2%,
and $3.8 million, or 17.1% of total gross profit for the quarter and nine months
ended June 30, 2003,  as compared to $2.0 million or 13.2%,  and $4.0 million or
13.5% of total gross profit for the same  periods of the prior fiscal year.  Net
sales attributable to F&I Products are reported on a net basis,  therefore,  all
of such sales  contribute  directly to the  Company's  gross  profit.  The costs
associated  with the sale of F&I Products  are included in selling,  general and
administrative expenses. Management attributes the improvement in F&I income, as
a percentage of gross  profit,  to (i) improved  training and (ii)  implementing
processes  that allow for remote  handling of F&I  functions in several  markets
which had previously  underperformed  relative to certain Company benchmarks and
goals.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  decreased to $9.0  million in third  quarter of fiscal
2003 from $10.9  million for the third  quarter of fiscal 2002.  As a percent of
net sales,  selling,  general and administrative  expenses increased to 17.0% in
the third  quarter  of fiscal  2003 from  16.0% for the third  quarter of fiscal
2002.  For  the  nine  months  ended  June  30,  2003,   selling,   general  and
administrative  expenses  were $25.0  million,  or 22.9% as a percentage  of net
sales,  versus $27.4 million,  or 20.2% as a percentage of net sales in the same
period of the prior fiscal year.

Included in the selling,  general and administrative  expenses for the three and
nine months  ended June 30,  2003 are Store  Closing  expenses of  approximately
$307,000. These expenses are attributable to the Company closing store locations
during the quarter ended June 30, 2003 in Knoxville,  Tennessee;  Lake Pickwick,
Tennessee;  Little Rock,  Arkansas  and  Englewood,  Florida.  The assets of the
closed  locations  were  consolidated  into  other  Travis  Boats  locations  in
proximity  to the closed  stores.  The Store  Closing  expenses  were  primarily
non-cash  expenses  resulting from the  elimination of $270,000 in leasehold and
other store facility improvements at the closed locations.  The Company owns the
store  location in Little Rock,  Arkansas and had expired  leases in  Knoxville,
Tennessee  and  Englewood,  Florida,  therefore it does not have  ongoing  lease
expense obligations  related to those former locations.  The Lake Pickwick store

                                       11
<PAGE>

location was subject to a lease originally terminating in May 2004, however, the
Company  believes that it has terminated its  obligations  thereunder.  Expenses
related to Store  Closings in the three and nine months ended June 30, 2002 were
not significant.

The decrease in selling, general and administrative expenses, in actual dollars,
for the quarter and nine months  ended June 30, 2003 versus the same  periods of
the  prior  year  was  primarily  attributable  to  improved  expense  controls;
operating fewer stores and a significant reduction in labor costs as a result of
headcount  reductions and the reduction in sales. The reduction in expenses have
been  somewhat  offset by increases  in certain  expenses,  primarily  insurance
expense and promotion and advertising expenses. The Company has also experienced
significant  increases in premiums related to both its property/casualty and its
employee health insurance coverages.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
decreased to $598,000 in the third  quarter of fiscal 2003 from $625,000 for the
third  quarter of fiscal 2002.  Depreciation  and  amortization  expenses,  as a
percentage of net sales,  were 1.1% and 0.9% for the quarter ended June 30, 2003
and 2002, respectively.  Depreciation and amortization expenses remained flat at
approximately  $1.9  million for the nine  months  ended June 30, 2003 and 2002,
respectively.

Interest Expense. Interest expense decreased to $872,000 in the third quarter of
fiscal  2003 from $1.1  million in the third  quarter of fiscal  2002.  Interest
expense was approximately 1.6% of net sales in the each period.

The decreased interest expense,  in actual dollars,  was primarily the result of
significantly  lower balances on the Company's  inventory  based lines of credit
due to the  significant  reductions  in the  levels  of  inventory  held  by the
Company.  The Company has successfully reduced inventory levels to reflect sales
trends;  in conjunction  with the accelerated  sell-though of certain  inventory
discussed in Net Sales; and as a result of its prior  implementation of a Master
Business  Plan that  requires  pre-approved  purchase  orders for all  inventory
purchases.  Interest  expense also  benefited from the decrease in the Company's
variable borrowing rates relative to the same periods of the prior year.

