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

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

                  For the Quarterly Period Ended March 31, 2004

                                       OR

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


     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  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: 4,299,727 shares as of May 14, 2004.

<PAGE>

                                      INDEX


PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>

<S>                                                                                       <C>
Item 1.  Financial Statements
                   Consolidated Balance Sheets:
                   March 31, 2004 (unaudited) and September 30, 2003.......................1
                   Consolidated Statements of Operations:
                   Three and Six Months Ended March 31, 2004 and 2003 (unaudited)..........2
                   Consolidated Statements of Cash Flows:
                   Six Months Ended March 31, 2004 and 2003 (unaudited)....................3
                   Notes to Unaudited Consolidated 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........................16

PART II - OTHER INFORMATION

Item 3. Defaults Upon Senior Securities...................................................17
Item 6. Exhibits and Reports on Form 8-K..................................................17
Signatures................................................................................18
</TABLE>

                                       i


<PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>
Travis Boats & Motors, Inc. and Subsidiaries
Consolidated Balance Sheets
 ( in thousands, except share data )
                                                                           March 31,        September 30,
                                                                              2004              2003
                                                                          -------------    ----------------
                                                                          (unaudited)
ASSETS:
      <S>                                                                     <C>                <C>
      Current assets:
            Cash and cash equivalents                                         $  3,144           $   3,414
            Accounts receivable, net                                             8,001               5,655
            Inventories, net                                                    43,535              30,970
            Prepaid expenses and other                                             807                 914
                                                                          -------------    ----------------
              Total current assets                                              55,487              40,953

      Property and equipment:
            Land                                                                 4,924               5,124
            Buildings and improvements                                          13,510              13,611
            Furniture, fixtures and equipment                                    9,123               9,134
                                                                          -------------    ----------------
                                                                                27,557              27,869
            Less accumulated depreciation                                      (11,464)            (10,634)
                                                                          -------------    ----------------
                                                                                16,093              17,235

      Intangibles and other assets:
            Non-compete agreements, net                                            538                 731
            Other assets                                                           570                 203
                                                                          -------------    ----------------
              Total assets                                                    $ 72,688           $  59,122
                                                                          =============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
            Accounts payable                                                  $  4,108           $   2,258
            Accrued liabilities                                                  2,103               2,001
            Deposit on sale/leaseback of real property                           1,500                 ---
            Current portion of deferred gain on sale of real property              107                  87
            Floor plan and revolving line of credit                             44,585              28,658
            Current portion of notes payable, convertible subordinated
              notes and other short term obligations                             2,464               4,723
                                                                          -------------    ----------------
              Total current liabilities                                         54,867              37,727

      Deferred gain on sale of real property, net of current portion               910                 963
      Notes payable, less current portion                                        5,646               1,591
      Convertible subordinated notes, less current portion                         ---               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,
                    4,299,727 issued and outstanding                                43                  43
                  Paid-in capital                                               15,094              15,094
                  Retained deficit                                             (11,872)             (5,596)
                                                                          -------------    ----------------
              Total stockholders' equity                                        11,265              17,541
                                                                          -------------    ----------------
              Total liabilities and stockholders' equity                      $ 72,688           $ 59, 122
                                                                          =============    ================
</TABLE>

                        See notes to unaudited consolidated financial statements

                                                 1




<PAGE>
<TABLE>
<CAPTION>

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




                                                      Three Months ended        Six Months ended
                                                          March 31,                March 31,
                                                       2004       2003          2004        2003
                                                     ---------  ---------     ---------   ---------
                                                         (unaudited)               (unaudited)
<S>                                                  <C>        <C>           <C>         <C>
Net sales.......................................     $32,131    $38,132       $45,407     $56,019
Costs of goods sold.............................      25,486     30,543        36,111      44,913
                                                     ---------  ---------     ---------   ---------
Gross profit....................................       6,645      7,589         9,296      11,106

Selling, general and administrative.............       6,946      8,497        12,404      15,978
Depreciation and amortization...................         532        608         1,069       1,265
                                                     ---------  ---------     ---------   ---------
                                                       7,478      9,105        13,473      17,243
                                                     ---------  ---------     ---------   ---------
Operating loss..................................        (833)    (1,516)       (4,177)     (6,137)
Interest expense................................        (716)      (931)       (1,394)     (1,743)
Other income....................................          38         22            78          43
Impairment on sale/leaseback of real estate.....        (543)        --          (543)         --
                                                     ---------  ---------     ---------   ---------
Loss before income taxes........................      (2,054)    (2,425)       (6,036)     (7,837)
Income tax benefit..............................          --        704            --       2,533
                                                     ---------  ---------     ---------   ---------
Net loss........................................      (2,054)    (1,721)       (6,036)     (5,304)
Preferred stock dividends.......................        (120)      (120)         (240)       (240)
                                                     ---------  ---------     ---------   ---------
Net loss attributable to common shareholders....     $(2,174)   $(1,841)       (6,276)     (5,544)
                                                     =========  =========     =========   =========
Loss per share:
   Basic  and   diluted   loss  per   share   before
     preferred stock dividends..................       (0.48)     (0.40)        (1.40)      (1.22)
Preferred stock dividends.......................       (0.03)     (0.03)        (0.06)      (0.06)
                                                     ---------  ---------     ---------   ---------
Basic and diluted loss per share................     $ (0.51)   $ (0.43)      $ (1.46)    $ (1.28)
                                                     =========  =========     =========   =========
Weighted average Basic
  and Dilutive common shares outstanding........   4,299,727   4,329,727    4,299,727    4,329,727
</TABLE>
                       See notes to unaudited consolidated financial statements

