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 December 31, 2001

                                       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)



             5000 Plaza on the Lake, Suite 250, Austin, Texas 78746
                    (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 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 - 4,346,527 shares as of February 15, 2002.



<PAGE>

<TABLE>
<CAPTION>

                                      INDEX


PART I - FINANCIAL INFORMATION

<S>                        <C>                                                                                    <C>
Item 1:  Financial Statements (Unaudited):
                           Condensed Consolidated Balance Sheet:
                           December 31, 2001 and September 30, 2001................................................1

                           Condensed Consolidated Statement of Operations:
                           Three Months Ended December 31, 2001 and 2000...........................................2

                           Condensed Consolidated Statement of Cash Flows:
                           Three Months Ended December 31, 2001 and 2000...........................................3

                           Notes to Condensed Financial Statements.................................................4

Item 2:..Management's Discussion and Analysis of Financial
                           Condition and Results of Operations.....................................................5



PART II - OTHER INFORMATION

Items 1 - 6........................................................................................................9

Signatures........................................................................................................10

</TABLE>

                                       i

<PAGE>

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements



Travis Boats & Motors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
 ( in thousands, except share data )
                                                                            December 31,       September 30,
                                                                                2001               2001
                                                                           -------------     ----------------
                                                                            (unaudited)
<S>                                                                          <C>                 <C>
ASSETS:
      Current assets:
            Cash and cash equivalents                                        $   1,644           $   1,388
            Accounts receivable, net                                            10,124              11,351
            Inventories, net                                                    73,959              65,164
            Income Taxes Recoverable/Deferred tax asset                          2,989               1,432
            Prepaid expenses and other                                             883                 779
                                                                          -------------    ----------------
              Total current assets                                              89,599              80,114

      Property and equipment:
            Land                                                                 5,982               5,982
            Buildings and improvements                                          15,517              15,485
            Furniture, fixtures and equipment                                    8,796               8,762
                                                                          -------------    ----------------
                                                                                30,295              30,229
            Less accumulated depreciation                                       (8,399)             (7,887)
                                                                          -------------    ----------------
                                                                                21,896              22,342

      Deferred tax asset                                                           488                 488

      Intangibles and other assets:
            Goodwill                                                             8,809               8,809
            Non-compete agreements, net                                          1,492               1,607
            Other assets                                                           320                 320
                                                                          -------------    ----------------
              Total assets                                                   $ 122,604           $ 113,680
                                                                          =============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
            Accounts payable                                                 $   6,612           $   5,875
            Accrued liabilities                                                  1,157               1,203
            Floor plan and revolving line of
            credit                                                              66,245              58,874
            Current portion of notes payable and other short-term
            obligations                                                          1,098               2,204
                                                                          -------------    ----------------
              Total current liabilities                                         75,112              68,156

      Notes payable, less current portion                                       10,155               9,375
      Convertible Subordinated Notes                                             4,300                  --

      Stockholders' equity
                 Serial Preferred stock, $.01 par value, 1,000,000
                 Shares Authorized, no shares outstanding                           --                  --
            Common Stock, $.01 par value, 50,000,000 authorized,
                 4,355,081 and 4,374,941 issued and outstanding at
                 December 31, 2001 and September 30, 2001, respectively             44                  44
            Paid-in capital                                                     15,334              15,342
            Retained earnings                                                   17,659              20,763
                                                                          -------------    ----------------
              Total stockholders' equity                                        33,037              36,149

                                                                          -------------    ----------------
              Total liabilities and stockholders' equity                     $ 122,604           $ 113,680
                                                                          =============    ================
</TABLE>

       See notes to unaudited condensed consolidated financial statements



<PAGE>

<TABLE>
<CAPTION>


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

                                                                       Three months ended
                                                                           December 31,

                                                                      2001              2000
                                                                -------------------------------
<S>                                                              <C>               <C>
Net sales.....................................................   $    20,666       $    24,084
Cost of goods sold............................................        16,601            18,306
                                                                -------------     -------------

