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, 2003

                                       OR

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

                         Commission File Number 0-20757

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


           TEXAS                                        74-2024798
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                     Identification Number)



               12116 Jekel Circle, Suite 102, Austin, Texas 78727
                    (Address of principal executive offices)
       Registrant's telephone number, including area code: (512) 347-8787


        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 Par Value
                                (Title of class)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.
                                 Yes [ ] No [ X]


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

Common Stock $.01 par value - 4,309,727 shares as of May 14, 2003.



<PAGE>


                                      INDEX


PART I - FINANCIAL INFORMATION


Item 1:  Financial Statements (Unaudited):
                   Condensed Consolidated Balance Sheets:
                   March 31, 2003 and September 30, 2002......................1

                   Condensed Consolidated Statements of Operations:
                   Three and Six Months Ended March 31, 2003 and 2002.........2

                   Unaudited Condensed Consolidated Statements of Cash Flows:
                   Six Months Ended March 31, 2003 and 2002...................3

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

Item 2:  Management's Discussion and Analysis of Financial
                   Conditions and Results of Operations.......................7

Item 3: Quantitative and Qualitative Disclosures About Market Risk...........13


PART II - OTHER INFORMATION

Items 1 - 6..................................................................13

Signatures...................................................................14


                                       i
<PAGE>



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Travis Boats & Motors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data )
<TABLE>
<CAPTION>

                                                                            March 31,       September 30,
                                                                              2003              2002
                                                                          -------------    ---------------
                                                                           (unaudited)
<S>                                                                           <C>                  <C>
ASSETS:
      Current assets:
            Cash and cash equivalents                                           $2,647              $4,253
            Accounts receivable, net                                            11,484               9,681
            Inventories, net                                                    61,611              56,957
            Income Taxes Recoverable/Deferred tax asset                          3,019                 611
            Prepaid expenses and other                                           1,243               1,009
                                                                          -------------    ----------------
              Total current assets                                              80,004              72,511

      Property and equipment:
            Land                                                                 5,982               5,982
            Buildings and improvements                                          15,951              15,899
            Furniture, fixtures and equipment                                    9,391               9,327
                                                                          -------------    ----------------
                                                                                31,324              31,208
            Less accumulated depreciation                                      (10,819)             (9,820)
                                                                          -------------    ----------------
                                                                                20,505              21,388


      Intangibles and other assets:
            Non-compete agreements, net                                            940               1,149
            Other assets                                                           355                 384
                                                                          -------------    ----------------
              Total assets                                                    $101,804             $95,432
                                                                          =============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
            Accounts payable                                                    $5,635              $4,122
            Accrued liabilities                                                  2,395               1,439
            Floor plan and revolving line of
            credit                                                              59,839              50,949
            Current portion of notes payable and other short-term                8,105               1,025
            obligations
            Notes payable in default, classified as short-term                       0               6,436
            obligations
                                                                          -------------    ----------------
              Total current liabilities                                         75,974              63,971

      Notes payable, less current portion                                        3,142               3,225
      Convertible Subordinated Notes                                             1,300               1,300

      Stockholders' equity
            Serial Preferred stock, $100 par value, 1,000,000
                 shares authorized, 80,000 shares outstanding                    8,000               8,000
            Common Stock, $.01 par value, 50,000,000 authorized,
                 4,329,727 and 4,329,727 issued and outstanding at
                 March 31, 2003 and September 30, 2002, respectively                43                  43
            Paid-in capital                                                     15,105              15,109
            Retained earnings                                                   (1,760)              3,784
                                                                          -------------    ----------------
              Total stockholders' equity                                        21,388              26,936

                                                                          -------------    ----------------
              Total liabilities and stockholders' equity                      $101,804             $95,432
                                                                          =============    ================

              See notes to unaudited condensed consolidated financial statements

</TABLE>




<PAGE>



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

<TABLE>
<CAPTION>

                                                    Three Months ended          Six Months ended
                                                          March 31,                  March 31,
                                                    2003         2002           2003        2002
                                                  ----------   ----------     ----------  ----------
<S>                                                <C>          <C>            <C>         <C>
Net sales .....................................    $ 38,132     $ 47,388       $ 56,019    $ 68,054
Cost of goods sold ............................      30,543       36,919         44,913      53,520

Gross profit...................................       7,589       10,469         11,106      14,534

Selling, general and administrative............       8,497        9,010         15,833      16,325
Financing and board restructure expenses ......         --           --             145         --
Depreciation and amortization..................         608          616          1,265       1,242
                                                  ----------   ----------     ----------   ---------

                                                      9,105        9,626         17,243      17,567

Operating income/(loss)........................      (1,516)         843         (6,137)     (3,033)
Interest expense...............................        (931)      (1,116)        (1,743)     (2,154)
Other income...................................          22           20             43          37