                                               2
<PAGE>
<TABLE>
<CAPTION>
Travis Boats & Motors, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)

                                                                                            Six months ended
                                                                                               March 31,
                                                                                       2004                2003
                                                                                   ----------------------------------
                                                                                   (unaudited)          (unaudited)
<S>                                                                                  <C>                 <C>
Operating activities:
Net Loss                                                                             ($6,036)            ($5,304)
Adjustments to reconcile net loss to net cash used in
  Operating activities:
      Depreciation..............................................................         870                 999
      Amortization..............................................................         199                 215
      Impairment on sale/leaseback of real estate...............................         543                 ---
      Changes in operating assets and liabilities
           Accounts receivable..................................................      (2,346)             (1,803)
           Prepaid expenses.....................................................         107                (235)
           Inventories..........................................................     (12,565)             (4,654)
           Other assets.........................................................        (563)                 28
           Accounts payable.....................................................       1,850               1,513
           Accrued liabilities..................................................          41                 956
           Deferred gain on sale of real property...............................         (33)                ---
           Income tax recoverable...............................................         ---              (2,408)
                                                                                   --------------     ---------------
   Net Cash used in operating activities........................................     (17,933)            (10,693)

   Investing Activities:
      Purchase of property and equipment........................................        (395)               (124)
      Deposit on sale/leaseback of real estate..................................       1,500                 ---
      Proceeds from sale of property and equipment..............................         375                 ---
                                                                                   --------------     ---------------
   Net cash provided by/(used in) investing activities..........................       1,480                (124)

   Financing activities:
      Net increase in floorplan; revolving and other short term
      obligations...............................................................      15,981               9,451
      Proceeds from real estate refinance note..................................       5,300                 ---
      Payments on real estate notes.............................................      (4,858)                ---
      Preferred stock dividends.................................................        (240)               (240)
                                                                                  --------------     ---------------
   Net cash provided by financing activities....................................      16,183               9,211

      Change in cash and cash equivalents.......................................        (270)             (1,606)
      Cash and cash equivalents, beginning of period............................       3,414               4,253
                                                                                   --------------     ---------------
   Cash and cash equivalents, end of period.....................................     $ 3,144             $ 2,647
                                                                                   ==============     ===============
</TABLE>
                        See notes to unaudited consolidated financial statements

                                                    3
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 2004

NOTE 1 - BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared  from the  records  of Travis  Boats & Motors,  Inc.  and  subsidiaries
(collectively,  the "Company") in accordance with generally accepted  accounting
principals for interim financial information. In the opinion of management, such
financial  statements  include all  adjustments  (consisting  of only  recurring
accruals)  necessary to present fairly the financial position at March 31, 2004,
and the interim results of operations and cash flows for the three and six month
periods  ended  March  31,  2004 and 2003.  The  consolidated  balance  sheet at
September  30,  2003,  presented  herein,  has been  derived  from  the  audited
consolidated financial statements of the Company for the fiscal year then ended.

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 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,
2003  included in the  Company's  annual  Report on Form  10-K/A  filed with the
Securities  and Exchange  Commission  on February 2, 2004.  Accounting  policies
followed  by the  Company are  described  in Note 2 to the audited  consolidated
financial  statements  for the fiscal year ended  September 30, 2003 included in
the Company's annual report on Form 10-K/A.

The results of  operations  for the three and six month  periods ended March 31,
2004 are not  necessarily  indicative of the results to be expected for the full
fiscal year.

Controlling Shareholder

As of January 7, 2003,  TMRC,  LLP,  ("Tracker"),  a wholly owned  subsidiary of
Tracker Marine,  LLC, pursuant to certain agreements for assistance in financing
and other matters (the "Agreements"),  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 its ownership of 80,000  shares of the Company's  Series A Preferred
Stock, and has not yet designated two additional representatives.


                                       4


<PAGE>

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.
The adoption of this Standard had no effect on the Company's financial position,
results of operations or cash flows.