Gross profit..................................................        4,065             5,778

Selling, general and administratiave..........................         7,314             8,379
Depreciation and amortization.................................           627               700
                                                                -------------     -------------
                                                                       7,941             9,079

Operating loss................................................        (3,876)           (3,301)
Interest expense..............................................        (1,039)           (1,847)
Other income..................................................            17                11
                                                                -------------     -------------

Loss before income taxes......................................        (4,898)           (5,137)
Income tax benefit............................................        (1,794)           (1,881)
                                                                -------------     -------------

Net Loss......................................................       ($3,104)          ($3,256)
                                                                =============     =============

Basic and Diluted Loss Per Share..............................        ($0.71)           ($0.74)

Weighted avg. basic and dilutive common shares outstanding....     4,355,081         4,387,228

Stores open at end of period..................................            37                39
                                                                =============     =============
</TABLE>

       See notes to unaudited condensed consolidated financial statements

                                       2

<PAGE>


<TABLE>
<CAPTION>

Travis Boats & Motors, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)

                                                                                           Three months ended
                                                                                               December 31,

                                                                                         2001                2000
                                                                                   ----------------------------------
<S>                                                                                   <C>                 <C>
Operating activities:
Net Loss                                                                                ($3,104)            ($3,256)
Adjustments to reconcile net loss to net cash used in
  Operating activities:
      Depreciation..............................................................            512                 481
      Amortization..............................................................            115                 219
      Changes in operating assets and liabilities
           Accounts receivable..................................................          1,227                 820
           Prepaid expenses.....................................................           (104)               (288)
           Inventories..........................................................         (8,795)            (20,720)
           Other assets.........................................................              0                   7
           Accounts payable.....................................................            737               1,827
           Accrued liabilities..................................................            (46)                  5
           Income tax recoverable/income tax payable............................         (1,557)             (1,676)

                                                                                   --------------     ---------------
      Net Cash used in operating activities.....................................        (11,015)            (22,581)

      Investing Activities:
      Purchase of property and equipment........................................            (66)               (557)

                                                                                   --------------     ---------------
      Net cash used in investing activities.....................................            (66)               (557)

      Financing activities:

      Proceeds from issuance of Convertible Subordinated Notes..................          4,300                   0
      Net increase in notes payable and other short term obligations............          7,045              23,286
      Net proceeds (payments) from issuance
         (repurchase) of common stock                                                        (8)                (60)
                                                                                   --------------     ---------------
      Net cash provided by financing activities.................................         11,337              23,226
      Change in cash and cash equivalents.......................................            256                  88
      Cash and cash equivalents, beginning of period............................          1,388               2,971

                                                                                   --------------     ---------------
      Cash and cash equivalents, end of period..................................      $   1,644           $   3,059
                                                                                   ==============     ===============
</TABLE>

       See notes to unaudited condensed consolidated financial statements

                                       3



              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2001


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 December 31,
2001;  and the interim  results of operations and cash flows for the three month
periods ended  December 31, 2001 and 2000.  The condensed  consolidated  balance
sheet at September  30,  2001,  presented  herein,  has been  prepared  from the
audited  consolidated  financial  statements  of the Company for the fiscal year
then ended.  Certain  amounts have been  reclassified  to conform to the current
presentation.

Accounting  policies  followed  by the Company  are  described  in Note 1 to the
audited  consolidated  financial  statements for the fiscal year ended September
30, 2001.  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, 2001 included in the Company's Annual Report on Form 10-K.

The results of operations for the three month period ended December 31, 2001 are
not  necessarily  indicative  of the results to be expected  for the full fiscal
year.