Loss before income tax benefit and
   cumulative effect of accounting change......      (2,425)        (253)        (7,837)     (5,150)
Income tax benefit.............................         704           93          2,533       1,887
                                                  ----------   ----------     ----------   ---------

Net loss before cumulative effect of accounting
   change .....................................      (1,721)        (160)        (5,304)     (3,263)
Cumulative effect of accounting change, net
   of taxes of $2,281 .........................         --           --             --       (6,528)
                                                  ----------   ----------     ----------   ---------
Net loss ......................................     $(1,721)    $   (160)      $ (5,304)   $ (9,791)

Preferred Stock Dividends .....................         120          --             240         --

                                                  ----------   ----------      ---------   ---------
Net loss attributable to common shareholders ..     $(1,841)        (160)        (5,544)     (9,791)
                                                  ==========   ==========      =========   =========

Loss per share:
   Basic and diluted loss per share before
   dividends and cumulative effect of
   accounting change, net .....................       (0.40)       (0.04)         (1.22)      (0.75)
   Preferred stock dividends...................       (0.03)         --           (0.06)        --
   Cumulative effect of accounting change, net.         --           --             --        (1.50)
                                                  ----------   ----------     ----------   ---------
Basic and diluted loss per share ..............     $ (0.43)     $ (0.04)       $ (1.28)    $ (2.25)
                                                  ==========   ==========     ==========   =========

Weighted average Basic and
   Dilutive common shares outstanding .........   4,329,727    4,348,416      4,329,727   4,351,785


Stores open at end of period ..................       34          35              34          35

</TABLE>

                                       2
<PAGE>



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

<TABLE>
<CAPTION>
                                                                                            Six months ended
                                                                                               March 31,

                                                                                       2003                2002
                                                                                   ----------------------------------
<S>                                                                                     <C>                 <C>

Operating activities:
Net Loss                                                                                ($5,304)            ($9,791)
Adjustments to reconcile net loss to net cash used in
  Operating activities:
      Depreciation .........................................................                999               1,012
      Amortization .........................................................                215                 230
      Cumulative effect of accounting change, net ..........................                  0               6,528
      Changes in operating assets and liabilities
           Accounts receivable .............................................             (1,803)             (5,529)
           Prepaid expenses ................................................               (235)               (806)
           Inventories .....................................................             (4,654)            (10,251)
           Other assets ....................................................                 28                  10
           Accounts payable ................................................              1,513                  53
           Accrued liabilities .............................................                956                 150
           Income tax recoverable ..........................................             (2,408)             (1,540)

                                                                                   --------------     ---------------
      Net Cash used in operating activities ................................            (10,693)            (19,934)

      Investing Activities:
      Purchase of property and equipment ...................................               (124)               (320)

                                                                                   --------------     ---------------
      Net cash used in investing activities ................................               (124)               (320)

      Financing activities:

      Proceeds from issuance of convertible subordinated notes .............                  0               4,300
      Net increase in notes payable and other short term obligations .......              9,451              16,290
      Net proceeds from issuance of Series A preferred stock ...............                  0               2,139
      Preferred stock dividends ............................................               (240)                  0
      Net proceeds (payments) from issuance
         (repurchase) of common stock ......................................                  0                 (18)

                                                                                   --------------     ---------------
      Net cash provided by financing activities ............................              9,211              22,711
      Change in cash and cash equivalents ..................................             (1,606)              2,457
      Cash and cash equivalents, beginning of period .......................              4,253               1,388

                                                                                   --------------     ---------------
      Cash and cash equivalents, end of period .............................          $   2,647             $ 3,845
                                                                                   ==============     ===============

       See notes to unaudited condensed consolidated financial statements

</TABLE>

                                       3

<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared  from the  records  of Travis  Boats & Motors,  Inc.  and  subsidiaries
(collectively,  the Company)  without audit. In the opinion of management,  such
financial  statements  include all  adjustments  (consisting  of only  recurring
accruals)  necessary to present fairly the financial position at March 31, 2003;
and the interim results of operations and cash flows for the three and six month
periods ended March 31, 2003 and 2002. The condensed  consolidated balance sheet
at September  30, 2002,  presented  herein,  has been  prepared from the audited
consolidated financial statements of the Company for the fiscal year then ended.

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

The results of  operations  for the three and six month  period  ended March 31,
2003 are not  necessarily  indicative of the results to be expected for the full
fiscal year.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

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

NOTE 3 - BASIC/DILUTED OUTSTANDING SHARE CALCULATION

Financial  Accounting Standards Board Statement No. 128 requires the calculation
of earnings per share to exclude common stock  equivalents when the inclusion of
such would be anti-dilutive.  In the three and six month periods ended March 31,
2003 and  2002,  the  inclusion  of common  stock  equivalents  would  have been
anti-dilutive based upon the net loss posted by the Company. As such, all common
stock equivalents were excluded.