NOTE 2 - LOSS PER SHARE

(in thousands, except share data)
<TABLE>
<CAPTION>
                                                              Three Months Ended           Six Months Ended
                                                                    March 31,                  March 31,
                                                                2004        2003           2004        2003
                                                             ----------   ---------      ---------   ---------

<S>                                                         <C>          <C>    <C>     <C>         <C>
NUMERATOR
  Net   loss   before    preferred stock dividends.......      (2,054)      (1,721)        (6,036)     (5,304)
  Preferred stock dividends..............................        (120)        (120)          (240)       (240)
  Net loss attributable to common shareholders...........    $ (2,174)    $ (1,841)      $ (6,276)   $ (5,544)

Weighted average basic and diluted common shares
       outstanding.......................................   4,299,727    4,329,727      4,299,727   4,329,727

Basic  and diluted loss per share before preferred stock
       dividends.........................................        (.48)        (.40)         (1.40)      (1.22)
       Preferred stock dividends.........................        (.03)        (.03)          (.06)       (.06)

Basic and diluted loss per share attributable               ----------------------      ---------------------
       to common shareholders............................    $  (0.51)    $  (0.43)      $  (1.46)   $  (1.28)
                                                            ======================      =====================
</TABLE>
The  foregoing  table does not  include  shares  issuable  upon the  exercise of
outstanding  stock  options.  At March 31,  2004,  the  Company  had  issued and
outstanding  incentive stock options to certain employees totaling 59,600 shares
which  had  exercise  prices  equal to or  exceeding  the  closing  price of the
Company's  common stock on such date.  The 59,600  option shares have a weighted
average  exercise price of $6.30 and a weighted  average  outstanding  remaining
life of 6.3 years.

The table also  excludes  528,584  shares of common  stock  subject to  issuance
pursuant to $1.3 million in outstanding convertible subordinated notes (see Note
4) and 3,252,826  shares of common stock subject to issuance  pursuant to 80,000
shares of Series A Preferred Stock. For the three and six months ended March 31,
2004 and 2003, the  conversion  price of  approximately  $2.46 per share of both
issuances exceeded the Company's average market price of its common stock.




                                       5
<PAGE>
NOTE 3 - STOCKHOLDERS' EQUITY

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  148,   Accounting   for   Stock-Based   Compensation-Transition   and
Disclosure.  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.

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>
                                                                 Three months ended       Six months ended
                                                                     March 31,                March 31,
                                                                  2004       2003        2004        2003
                                                               -----------------------------------------------
<S>                                                             <C>         <C>        <C>          <C>
Net loss attributable to common shareholders as
     Reported                                                   $ (2,174)   $ (1,841)  $ (6,276)    $ (5,544)
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                         (29)        (35)       (58)         (93)
     methods for all awards, net of related tax effects
                                                               -----------------------------------------------
Proforma net loss attributable to common shareholders           $ (2,203)   $ (1,876)  $ (6,334)    $ (5,637)
                                                               -----------------------------------------------
Basic and Diluted Loss Per Share
Reported net loss per share attributable to common              $   (.51)   $   (.43)  $  (1.46)    $  (1.28)
     shareholders
Proforma net loss per share attributable to common              $   (.51)   $   (.43)  $  (1.47)    $  (1.30)
     Shareholders
</TABLE>

The  compensation  expense  associated  with  the  fair  value  of  the  options
calculated in the quarter and six month periods ended March 31, 2004 and 2003 is
not  necessarily  representative  of  the  potential  effects  on  reported  net
income/(loss) in future periods.



                                       6
<PAGE>
NOTE 4 - CONVERTIBLE SUBORDINATED NOTES AND NOTES PAYABLE

The Company entered into a real estate loan during November 2003 in the original
principal 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 was used for transaction  expenses and general working
capital.

On  February  6,  2004,  the  Company  agreed  to  terms  with  its  controlling
shareholder,  Tracker,  for a $500,000 line of credit.  The terms of the line of
credit are set forth in a  promissory  note  payable to Tracker on demand at any
time on or after May 5, 2004 (the  "Note").  The Note provides that the Company,
at the  discretion of the Operating  Committee of its Board of Directors,  could
request advances up to the aggregate amount of $500,000.  Advances made pursuant
to the Note bear  interest at a rate of 10% until the earlier of the date demand
is made by Tracker for  repayment or January 5, 2005 at which time the rate will
increase  to 18% on any unpaid  principal  and  accrued,  but  unpaid,  interest
amounts. The Note is generally  unsecured,  subject to Tracker retaining a right
of offset  with  respect  to any cash,  credits,  rebates,  deposits,  accounts,
securities,  and any other  property  of the  Company in  Tracker's  possession,
custody or control.

As of the date this report on Form 10-Q, the Company has borrowed $340,000 under
the Note and has made  payments  to reduce the  current  outstanding  balance to
$133,500.

NOTE 5 - SHORT TERM BORROWINGS

Inventory Borrowing Agreements

The Company finances  substantially  all of its inventory  pursuant to borrowing
agreements (the "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).  During  the  quarter  ended  March 31,  2004,  TCFC was
acquired by GE. The Borrowing Agreements contain substantially similar terms and
financial  covenants,  however the Company's agreements with GE remain separate.
As of March 31, 2004, the maximum aggregate  borrowing  availability was limited
to a maximum  seasonal  credit limit of $60.0  million at various prime based or
LIBOR based interest rates (varying from 4.12% to 4.75%) of which  approximately
$44.6 million was funded, and an additional $874,000 was allocated for inventory
orders in process.  The Borrowing  Agreements  are primarily for the purchase of
inventories and, to a far lesser extent,  provide  available amounts for general
working capital requirements based upon levels of certain used inventory,  parts
inventory  and  accounts  receivable.  As of March 31, 2004,  the Company  could
request  advances for  additional  new  inventories up to its $60 million credit
limit,  but did not have  additional  material  amounts  that could be  advanced
solely for general working capital uses.