NOTE 2 - NET LOSS PER COMMON SHARE

In 1997, the Financial  Accounting Standards Board issued Statement of Financial
Accounting  Standards  No. 128,  Earnings Per Share.  Statement 128 replaced the
previously  reported primary and fully diluted earnings per share with basic and
diluted earnings per share.  Unlike primary  earnings per share,  basic earnings
per share excludes any dilutive  effects of options,  warrants,  and convertible
securities.  Diluted  earnings  per  share  is very  similar  to the  previously
reported  fully diluted  earnings per share.  All earnings per share amounts for
all periods have been presented, and where necessary, restated to conform to the
Statement 128 requirements.

Statement 128 requires the  calculation  of earnings per share to exclude common
stock  equivalents  when the  inclusion of such would be  anti-dilutive.  In the
quarters  ended  December  31,  2001 and 2000,  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 following table sets forth the computation of basic and diluted net loss per
share:

                                 Three Months Ended           Three Months Ended
                                 December 31, 2001            December 31, 2000
                                 -----------------         -----------------

Numerator:
         Net loss                  ($3,104,000)                ($3,256,000)
                                    --------------------------------------------
Denominator:
         Denominator for basic
         Earnings per share -
         Weighted avg. shares        4,355,081                   4,387,228

Effect of dilutive securities:
         Employee stock options        -------                     -------
                                    --------------------------------------------

                                       4

<PAGE>


Dilutive potential common shares       -------                     -------

Denominator for diluted earnings
         Per share - adjusted
         Weighted average shares     4,355,081                   4,387,228
         And assumed conversions _______________________________________________

Basic loss per share                    ($0.71)                     ($0.74)
                                 -----------------------------------------------

Diluted loss per share                  ($0.71)                     ($0.74)
                                 -----------------------------------------------


As of December 31, 2001, the Company had issued and outstanding  incentive stock
options to certain  officers,  directors and employees  totaling  404,964 shares
which had a strike price  exceeding the closing  price of the  Company's  common
stock on such date.  The 404,964  option shares have a weighted  average  strike
price of $6.80 and a weighted average outstanding remaining life of 6.42 years.

NOTE 3 - 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
quarter ended December 31, 2001 consisted of the following:



     Shares Repurchased (000's)                 8.5
     Total Purchase Price (000's)               $18
     Average Price per Share                    $2.12

NOTE 4  - CONVERTIBLE SUBORDINATED NOTES

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

                                       5

<PAGE>

The Notes were issued in the  collective  form of a $3.0 million Note plus other
Notes in the aggregate amount of $1.3 million. By letter dated as of February 8,
2002,  the Company  issued  notice to the holder of the $3.0 million Note of the
Company's  intent to prepay the Note, plus all accrued interest and the required
5%  prepayment  fee, on or about June 10,  2002.  The Company does not intend to
utilize its current cash  reserves to prepay the $3.0 million Note and is highly
confident that current  negotiations with a third party will provide alternative
funding in an amount exceeding the required prepayment prior to June 10, 2002.

NOTE 5  - SHORT TERM BORROWINGS

The Company  finances  substantially  all of its inventory  and working  capital
requirements  pursuant  to  borrowing  agreements  with two  commercial  finance
companies -- Transamerica  Distribution  Finance ("TDF") and Deutsche  Financial
Services  ("DFS").  Effective as of December 14, 2001, the Company  entered into
amended  loan  agreements.   Concurrent  with  execution  of  the  amended  loan
agreements,  the Company received  waivers on all financial  covenants that were
previously  in  non-compliance  with the  prior  agreements.  The  amended  loan
agreements also provide for certain  revisions to (i) future  financial  ratio's
and (ii) the maximum amount which the Company may borrow from the current amount
of $90  million to  varying  reduced  amounts  through  July of 2002,  when such
maximum  amount will be  established  at $70 million until the expiration of the
borrowing  agreements in January of 2003.  Management  believes that the maximum
available  credit  amounts under its credit lines  conform with the  anticipated
inventory purchasing plans of the Company during fiscal 2002.