Income Tax Expense/(Benefit). The Company files its federal tax returns based on
a calendar  year period and  effective  with its 2003 calendar year has utilized
all of its  previously  available  carryback  periods to claim tax  refunds.  In
accordance with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes", the Company has determined that effective January 1, 2003 any
(i)  deferred tax assets,  or (ii) tax  benefits  which could not be realized by
carryback to prior tax years would likely not be realized.  Accordingly,  a full
valuation allowance was necessary for these tax assets.  Therefore,  as a result
of the Company's  cumulative net loss for the calendar year to date period ended
June 30, 2003,  the Company has not accrued an income tax expense or benefit for
calendar year to date 2003  operations.  The income tax benefit of approximately
$2.5 million reflected for the nine months ended June 30, 2003 was the result of
the Company's  federal income tax refund for the 2002 calendar  year,  which was
applied for in March 2003 and received by the Company in April 2003.

Net  Income/(Loss).  The Company,  after  preferred stock dividends of $120,000,
reported net income,  of $438,000  ($0.10 per basic and $0.07 per diluted share)
for the quarter ended June 30, 2003,  versus net income , after  preferred stock
dividends  of $67,000,  of $1.5  million  ($0.35 per basic and $0.25 per diluted
share) in the quarter ended June 30, 2002.

The Company,  after preferred  stock dividends of $360,000,  reported a net loss
attributable to common shareholders of $5.1 million ($1.18 per basic and diluted
share) for the nine months ended June 30, 2003. The Company  reported a net loss
of $1.7  million  ($0.40 per basic and  diluted  share),  prior to the impact of
cumulative  accounting change for the nine months ended June 30, 2002. Inclusive
of the  impact  of the  cumulative  effect of  accounting  change,  the  Company
reported a net loss, of $8.3 million ($1.90 per basic and diluted share) for the
nine month period ended June 30, 2002.

As previously  reported,  the net loss from the cumulative  effect of accounting
change is from the Company's adoption of SFAS 142, Goodwill and Other Intangible
Assets as of October 1, 2001. The  application  of the transition  provisions of
SFAS 142  required  the  Company to take a  non-cash,  non-recurring,  after-tax
charge of  approximately  $6.5 million  effective as of October 2001. The charge
eliminated the Company's goodwill accounts.

Liquidity and Capital Resources

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").

                                       12
<PAGE>

On June 30, 2003, we had  approximately  $4.0 million in cash,  $12.7 million in
accounts  receivable  (primarily  contracts in transit from sales,  manufacturer
rebates  receivable and other amounts due from  manufacturers) and $39.3 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  $6.5  million of accounts
payable and accrued  liabilities,  $39.1 million outstanding under our Borrowing
Agreements and approximately $6.8 million in short-term  indebtedness  including
(i) current  maturities of notes  payable and short term loans of  approximately
$1.3  million;  and (ii) three  real  estate  loans with a single  lender in the
aggregate amount of approximately  $5.5 million that mature prior to October 31,
2003.

The three real estate loans mature in the following amounts and dates:  $463,000
on August 31, 2003; $922,000 on September 30, 2003 and $4,068,000 on October 31,
2003. The Company is negotiating a potential refinance or sale/leaseback process
on the  properties.  Management  believes  that the  favorable  loan  amount  of
approximately  $5.5 million  versus the  appraised  amount on the  properties of
approximately $12.0 million will enable the Company to refinance or re-negotiate
the loans within the applicable maturity dates.

As of June 30, 2003, the aggregate  maximum  borrowing limit under our Borrowing
Agreements is approximately $70.0 million.

On June 30, 2003, we had working capital of approximately $4.7 million.  Working
capital, as of that date, was negatively impacted by our fiscal year to date net
loss and the aforementioned $6.8 million in short term indebtedness.

For the nine months  ended June 30, 2003,  operating  activities  provided  cash
flows  of $13.4  million  due  primarily  to a  decrease  of  $17.7  million  in
inventories as a result of the seasonal increase in sales and the Company's sell
through of non current  and aged  inventory  (see  Management's  Discussion  and
Analysis - "Net Sales").