                                       7
<PAGE>

NOTE 6 - SALE/LEASEBACKS

In March of 2004,  the Company  completed a  sale/leaseback  transaction  of its
store  location in San  Antonio,  Texas.  The sales price  included  the Company
receiving a $1.5 million cash down payment and a short term  promissory  note of
$1.0 million. Accordingly, the transaction has been accounted for as a financing
transaction  and the $1.5 million cash down payment  received has been accounted
as  a  deposit   liability.   The  transaction   will  be   re-classified  as  a
sale/leaseback  pursuant to Statement of Financial Accounting Standards ("SFAS")
No.  98  upon  the  Company's  receipt  of the  remaining  $1.0  million  amount
outstanding pursuant to the short term promissory note.

In April of 2004,  the Company  completed a  sale/leaseback  transaction  of its
store location in Claremore, Oklahoma. The transaction has been accounted for as
a  sale/leaseback  pursuant  to  Statement  of  Financial  Accounting  Standards
("SFAS")  No.  98.  The  property  was sold at a sales  price  of  approximately
$560,000 and leased back by the Company pursuant to an operating lease. The gain
of  approximately  $80,000  resulting  from  the  sale of the  property  will be
classified  as a  Deferred  Gain and will be  amortized  ratably  over the lease
period which is approximately 5 years.

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

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF
"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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/A filed for
the fiscal year ended  September 30, 2003, and other  documents  filed of record
with the Securities and Exchange Commission.

                              RESULTS OF OPERATIONS

Overview

Travis Boats & Motors,  Inc. Travis Boats & Motors,  Inc.  ("Travis  Boats," the
"Company" or "we") is a 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).

                                       8
<PAGE>

The Company was incorporated as a Texas  corporation in 1979. Since our founding
as a  single  retail  store  in  Austin,  Texas,  we  have  grown  both  through
acquisitions and the opening of new "start-up"  store  locations.  It was during
the 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  significant   inventory   stocking
requirements  for  multi-stores  allowed us to  maximize  volume  discounts  and
introduce  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.

Based  on sales  trends  from the  cities  and  states  where we  operate  store
locations,  we 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  to  often  include
distinguishing  features/branded  models and accessories  within the base Travis
Edition price. It is the Company's belief that these features/branded models and
accessories 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.  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  also  sell  motors,  trailers,
accessories and related equipment.

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,  we are able to offer boat packages to customers with
different purchasing budgets and varying income levels.

The  Company  seeks  to  provide  customers  with 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.

Quarter  Ended  March  31,  2004.  The  Company   reported  a  pre-tax  loss  of
approximately $2.1 million, on net sales of $32.1 million,  for the three months
ended March 31, 2004 versus a pre-tax loss of approximately $2.4 million, on net
sales of $38.1 million for the same quarter of the prior fiscal year. Due to the
seasonal nature of our business, our sales have traditionally been significantly
lower in the quarter ending December 31 and increase following the conclusion of
our boat show season,  which usually begins in January and continues through the
end of March.  The decrease in net sales  relative to the same quarter last year
was  related to various  factors  including,  but not  limited  to,  significant
product and brand  transition  whereby the  Company  eliminated  yacht sales and
began the  introduction of new models of off-shore  fishing boats to replace its
previously  carried  comparable  product  line.   Significant  initial  stocking
requirements resulted in limited product assortment and availability of this new
product  in the six  months  ended  March 31,  2004.  In  addition,  some of the
operating  losses  experienced  during  the  quarter  ended  March 31,  2004 are
non-cash  charges for  impairment  of real estate  pursuant to a  sale/leaseback
transaction.  To  substantially  reduce or eliminate the operating  losses,  the
Company has  implemented  a number of key  initiatives  designed  to  ultimately
improve the Company's financial  condition.  These initiatives  include, but are
not  limited  to,  the  consolidation  of our  vendor  relationships  to improve
inventory turns,  assortments and product consistency in our stores.  Management
is optimistic  that the Company's  recent  efforts  related to product and brand
transition,  reductions in obsolete  inventory,  and improved  supply chain will
have long-term positive impact on performance.

                                       9
<PAGE>

RESULTS OF OPERATIONS

Quarter Ended,  March 31, 2004 Compared to the Quarter Ended, March 31, 2003 and
Six Months Ended March 31, 2004 Compared to the Six Months Ended March 31,2003.

Net Sales.  Net sales in the second  quarter of fiscal 2004  decreased  to $32.1
million,  compared to net sales of $38.1 for the second  quarter of fiscal 2003.
For the six months ended March 31, 2004,  net sales  decreased to $45.4 million,
compared to $56.0 million during the same period of the prior fiscal year.