NOTE 6  - GOODWILL AND OTHER INTANGIBLES

The Company adopted SFAS No. 142,  Goodwill and Other  Intangible  Assets ("SFAS
142")  effective  October 1, 2001.  SFAS 142  discontinues  the  amortization of
goodwill and requires  future periodic  testing of goodwill for  impairment.  In
addition,  SFAS 142  requires  reassessment  of the useful  lives of  previously
recognized intangible assets.

With the adoption of the Statement,  the Company ceased amortization of goodwill
as of October 1, 2001. The following table presents the quarterly results of the
Company on a comparable basis:


<TABLE>
<CAPTION>

                                                                       Three Months Ended December 31,
                                                                            2001              2000
                                                                      ----------------------------------
<S>                                                                      <C>             <C>
Reported net loss                                                       ($3,104,000)     ($3,256,000)
Goodwill amortization, net of tax                                            ---            (139,000)
                                                                      ----------------------------------
Adjusted net loss                                                       ($3,104,000)     ($3,117,000)
                                                                      ==================================

Basic and Diluted loss per share:
      Reported net loss                                                      ($0.71)          ($0.74)
      Goodwill amortization, net of tax                                        ---            ($0.03)
                                                                      ----------------------------------
      Adjusted net loss                                                      ($0.71)          ($0.71)
                                                                      ==================================
</TABLE>



In addition, the intangible asset established for non-compete agreements remains
subject to  amortization  in accordance with SFAS 142. The gross carrying amount
related  to  non-compete   agreements   was  $3,229,000   while  the  associated
accumulated amortization balance at September 30, 2001 and December 31, 2001 was
$1,622,000 and $1,737,000,  respectively. The aggregate amortization expense was
$219,000 and  $115,000  for the three  months ended  December 31, 2000 and 2001,
respectively.  Estimated  amortization expense for the next five fiscal years is
approximately  $455,000 in 2002; $415,000 in 2003; $385,000 in 2004; $235,000 in
2005 and $118,000 in 2006.

Prior to March 31,  2002,  the  Company  will  complete a  preliminary  goodwill
impairment test as required. This test will involve the use of estimates related
to the fair market value of the business with which the goodwill is associated.

Any  impairment  loss resulting from the  transitional  impairment  test will be
recorded as a cumulative effect of a change in accounting principle.  Subsequent
impairment  losses will be reflected in operating income (loss) in the statement
of operations.

NOTE 7 - COMPREHENSIVE INCOME

For the  quarters  ended  December  31, 2001 and 2000,  the Company  recorded no
comprehensive income items, other than the net loss.



                                       6


<PAGE>

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

General
-------

Travis  Boats & Motors,  Inc.  ("Travis  Boats" or the  "Company")  is a leading
multi-state  superstore  retailer of recreational  boats,  motors,  trailers and
related marine accessories in the southern United States. As of the date of this
Report on Form 10-Q,  the  Company  operates 36 store  locations  under the name
Travis  Boating  Center  in  Texas,  Arkansas,  Louisiana,  Alabama,  Tennessee,
Mississippi,  Florida,  Georgia and Oklahoma.  Since June 2001,  the Company has
closed  three (3)  store  locations,  of which  two (2)  were the  result of the
Company's  decision not to renew expiring leases.  These closed stores primarily
operated in markets  with  overlapping  geographic  coverages  with other Travis
Boating Center locations.

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

History
-------

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

Since its founding in 1979 as a single  retail store in Austin,  Texas,  we have
grown  both  through  acquisitions  and  the  opening  of new  "start-up"  store
locations. During the 1980s, we expanded into San Antonio, Texas, purchased land
and built a new  store  facility.  After  this,  we  purchased  additional  boat
retailers  that  operated  stores in the Texas  markets of  Midland,  Dallas and
Abilene.  It was  during  this  early  period  of  store  growth  that we  began
developing  the  systems  necessary  to  manage  a  multi-store   operation  and
maximizing our inventory  purchases to obtain  increased volume  discounts.  Our
success  in  operating  numerous  stores  and  maximizing  volume  discounts  on
inventory  purchases  led to the  introduction  of our  own  proprietary  Travis
Edition  packaging  concept and our philosophy of clearly posting price signs on
each of our boats held for sale.  As of the date of this Report on Form 10-Q, we
operate  store  locations in the  following  states:  Texas (8),  Arkansas  (4),
Louisiana  (4),  Alabama (1),  Tennessee  (5),  Mississippi  (1),  Florida (11),
Georgia (1) and Oklahoma (1).