For the nine months  ended June 30, 2003,  investing  activities  provided  cash
flows of $151,000.  These  activities were primarily from certain assets sold or
placed out of service as a result of the Company closing several store locations
during the quarter ended June 30, 2003.

For the nine months  ended June 30, 2003,  financing  activities  utilized  cash
flows  of $13.8  million  primarily  from the net  payment  of funds  under  our
inventory  borrowing  agreements  as a  result  of  the  seasonal  reduction  in
inventories.  We finance  substantially all of our inventory and working capital
requirements  pursuant to borrowing agreements entered into in January 2000 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 have
been amended numerous times. The agreements contain  substantially similar terms
and financial ratio based covenant requirements. The maximum aggregate borrowing
availability  as of June 30, 2003 was limited to a maximum  credit  limit of $70
million at various prime based or LIBOR based interest rates (varying from 4.75%
to 4.82% at June 30, 2003).  Borrowings  under the  agreements are pursuant to a
borrowing base, or specific floor plan, advancing formula and are used primarily
to finance  inventory  purchases and for general working  capital  requirements.
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:
(i) fees for  administrative  monitoring  and (ii) fees for unused  portions  of
available  credit.  The  Borrowing  Agreements  also  include  restrictive  loan
agreements  containing  various  loan  covenants  and  borrowing   restrictions,
including minimum financial ratios (governing net worth, current assets, debt to
worth  percentages  and cash flow  coverage  requirements  based  upon  interest
expense and monthly principal and interest payments on debts). Acquisitions, the
payment of common stock  dividends or  repurchases  of our common stock are also
substantially limited without prior consent.

Effective in  December,  2002,  we entered  into Amended and Restated  borrowing
agreements (the "Amended  Agreements") with our senior inventory  lenders,  TCFC
and GE,  (formerly  "DFS") with a initial maturity date of April 30, 2003. These
Amended Agreements have since been extended to mature on a monthly basis pending
negotiations for a longer term agreement  acceptable to both the Company and its
lenders.  The Amended  Agreements also included an "Intercreditor  Agreement" by
and among TCFC,  GE and TMRC,  L.L.P.  (the owner of the  Company's  outstanding
shares  of  Series A  Preferred  Stock),  that  provided  the  Company  up to an
additional  $500,000 from each lender of conditional  working capital  financing
(collectively  $1.5 million) pending receipt of the Company's  projected federal
income tax refund.

The  Company   received  its  federal   income  tax  refund  in  the  amount  of
approximately  $3.0  million  during  April 2003 and has repaid the $1.5 million
loan in full.

                                       13
<PAGE>

In conjunction  with the negotiations for a longer term renewal of its inventory
borrowing agreements,  the Company has met with its senior inventory lenders and
has discussed a comprehensive business strategy with the lenders that provides a
basis strategy by which the Company intends to improve cash flow by aggressively
accelerating   the  selling  of  non-current   and   discontinued   inventories;
substantially   reducing  overhead  and  labor  costs  and  increasing   certain
components   of   profitable   sales  such  as   service   labor;   parts;   and
finance/insurance products.

Management  believes the strategy and operating plan will allow the negotiations
to result in renewed inventory  borrowing  agreements that provide terms similar
to  those  currently  in place  and  provide  the  Company  with  the  necessary
flexibility  to  execute  its  strategy  of   substantially   accelerating   the
sell-through  of certain  inventory.  However  there is no guarantee the renewal
terms, if any, will be in amounts,  or have terms and conditions,  acceptable to
the  Company.  Also  any  material  shortfalls  or  variances  from  anticipated
performance  or the timing of certain  expenses or revenues  could require us to
seek  further  amendment to our  Borrowing  Agreements  or alternate  sources of
additional financing.

Contractual Commitments and Commercial Commitments

The following table sets forth a summary of our material contractual obligations
and commercial commitments as of June 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>
2003                                 $  39,136 (1)   $  5,830 (2)                $    755      $ 45,721
2004                                                    1,332                       2,336         3,668
2005                                                      301      $  1,300         1,720         3,321
2006                                                      227                       1,294         1,521
2007                                                      482                         815         1,297
Thereafter                                                883                         630         1,513

                                     -------------- ------------- -------------- ------------ ------------
Total                                $  39,136       $  9,055      $  1,300      $  7,550     $  57,041
                                     ============== ============= ============== ============ ============
</TABLE>

     (1)  Our inventory borrowing agreements,  which originated in January 2000,
          currently mature on a monthly basis pending  negotiations for renewal.
          (See Management's Discussion and Analysis - "Liquidity").