Effective  as of  January  7, 2003 the  Company  cancelled  237,198  outstanding
incentive stock options with a weighted average remaining life of 5.37 years and
a weighted  average strike price of $4.78 per share. The incentive stock options
were previously held by executive  management and one independent  board member.
The  cancellation  of the incentive stock options was a requirement of the terms
for a $1.5 million short term financing  agreement  entered into effective as of
December 2002.

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


                                       4

<PAGE>

The Company also has excluded  the  inclusion of 528,584  shares of common stock
subject  to  issuance  pursuant  to  $1.3  million  in  outstanding  convertible
subordinated  notes and  3,252,826  shares of common  stock  subject to issuance
pursuant  to  80,000  shares  of  Series A  Preferred  Stock.  For the three and
six-month  period ended March 31, 2003,  the conversion  price of  approximately
$2.46 per share of both issuances  exceeds the Company's average market price of
its common stock.

NOTE 4 - STOCKHOLDERS' EQUITY

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


Repurchases of shares of common stock during the six months ended March 31, 2003
and 2002 consisted of the following:


                                           6 mos ended            6 mos ended
                                           March 31, 2003         March 31, 2002
                                           -------------------------------------
     Shares Repurchased (000's)              --                   12
     Total Purchase Price (000's)            --                   $25.9
     Average Price per Share                 --                   $2.16


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>
                                    Net Loss

<CAPTION>
                                                      Three Months Ended March 31,       Six Months Ended March 31,
                                                          2003             2002             2003            2002
<S>                                                          <C>                <C>           <C>             <C>

Reported net loss                                            (1,841)            (160)         (5,544)         (9,791)
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                   (35)             (80)             (93)           (159)
expense determined under the fair value method
for all awards, net of related tax effects
                                                    ----------------- ---------------- --------------- ---------------
Pro forma net loss                                           (1,876)           (240)          (5,637)         (9,950)

                   Reported Basic and Diluted Loss per Share

Reported Basic and Diluted net loss per share                 (0.43)           (0.04)          (1.28)          (2.25)
Pro forma Basic and Diluted net loss per share                (0.43)           (0.06)          (1.30)          (2.29)


</TABLE>


                                       5

<PAGE>

NOTE 5 - CONVERTIBLE SUBORDINATED NOTES

The Company has outstanding  Convertible  Subordinated Notes (the "Notes") in an
aggregate amount of $1.3 million  originally  issued in December 2001. The Notes
are unsecured with a term of 36 months and accrue interest at 10.75%, fixed. The
principal and interest amounts payable  pursuant to the Notes are  subordinated,
in substantially all respects,  to the Company's  borrowing  agreements with the
commercial finance companies  providing  inventory and working capital financing
for the Company.  The Notes are  redeemable by the Company,  and if not redeemed
the  principal  amount of the Notes may be  converted  by the  holders  into the
Company's common stock at a conversion price of approximately $2.46 per share.

NOTE 6 - SERIES A PREFERRED STOCK

The  Company  has issued  80,000  shares of 6% Series A  Cumulative  Convertible
Preferred  Stock (the  "Preferred  Stock")  pursuant to an agreement  with TMRC,
L.L.P.  ("Tracker"),  a wholly-owned  subsidiary of Tracker Marine,  L.L.C.  The
issue  price of the  Preferred  Stock  is $100  per  share.  Each  share  may be
converted into the Company's common stock at a conversion price of approximately
$2.46 per share.  The Preferred Stock is governed by a  comprehensive  agreement
that provides,  among other components,  the right to name certain directors and
re-pricing  options in the event of the issuance of other equity  securities  or
debt with more favorable conversion prices or terms.

NOTE 7 - SHORT TERM BORROWINGS

The Company  finances  substantially  all of its inventory  and working  capital
requirements  pursuant to inventory borrowing agreements entered into in January
2000 with two commercial  finance  companies.  The agreements,  which matured on
April 30, 2003 (see Management's Discussion and Analysis - "Liquidity"), contain
substantially similar terms and financial ratio based covenant requirements. The
maximum aggregate  borrowing  availability as of March 31, 2003 was limited to a
maximum  credit  limit of  approximately  $70 million at various  prime based or
LIBOR based  interest  rates  (varying  from 4.75% to 4.82% at March 31,  2003).
Borrowings  under the agreements  are pursuant to a borrowing  base, or specific
floor  plan,  advancing  formula  and are used  primarily  to finance  inventory
purchases  and for  general  working  capital  requirements.  Substantially  all
inventory,  accounts receivable,  furniture,  fixtures, equipment and intangible
assets   collateralize  these  agreements.   Pursuant  to  certain  waivers  and
restructuring of covenants under these inventory borrowing agreements during the
2002 fiscal  year,  the Company  also  granted  junior  liens on its real estate
holdings as collateral.