We sell  approximately 75 different types of Travis Edition models of brand-name
fishing,  water-skiing and general recreational boats, such as family ski boats,
off-shore fishing boats,  personal  watercraft,  cabin cruisers and yachts up to
approximately 60 feet in length. We also sell motors, trailers,  accessories and
related  equipment.  Although we sell pleasure  boats at many  different  retail
prices,  we attempt to price our product to maintain a  consistent  gross profit
percentage for each of our Travis Edition models. We study sales trends from the
cities and states where we operate store locations.  We use the information from
this data to custom design and pre-package  combinations  of popular  brand-name
boats, such as Larson, Wellcraft,  Scarab, Bayliner, Trophy, Sea Ark, Fishmaster
and Ranger along with motors,  trailers and numerous accessories,  under our own
proprietary  Travis Edition label. Our boats are generally powered by brand name
motors such as Mercury, Johnson, Suzuki or Volvo. These signature Travis Edition
packages, which account for the vast majority of total new boat sales, have been
designed and developed in coordination  with the manufacturers and often include
distinguishing  features and accessories that have historically been unavailable
to, or listed as optional by, many  competitors.  We also sell  yachts,  such as
Carver  and  Martinique  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.

Results of Operations
---------------------

Quarter  Ended,  December 31, 2001 Compared to the Quarter  Ended,  December 31,
2000

Net sales.  Net sales decreased by 14.2% to  approximately  $20.1 million in the
first  quarter  of fiscal  2001 from  approximately  $24.1  million in the first
quarter of fiscal 2000. The primary components of the decrease in net sales were
attributable  to (i) an approximate  $1.0 million  reduction in sales versus the
prior period due to the closing of two store


                                       7



locations  during  the summer of Fiscal  2001 and (ii) a decline  in  comparable
store sales. Comparable store sales declined by 6.9% (35 stores in base) for the
quarter ended December 31, 2001.  Management believes the decrease in comparable
store sales was related to various factors  including  residual effects of those
issues impacting the marine industry during the Fiscal 2001 year such as erratic
levels of consumer confidence and unemployment, in addition to lingering effects
of the events of September 2001.

Gross profit.  Gross profit decreased to approximately $4.1 million in the first
quarter of fiscal 2001 from  approximately  $5.8  million in the same quarter of
fiscal 2000. Gross profit as a percent of net sales also decreased to 19.7% from
24.0%  during the same  periods.  The  decrease in total gross  profit,  both in
actual  dollars  and as a  percent  of  net  sales,  was  primarily  related  to
reductions  in  gross  profit  earned  by the  Company  on the  sale of  certain
inventory during the period. The Company,  primarily during the month of October
2001,  offered  certain  sales  incentives  in an effort  (i) to reduce  certain
non-current inventory levels and (ii) to stimulate sales following the events of
September 2001. The Company believes that it may continue to experience  erratic
levels of overall gross profit margins during Fiscal 2002 resulting, in part, to
introductions of certain new Travis Edition product lines and continued emphasis
on incentives and marketing promotions to stimulate sales.

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 F & I
Products sold.