     (2)  Approximately  $5.5 million of real estate loans with a single  lender
          maturing  on dates  prior  to  October  31,  2003.  (See  Management's
          Discussion and Analysis - "Liquidity").


Seasonality

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,
as well as excessive  rain, may affect our sale of boating  packages and related
products and accessories.

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.

                                       14
<PAGE>

Cautionary  Statement for purposes of the Safe Harbor  Provisions of the Private
Securities Litigation Reform Act of 1995.

Other than  statements  of historical  fact,  all  statements  contained in this
Report  on  Form  10-Q,  including   statements  in  "Item  1.  Business",   and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations",  are forward-looking  statements as that term is defined in Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange  Act of 1934.  These  forward-looking  statements  involve  a number of
uncertainties.  The  actual  results  of  the  future  events  described  in the
forward-looking  statements in this Report on Form 10-Q could differ  materially
from those  stated in such  forward-looking  statements.  Among the factors that
could cause actual results to differ  materially  are: the impact of seasonality
and  weather,   general   economic   conditions,   competition   and  government
regulations,  the level of discretionary  consumer  spending,  national or local
catastrophic  events, as well as the risks and  uncertainties  discussed in this
Report on Form 10-Q,  including  without  limitation,  the matters  discussed in
"Risk  Factors"  and  the  uncertainties  set  forth  from  time  to time in the
Company's other public  reports,  filings and public  statements,  including the
Company's  Report on Form 10-K for the Fiscal Year ended September 30, 2002. All
forward-looking  statements in this Report on Form 10-Q are expressly  qualified
in their entirety by the cautionary statements in this paragraph.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Changes in short-term interest rates on loans from financial  institutions could
materially  affect the Company's  earnings because the interest rates charged on
certain underlying obligations are variable.

At June 30, 2003, a  hypothetical  100 basis point increase in interest rates on
the Company's Floor Plan and Revolving Line of Credit  obligations  would result
in an  increase of  approximately  $391,000  in annual  pre-tax  expenses of the
Company. The estimated increase in expenses is based upon the increased interest
expense of the Company's  variable rate Floor Plan and Revolving  Line of Credit
obligations  and  assumes  no change in the volume or  composition  of such debt
outstanding at June 30, 2003.

PART II.  OTHER INFORMATION

Item 1.  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.  Some of these  lawsuits  involve  claims  for
substantial amounts.

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 we received  approximately  $700,000 in
cash payments from OMC that were are deemed to be  preferential  payments  under
applicable  bankruptcy law, and hence demands the repayment thereof. The Company
believes  that the  lawsuit is  without  merit and that the cash  payments  were
received in the ordinary course of business pursuant to the Company's  contracts
with OMC.

There is no guarantee that our Company will prevail in defense of lawsuits filed
against it. Lawsuits  resulting in an unfavorable  verdict or settlement for the
Company could have a material adverse affect on our results of operations.

Item 2.  Changes in Securities

None

Item 3.  Defaults Upon Senior Securities

None

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

Not applicable

                                       15
<PAGE>

Item 5.  Other Information

Not applicable

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibit Number         Description            Incorporated by Reference to:

        31.1        Certification Pursuant to              Not applicable.
                       Section 302 of the
                   Sarbanes-Oxley Act of 2002

        31.2        Certification Pursuant to              Not applicable.
                       Section 302 of the
                   Sarbanes-Oxley Act of 2002

        32.1        Certification Pursuant to              Not applicable.
                       Section 906 of the
                   Sarbanes-Oxley Act of 2002


(b) Reports on Form 8-K

       None.



                                       16

<PAGE>


                                   SIGNATURES

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

Date: August 14, 2003        Travis Boats & Motors, Inc.

                             By:    /s/  Michael B. Perrine
                                -----------------------------------------------
                                Michael B. Perrine
                                Chief Financial Officer, Treasurer and Secretary
                                (Principal Accounting and Financial Officer)


                                       17