     The decrease in net sales during the quarter and six months ended March 31,
2004  included  approximately  $1.8 million and $2.8 million,  respectively,  in
reduced  sales as a result of the impact of fewer stores in operation (30 versus
34) and a decrease in comparable  store sales.  Comparable store sales decreased
by approximately 11% and 14 % (30 stores in base) for the quarter and six months
ended  March  31,  2004,  respectively.  Management  believes  the  decrease  in
comparable store sales was related to various factors including, but not limited
to  significant  product and brand  transition.  This  included  the  previously
announced   decision  to  eliminate  yacht  sales,   which  reduced  revenue  by
approximately $1.5 million and $3.0 million for the quarter and six months ended
March 31, 2004, respectively. Additionally, during the fall of 2003, the Company
began the  introduction of new models of off-shore  fishing boats to replace its
previously carried comparable  product line. The Company's  significant  initial
stocking requirements  contributed to only a limited assortment and selection of
the new boats being  received  by the Company  during the quarter and six months
ended March 31, 2004.  The impact to net sales of yachts and  off-shore  fishing
boats from these and other related issues was a decrease of  approximately  $3.3
million and $7.0 million in sales for the quarter and six months ended March 31,
2004, respectively, versus the same periods of the prior fiscal year. Comparable
store sales  excluding  the impact of the sale of yachts and  off-shore  fishing
boats were flat for the quarter ended March 31, 2004.

Management  believes  that the  impact  of the  significant  product  and  brand
transition  on net sales will diminish in the quarter ended June 30, 2004. As of
the date of this  Report on Form  10-Q,  the  Company  has  received  additional
stocking levels of the new product offerings and the Company expects to continue
to receive significant additional stocking levels of the new products in advance
of the summer sales season.

Gross Profit.  Gross profit decreased by 12.4% to approximately  $6.6 million in
the second  quarter  of fiscal  2004 from $7.6  million  in the same  quarter of
fiscal 2003.  Gross profit,  as a percent of net sales,  increased to 20.7% from
19.9% during the same  periods.  For the six months ended March 31, 2004,  gross
profit  decreased 16.3% to $9.3 million from $11.1 million in the same period of
the prior year.  Gross  profit,  as a percent of sales,  increased to 20.5% from
19.8% during the same period.

The increase in gross profit as a percent of net sales was primarily  related to
(i) increases in the sale of parts and accessories as a percent of net sales and
(ii) improved margins on the sales of our new and used boat,  motor, and trailer
inventory. We believe that gross profit, as a percent of net sales, may continue
to grow during  fiscal 2004 over  comparable  periods of fiscal 2003 because the
Company's  gross profit in fiscal year 2003 was adversely  impacted by Company's
aggressive   sell-through  of  substantial  amounts  of  aged  and  discontinued
inventories  at reduced sales prices and margins.  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.

                                       10

<PAGE>

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 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 sold.

     Net sales of these products contributed  approximately  $975,000, or 14.7%,
and $1.3 million, or 13.9%, of total gross profit for the quarter and six months
ended March 31, 2004,  respectively,  as compared to $1.3 million, or 17.6%, and
$1.7 million,  or 15.6%, of total gross profit for the same periods of the prior
fiscal year.  Management  believes that the decrease in F&I income is related to
the sale of fewer extended service  contracts during the quarter ended March 31,
2004 as a result of certain original equipment  manufacturers ("OEM") increasing
the coverage  term of the standard OEM  warranties  as marketing  incentives  to
retail purchasers during the boat show season.

     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.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  decreased  to $6.9  million in the  second  quarter of
fiscal  2004 from $8.5  million  for the  second  quarter of fiscal  2003.  As a
percent of net sales, selling,  general and administrative expenses decreased to
21.6% in the second  quarter of fiscal 2004 from 22.3% for the second quarter of
fiscal  2003.  For the six months  ended March 31,  2004,  selling,  general and
administrative  expenses  were $12.4  million,  or 27.3% as a percentage  of net
sales,  versus $16.0 million,  or 28.5% as a percentage of net sales in the same
period of the prior fiscal year.

     These  reductions in expenses  were  generally  related to operating  fewer
store  locations (30 vs 34) and the expense  containment  strategies  adopted in
fiscal 2003 in conjunction  with the business plan implemented by the Company 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.  Although rent expenses declined in actual
dollars,  this was somewhat  offset by increased rents resulting from new leases
on three (3) stores pursuant to sale/leaseback  transactions completed beginning
in September 2003 (see Depreciation and Amortization Expenses).

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
decreased to $532,000 in the second quarter of fiscal 2004 from $608,000 for the
second quarter of fiscal 2003.  Depreciation  and  amortization  expenses,  as a
percentage of net sales, were 1.7% and 1.6% for the quarter ended March 31, 2004
and 2003,  respectively.  Depreciation  and  amortization  expenses  declined to
approximately  $1.1  million  for the six months  ended March 31, 2004 from $1.3
million for the same period of the prior fiscal year.