Net sales of these products  contributed  approximately  $550,000,  or 13.5%, of
total gross profit in the first  quarter of fiscal 2001, as compared to $659,000
or 11.4%,  of total gross profit for the first quarter of the prior fiscal year.
The increase in net sales of F&I Products, as a percent of net sales, is related
to the Company  selling a higher  percentage of smaller boats during the current
period.  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 reduced sales of
F&I  Products  due  primarily  to  lower  overall  yields  paid by  lenders  for
originating  customer  finance  contracts and  competitive  pressures on finance
rates (which resulted in lower net spreads achieved in the placement of customer
financing).  Decreases  in the  percentage  of customers  buying these  products
(which is referred to as  "sell-through"),  particularly  by  purchasers  of the
larger,  more expensive boats and reduced customer demand for certain  insurance
products have also been limiting factors.

Selling,   general   and   administrative   expenses.   Selling,   general   and
administrative  expenses  decreased  by 12.7% to  approximately  $7.3 million in
first  quarter of fiscal  2001 from  approximately  $8.4  million  for the first
quarter of fiscal  2000.  Alternatively,  selling,  general  and  administrative
expenses as a percent of net sales  increased  to 35.4% in the first  quarter of
fiscal 2001 from 34.8% for the first quarter of fiscal 2000.  The  decrease,  in
actual dollars, was primarily  attributable to the reduction in expenses related
to wages,  travel  and  entertainment,  and  promotion  and  advertising.  These
reductions in expenses were somewhat  offset by increases in insurance  expenses
for both employee benefits and property/casualty coverages.

Depreciation and Amortization Expenses.  Depreciation and amortization expenses,
as a percent of net sales,  increased in the first  quarter of fiscal  2001,  to
3.0% from  2.9% in the same  quarter  of the prior  fiscal  year.  However,  the
increase was offset by the Company's  election to early adopt the  provisions of
SFAS No. 142 effective as of October 1, 2001 (see note 5 to unaudited  financial
statements attached hereto).

Interest  expense.  Interest expense  decreased by 43.7% to  approximately  $1.0
million in the first quarter of fiscal 2001 from  approximately  $1.8 million in
the first quarter of fiscal 2000.  Interest expense,  as a percent of net sales,
decreased to 5.0% from 7.7% in the quarterly periods ended December 31, 2001 and
2000,  respectively.  The decreased interest expense, both in actual dollars and
as a percent of net sales,  was  primarily  the  result of


                                       8

<PAGE>


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 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 decreases in the Company's  variable  borrowing  rates  relative to the
same period of the prior year  resulting  from the  numerous  reductions  in the
prime rate during the 2001 calendar year.

Net loss.  The Company posted a net loss of  approximately  $3.1 million for the
first quarter of fiscal 2001 versus a net loss of approximately  $3.3 million in
the first  quarter of fiscal  2000.  As a percentage  of net sales,  the Company
posted a net loss of 15.0% and 13.5% for the first  quarter  of fiscal  2001 and
2000, respectively.

Liquidity and Capital Resources
-------------------------------

The Company's 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 the Company's
borrowing  agreements.  At December 31, 2001, the Company had working capital of
approximately  $14.5  million,   centered  in  approximately  $74.0  million  in
inventories,    offset   by   approximately    $66.2   million   in   short-term
revolving/floorplan  credit lines outstanding under its borrowing agreements. As
of December 31, 2001,  the aggregate  maximum  borrowing  limit  pursuant to the
borrowing  agreements was $90.0 million,  of which the Company's  eligibility to
borrow  additional sums up to the maximum is pursuant to floor plan advances and
a borrowing base formula.  The Company's  floor plan advances and borrowing base
formula  collectively  allow the Company to borrow against  substantially all of
its  new  and  used  inventory,  as  well as  certain  accounts  receivable,  in
determining its maximum borrowing availability.

Operating  activities  used cash of $11.0  million for the first three months of
fiscal 2001 due  primarily to net increases of $8.8 million in  inventories  and
the reported  seasonal net loss. The first quarter  historically  represents the
"off" or "slow"  selling season for the Company (see  "Seasonality").  Inventory
growth  traditionally  builds  during the first quarter in  preparation  for the
selling season which begins with boat and recreation  shows occurring in January
and  February in certain  market areas in which the Company  conducts  business.
This inventory level generally falls to an annual low point during the Company's
fourth fiscal quarter.

Merchandise inventories were approximately $74.0 million and approximately $65.2
million as of December 31, 2001 and September 30, 2001, respectively.

Financing  activities  for the three months  ended,  December 31, 2001  provided
approximately  $11.3  million of cash flows  primarily  from the net proceeds of
borrowings  under the  Company's  borrowing  agreements  and the proceeds of the
issuance of $4.3 million in Convertible Subordinated Notes. The Company finances
substantially all of its inventory and working capital requirements  pursuant to
borrowing  agreements  with two  commercial  finance  companies --  Transamerica
Distribution  Finance  ("TDF") and  Deutsche  Financial  Services  ("DFS").  The
agreements,  which have maturity  dates of January 2003,  contain  substantially
similar terms and financial ratio based covenant requirements.  Borrowings under
the  agreements are pursuant to floor plan advances and a borrowing base formula
and are used primarily to finance  inventory  purchases and for general  working
capital  requirements.  Substantially  all  inventory,  accounts  receivable and
intangible assets  collateralize  these borrowing  agreements.  The terms of the
borrowing  agreements also provide for: (i) fees for administrative  monitoring,
(ii) fees for unused portions of available credit, and (iii) pre-payment fees in
the event of the Company's termination of such floor plans prior to their stated
maturity  dates  in  January  2003.  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 dividends or repurchases  of the Company's  common
stock are also  substantially  limited  without prior  consent.  Effective as of
December 14, 2001, the Company entered into amended loan agreements.  Concurrent
with execution of the amended loan  agreements,  the Company received waivers on
all financial  covenants that were previously in  non-compliance  with the prior
agreements.  The amended loan agreements  also provide for certain  revisions to
(i) future  financial  ratios and (ii) the maximum  amount which the Company may
borrow from the current amount of $90 million to varying reduced amounts through
July of 2002,  when such maximum amount will be established at $70 million until
the  expiration  of the  borrowing  agreements  in January  of 2003.  Management
believes


                                       9

<PAGE>

that the maximum  available  credit  amounts under its credit lines conform with
the anticipated inventory purchasing plans of the Company during fiscal 2002.

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

The Notes were issued in the  collective  form of a $3.0  million  Note and plus
other  Notes in the  aggregate  amount of $1.3  million.  By letter  dated as of
February 8, 2002,  the Company  issued  notice to the holder of the $3.0 million
Note of the Company's  intent to prepay the Note, plus all accrued  interest and
the required 5% prepayment  fee, on or about June 10, 2002. The Company does not
intend to utilize its current cash  reserves to prepay the $3.0 million Note and
is highly  confident that current  negotiations  with a third party will provide
alternative funding in an amount exceeding the required prepayment prior to June
10, 2002.

Based upon management's Fiscal 2002 operating plan, including the sale/leaseback
or refinancing  of certain  assets,  if necessary,  and  availability  under the
borrowing  agreements,  the Company believes that there is adequate liquidity to
fund the Company's  operations and to make required principal payments under the
two  borrowing   agreements  and  other  outstanding  debt.  However,   material
shortfalls or variances from anticipated  performance  could require the Company
to seek  further  amendment  to the amended  borrowing  agreements  or alternate
sources of financing.

Seasonality
-----------

The Company's business,  as well as the sales demand for various types of boats,
tends to be highly  seasonal.  Strong sales  typically begin in January with the
onset of the public boat and recreation  shows,  and continue through July. Over
the previous three fiscal years,  the average annual net sales for the quarterly
periods  ended  March  31 and  June 30  represented  in  excess  of 26% and 38%,
respectively,  of the Company's annual net sales. With regard to net income, the
Company  historically  generates  profits  in three of its fiscal  quarters  and
experiences  operating  losses in the quarter  ended  December 31 due to a broad
seasonal  slowdown in sales.  During the quarter ended  September 30,  inventory
typically  reaches its lowest levels and  accumulated  cash  reserves  reach the
highest  levels.  During the quarter  ended  December 31, the Company  generally
builds  inventory  levels in preparation  for the upcoming  selling season which
begins with boat and recreation  shows occurring during January through March in
certain  market  areas in which the Company  conducts  business.  Travis  Boats'
operating  results would be materially and adversely  affected if net sales were
to fall  significantly  below  historical  levels  during  the months of January
through June.