                                       11
<PAGE>

     The decrease in depreciation and amortization  expenses, in actual dollars,
was primarily  attributable  to reductions in fixed assets (real estate) related
to the  sale  of  three  (3)  stores  pursuant  to  sale/leaseback  transactions
effective  beginning in September 2003 (see Selling,  General and Administrative
Expenses ).

Interest  Expense.  Interest expense decreased to $716,000 in the second quarter
of fiscal 2004 from  $931,000  in the second  quarter of fiscal  2003.  Interest
expense, as a percent of net sales,  decreased to 2.2% from 2.4% of net sales in
the same periods.

     The decreased  interest  expense 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. The Company has successfully reduced
inventory  levels from improved  supply chain  management and as a result of the
sell-through of aged and discontinued inventories during fiscal 2003.

     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

Impairment on Sale/Leaseback of Real Estate. We recorded a non-cash,  impairment
charge of $543,000  during the  quarter  ended March 31,  2004.  The  impairment
charge was the result of the  Company's  completion of a  sale/leaseback  of its
store location in San Antonio, Texas. The sales price included $1.5 million cash
and a short term promissory note of $1.0 million.  Accordingly,  the transaction
has been accounted for as a financing transaction pending the buyer's payment of
the short term note at which time the  transaction  will be  re-classified  as a
sale/leaseback  pursuant to Statement of Financial Accounting Standards ("SFAS")
No. 98.

Income Taxes. 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,  pursuant to SFAS No. 109, the Company has not
recognized  any 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.  Accordingly,  the Company did not record an
income tax benefit for the three or six month periods ended March 31, 2004.

     For the six months  ended March 31, 2004,  the Company  reported a net loss
attributable to common shareholders of $6.3 million ($1.46 per basic and diluted
share) versus a net loss  attributable  to common  shareholders  of $5.5 million
($1.28  per basic and  diluted  share) for the same  period of the prior  fiscal
year.

     The increase in the net loss  attributable  to common  shareholders  in the
quarter and the six months ended March 31, 2004  resulted from the impact of the
non-cash  impairment  charge of $543,000 and the Company not recognizing  income
tax benefits pursuant to SFAS No. 109.

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").

On March 31, 2004, we had  approximately  $3.1 million in cash,  $8.0 million in
accounts   receivable   (primarily   contracts   in  transit  from  boat  sales,
manufacturer  rebates  receivable and other amounts due from  manufacturers) and
$43.5 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  $6.2
million of accounts payable and accrued  liabilities,  $44.6 million outstanding
under our  borrowing  agreements  and  approximately  $2.5 million in short-term
indebtedness  including  current  maturities of notes  payable of  approximately
$824,000;  plus  $340,000  payable  under  a short  term  note  to  Tracker  and
convertible subordinated promissory notes of $1.3 million.

                                       12
<PAGE>

On March 31, 2004, we had working  capital of  approximately  $620,000.  Working
capital,  as of that  date,  was  negatively  impacted  by the net  loss and the
aforementioned  $2.5  million in current  portion  of  short-term  indebtedness.
Working  capital  also was reduced  $1.5  million by a cash down  payment on the
sale/leaseback  of real  estate.  The cash  down  payment  is  accounted  for as
liability   until  the   transaction   is  finalized  and  accounted  for  as  a
sale/leaseback pursuant to SFAS No. 98.

For the six months  ended March 31, 2004,  operating  activities  utilized  cash
flows of $17.9  million  due  primarily  to an  increase  of  $12.6  million  in
inventories.  The Company  historically builds inventory balances during the six
months  ended March 31, in advance of the  seasonal  boat shows.  The boat shows
generally  begin  during  January  and  continue  through  March  of each  year.
Historically, inventory continues to increase through the March quarter based on
boat show volumes and seasonal sales increases.  Inventories generally fall to a
seasonal low in the September quarter.

For the six months  ended March 31, 2004,  investing  activities  provided  cash
flows of $1.5 million.  This was  primarily a result of the Company  selling the
land and buildings  associated with a location in Little Rock, Arkansas that had
been closed during the 2003 fiscal year offsetting capital expenditures,  offset
by receipt by the Company of a $1.5 million deposit on a sale/leaseback  of real
estate.

Financing activities during the quarter ended March 31, 2004 provided cash flows
of $16.2 million  primarily  from the net proceeds of funds  borrowed  under our
inventory Borrowing  Agreements for the purchase of our off-season and boat show
inventories.  Our primary financing agreements are for the purchase of our boat,
motor and trailer inventories.

Borrowing  Agreements.  The Company finances  substantially all of its inventory
pursuant to its 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. During the quarter ended March 31, 2004, TCFC was acquired
by  GE.  The  Borrowing  Agreements  contain  substantially  similar  terms  and
financial  covenants,  however the Company's borrowing agreements with GE remain
separate. As of March 31, 2004, the maximum aggregate borrowing availability was
limited to a maximum  seasonal  credit limit of $60.0  million at various  prime
based or LIBOR  based  interest  rates  (varying  from  4.12% to 4.75%) of which
approximately  $44.6  million was funded and $874,000  allocated  for  inventory
orders in process.  The Borrowing  Agreements  are primarily for the purchase of
inventories and, to a far lesser extent,  provide  available amounts for general
working capital requirements based upon levels of certain used inventory,  parts
inventory  and  accounts  receivable.  As of March 31, 2004,  the Company  could
request  advances for  additional  new  inventories up to its $60 million credit
limit,  but did not have  additional  material  amounts  that could be  advanced
solely for general working capital uses.