The  Company's  business is also  significantly  affected  by weather  patterns.
Weather  conditions that are  unseasonable  or unusual may adversely  affect the
Company's  results of  operations.  For example,  drought  conditions  or merely
reduced  rainfall  levels,  as well as excessive  rain, may affect the Company's
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.

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 that 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:  general  economic   conditions,   competition  and  government
regulations,  as well as the risks and uncertainties discussed in this Report on
Form 10-Q, including without limitation, the matters discussed in "Risk

                                       10

<PAGE>


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,  2001.  All
forward-looking  statements in this Report on Form 10-Q are expressly  qualified
in their entirety by the cautionary statements in this paragraph.

Other Business Matter - Notice of Non-Renewal of Insurance
----------------------------------------------------------

The  Company  received  notice  dated as of  January  14,  2002 (the  "Notice of
Nonrenewal") from the provider of the Company's comprehensive business insurance
coverages  (property,casualty,  liability, workers compensation,  etc.) that the
Company's insurance policy would not be renewed at the current policy expiration
date of March 21,  2002.  The Notice of  Nonrenewal  stated  that the  Company's
"coastal  exposure  does  not  meet  underwriting  guidelines  of the  Insurance
Provider".  The Company is actively seeking replacement coverage,  but there can
be no guarantee that the Company can find  replacement  coverage at a comparable
price or quality.  The Company's  inability to secure replacement  coverage at a
comparable  price or quality  could result in a material  adverse  impact on our
business, operating results and financial condition.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time,  the  Company is involved  in  litigation  relating to claims
arising  from its  normal  business  operations.  Currently,  the  Company  is a
defendant  in  several  lawsuits.  Some of these  lawsuits  involve  claims  for
substantial  amounts.  While the ultimate  outcome of these  lawsuits  cannot be
ascertained,   after  consultation  with  counsel,   the  Company  believes  the
resolution  of these  suits  will  not have a  material  adverse  effect  on the
Company's financial condition or results of operations. However, there can be no
assurance as to the ultimate outcome of these matters.

Item 2.  Changes in Securities

Issuance of Convertible Subordinated Notes
------------------------------------------

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

The Notes were issued in the  collective  form of a $3.0 million Note plus other
Notes in the aggregate amount of $1.3 million. By letter dated as of February 8,
2002,  the Company  issued  notice to the holder of the $3.0 million Note of the
Company's  intent to prepay the Note, plus all accrued interest and the required
5%  prepayment  fee, on or about June 10,  2002.  The Company does not intend to
utilize its current cash  reserves to prepay the $3.0 million Note and is highly
confident that current  negotiations with a third party will provide alternative
funding in an amount exceeding the required prepayment prior to June 10, 2002.

The Notes were issued to  accredited  investors  pursuant to an  exemption  from
registration under Regulation D of the Securities Act of 1933.

Item 3.  Defaults Upon Senior Securities

Not applicable

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

Not applicable

Item 5.  Other Information

Not applicable


                                       11

<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

        (a)    Exhibit                 Description               Incorporated by
               Number                  -----------                 Reference to
               -------                                           ---------------

                None                       --                          --


        (b)    Reports on Form 8-K
               -------------------

               The Company  has not  filed  any  reports  on  Form 8-K  for  the
               quarter ended December 31, 2001.



                                   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: February 19, 2002     Travis Boats & Motors, Inc.


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




                                       12