                                       13
<PAGE>

Effective  with the  submission  of its results  for the period  ended March 31,
2004, the Company was out of compliance  with several  financial  covenant terms
and  conditions  of its Borrowing  Agreements.  TCFC and GE provided the Company
with a waiver of such covenant  violations  provided that the Company arranges a
meeting  prior to June 3,  2004  with its  lenders  to  discuss  its  plans  for
improving its financial  performance and also provided that no further  defaults
occur prior to the maturity date of October 30, 2004.

While  the  Company  intends  to  display  to  its  lenders  that  it  has  made
improvements  in its underlying  financial  performance  and request  additional
renewals of its credit line with  substantially  similar  terms and  conditions,
there can be no  assurance  that such will be  granted  or that  credit  will be
available  with terms and  conditions  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  would have a material
adverse  effect on our business,  financial  condition and results of operations
and require us to seek additional equity  capitalization or alternate sources of
financing.

$5,300,000  Real Estate Loan. The Company entered into a real estate loan during
November 2003 in the original  principal 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  was used for  transaction
expenses and general working capital. The loan is secured by a first lien on the
land and  buildings  of the  Company's  store  locations  in  Atlanta,  Georgia;
Clearwater,  Florida,  San  Antonio,  Texas;  Claremore,  Oklahoma;  Pascagoula,
Mississippi;  and Bossier City, Louisiana and Baton Rouge,  Louisiana. As of the
date of this report on Form 10-Q, the outstanding  principal balance on the loan
has been reduced to $3,700,000 as a result of payments related to sale/leaseback
transactions  in San Antonio,  Texas and Claremore,  Oklahoma.  The loan will be
reduced by an  additional  $1.0  million upon the  collection  of the short term
promissory  note  received by the  Company  pursuant to terms of its San Antonio
transaction.

$500,000  Line of Credit From  Tracker.  Due in part to the  additional  working
capital requirements needed to facilitate the Company's  significant product and
brand transition  (primarily the  introduction of off-shore  fishing boat models
and  elimination  of  its  yacht  sales)  and  the  seasonal  decline  in  sales
experienced  during the quarter  ended  December  31, 2003,  management  and the
Company's  controlling  shareholder  determined that additional  working capital
financing was necessary to enhance general working capital. Such working capital
was needed in anticipation of the Company's  historic  seasonal volume increases
in net sales from the boat shows  beginning  in January  and also to  adequately
prepare the Company for the increase in demand traditionally associated with the
spring and summer months.

On  February  6,  2004,  the  Company  agreed  to  terms  with  its  controlling
shareholder,  Tracker,  for a $500,000 line of credit.  The terms of the line of
credit are set forth in a  promissory  note  payable to Tracker on demand at any
time on or after May 5, 2004 (the  "Note").  The Note provides that the Company,
at the  discretion of the Operating  Committee of its Board of Directors,  could
request advances up to the aggregate amount of $500,000.  Advances made pursuant
to the Note bear  interest at a rate of 10% until the earlier of the date demand
is made by Tracker for  repayment or January 5, 2005 at which time the rate will
increase  to 18% on any unpaid  principal  and  accrued,  but  unpaid,  interest
amounts. The Note is generally  unsecured,  subject to Tracker retaining a right
of offset  with  respect  to any cash,  credits,  rebates,  deposits,  accounts,
securities,  and any other  property  of the  Company in  Tracker's  possession,
custody or control.

                                       14

<PAGE>

As a  pre-condition  to the Note,  Tracker  required  that the Company  take the
following  actions,  all of  which  were  approved  by the  Company's  board  of
directors on February 6, 2004:

o    Declare a cash dividend, payable on or before May 5, 2004, in the aggregate
     amount of $240,000 to Tracker as the holder of all of the  Corporation's 6%
     Series  A  Cumulative  Convertible  Preferred  Stock  with  respect  to the
     quarters ended September 30, 2003, and December 31, 2003.

o    Re-establish  the  Operating  Committee  of our  Board  of  Directors.  The
     Operating Committee,  which consists of Kenneth N. Burroughs,  Robert Ring,
     and Richard Birnbaum,  is to: determine whether  additional  borrowings are
     necessary  pursuant  to the Note,  and with  respect  thereto,  review  the
     overall financial  operations and expenses of the Company.  Such duties may
     be performed  without the  necessity of further  actions or approval by the
     entire Board of Directors.

As of the date this report on Form 10-Q, the Company has borrowed $340,000 under
the Note and has made  payments  to reduce the  current  outstanding  balance to
$133,500.  The Company has declared the cash dividend in the aggregate amount of
$240,000 but has advised  Tracker that it presently  intends to pay the dividend
in June of 2004  with  anticipated  operating  cash  flows  from  projected  May
revenues. Tracker has agreed to this request.

As evidenced by management's  decision to seek additional  financing in the form
of the Note, further shortfalls or variances from anticipated performance or the
timing of certain  expenses or revenues  may 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.

SEASONALITY

Our business,  as well as the sales demand for various types of boats,  tends to
be highly seasonal.  Our strongest sales period  historically 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 additional 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.  The
Company also believes that the net sales for the six months ended March 31, 2004
were impacted by the significant product and brand transition. This included the
elimination  of yacht  sales and the  Company's  introduction  of new  models of
off-shore fishing boats.  Accordingly,  the results for any quarterly period may
not be indicative of the expected  results for any other  quarterly  period (see
Net sales).


                                       15
<PAGE>
                           NASDAQ LISTING REQUIREMENTS

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 January 15, 2004 we were  notified by 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 Nasdaq Small Cap Market.  Later,  by letter dated as
of April 8, 2004 we were notified by Nasdaq that we had regained compliance.

In addition,  Nasdaq recently adopted a number of corporate  governance  listing
standards  that must be  satisfied  to maintain  listing on the Nasdaq Small Cap
Market.  These  standards  require,  among other things,  that a company's audit
committee (i) have only "independent" members, and (ii) adopt a qualifying audit
committee charter.  While the Company is exempt under Nasdaq Rule 4350(c)(5) and
Nasdaq IM-4350-4 from many of the new governance  standards due to its status as
a "controlled  company," it will  nevertheless need to assess the need to comply
with  certain  other  material  requirements  in advance  of  issuing  its proxy
statement for the next annual meeting.

Failure to  maintain  the  listing of our common  stock on the NASDAQ  Small Cap
Market would adversely impact the liquidity of the Company's common stock.

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 March 31, 2004, a  hypothetical  100 basis point change in interest  rates on
the  Company's  borrowing  agreement  obligations  would  result  in a change of
approximately  $446,000 in annual pre-tax expenses of the Company. The estimated
change in expenses is based upon the change in interest expense of the Company's
borrowing  agreement  obligations  and  assumes  no  change  in  the  volume  or
composition of such debt at March 31, 2004.

Item 4. Controls and Procedures

An evaluation as of the end of the period covered by this  quarterly  report was
carried out under the  supervision and with the  participation  of the Company's
management,  including the Company's  President and Chief Financial Officer,  of
the  effectiveness  of the design and  operation  of the  Company's  "disclosure
controls and  procedures"  (as defined in Rule  13a-15(e)  under the  Securities
Exchange  Act of 1934  (the  "Exchange  Act").  Based  on that  evaluation,  the
President and Chief Financial Officer concluded that our disclosure controls and
procedures  are effective in timely  making known to them  material  information
required to be  disclosed in our reports  filed or submitted  under the Exchange
Act. There has been no change in our internal  control over financial  reporting
during the  quarter  ended March 31, 2004 that has  materially  affected,  or is
reasonably likely to affect, our internal control over financial reporting.

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<PAGE>
                           PART II. OTHER INFORMATION


Item 3. Defaults Upon Senior Securities

Effective  with the  submission  of its results  for the period  ended March 31,
2004, the Company was out of compliance  with several  financial  covenant terms
and  conditions  of its Borrowing  Agreements.  TCFC and GE provided the Company
with a waiver of such covenant  violations  provided that the Company arranges a
meeting  prior to June 3,  2004  with its  lenders  to  discuss  its  plans  for
improving its financial  performance and also provided that no further  defaults
occur prior to the maturity date of October 30, 2004.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

        31.1           Certification of Chief Executive Officer
                       Pursuant to Rule 13a-14(a) of the Exchange Act

        31.2           Certification of Chief Financial Officer
                       Pursuant to Rule 13a-14(a) of the Exchange Act

        32.1           Certification of Chief Executive Officer and
                       Chief Financial Officer Pursuant to Rule 13a-14(b)
                       of the Exchange Act and 18 U.S.C. Section 1350,
                       as Adopted Pursuant to Section 906 of the
                       Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

During the quarter  ended March 31, 2004 through the date of this Report on Form
10-Q, the Company filed the following Reports on Form 8-K:

     January 12, 2004 Report on Form 8-K for financial  statements  and exhibits
     including incorporation of press releases dated May 6, 2003; August 4, 2003
     and December 2, 2003 issued by the Company.

     February 3, 2004 Report on Form 8-K for financial  statements  and exhibits
     including  incorporation of press releases dated February 3, 2004 issued by
     the Company.

     February  20,  2004  Report  on Form 8-K for  announcement  of  changes  in
     certifying accountant's for the Company.

     April 7, 2004 Report on Form 8-K for  announcement of changes in certifying
     accountant's for the Company.

     April 29, 2004 Report on Form 8-K for  financial  statements  and  exhibits
     including  incorporation  of press  releases dated April 29, 2004 issued by
     the Company.

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<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: May 17, 2004                  Travis Boats & Motors, Inc.

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





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