The Company  also has  approximately  $6.4  million in real estate  loans with a
single lender which have been  re-classified as current.  The Company and Lender
entered into revised loan agreement  effective March 20, 2003 and the Company is
in compliance with the revised agreement. Terms of the revised agreement require
the  Company to repay each loan on or prior to  specific  dates prior to October
30, 2003. (See Management's Discussion and Analysis - "Liquidity.").

NOTE 8 - GOODWILL

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

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

NOTE 9 - COMPREHENSIVE INCOME/LOSS

For the three and six months ended March 31, 2003 and 2002, the Company recorded
no comprehensive income or loss items, other than the net income or net loss.

NOTE 10 - CONTINGENCIES

From time to time,  our  Company is involved  in  litigation  relating to claims
arising  from its  normal  business  operations.  Currently,  our  Company  is a
defendant  in  several  lawsuits.  Some of these  lawsuits  involve  claims  for
substantial amounts.

In January  2003,  the Company  received  notice of a lawsuit  filed in the U.S.
Bankruptcy  Court  for the  Northern  District  of  Illinois  on  behalf  of the
bankruptcy  estate for  Outboard  Marine  Corporation  ("OMC").  The Company has
denied the  allegations in this lawsuit and finds them without merit.  OMC was a
primary supplier of outboard engines to our Company prior to OMC's bankruptcy in
December of 2000.  The suit alleges that we received  approximately  $700,000 in
cash payments from OMC that were are deemed to be  preferential  payments  under
applicable  bankruptcy law, and hence demands the repayment thereof. The Company
believes  that the  lawsuit is  without  merit and that the cash  payments  were
received in the ordinary course of business  pursuant to the Company's  contract
with OMC.

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


                                       6

<PAGE>

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

     Some  of  the   information   in  this   Report  on  Form   10-Q   contains
forward-looking statements that involve substantial risks and uncertainties. You
can identify these statements by  forward-looking  words such as "may",  "will",
"expect", "anticipate",  "believe", "estimate", and "continue" or similar words.
You should read statements  that contain these words carefully  because they (1)
discuss our future  expectations;  (2) contain projections of our future results
of  operations  or of  our  future  financial  condition;  or  (3)  state  other
"forward-looking"  information.  We believe it is important to  communicate  our
expectations to people that may be interested.  However,  unexpected  events may
arise in the future that we are not able to predict or control.  The information
that we describe in this section,  as well as any other  cautionary  language in
this Report on Form 10-Q, give examples of the types of  uncertainties  that may
cause our actual  performance  to differ  materially  from the  expectations  we
describe in our  forward-looking  statements and therefore  result in a material
adverse effect on our business, operating results and financial condition. For a
more  comprehensive  discussion  of these and the  numerous  other Risk  Factors
affecting  our business and  operations  see the  Company's  Report on Form 10-K
filed for the fiscal year ended  September 30, 2002 and other documents filed of
record with the Securities and Exchange Commission.

     We Must Comply with Listing  Requirements  for the NASDAQ Stock market.  We
transferred  our common  stock to the Nasdaq  Small Cap Market  effective  as of
October 25, 2002. We requested  the transfer  because our Company did not comply
with all of the  requirements  for  trading on the Nasdaq  National  Market.  By
letter  dated as of February  14,  2003 we were  notified by the NASDAQ that the
closing  price for our common stock for the 30 days prior  thereto was below the
minimum  $1.00 bid price  required by the Nasdaq  Small Cap  Market.  The NASDAQ
notified the Company that it can regain compliance if the Company's common stock
closes at $1.00 per share or more for a minimum of 10  consecutive  trading days
prior  to  August  13,  2003.   Otherwise,   the  NASDAQ  will  provide  written
notification  that the Company's  common stock will be delisted;  subject to the
Company's right to appeal the determination. Our continued inability to maintain
the required share price range or other  requirements  for trading on the Nasdaq
Small Cap  Market  could  result in our  common  stock  being  delisted  and not
eligible  for trading on the Nasdaq  Stock  Market.  Since we rely on the Nasdaq
Stock Market to offer trading of our common stock,  our inability to continue on
the Nasdaq Stock Market could have a material  adverse  effect on our  business,
financial condition,  the price of our common stock and the ability of investors
to purchase or sell our common stock.

     General - Travis Boats & Motors,  Inc.  ("Travis  Boats",  the "Company" or
"we") is a  leading  multi-state  superstore  retailer  of  recreational  boats,
motors,  trailers and related marine  accessories in the southern United States.
Our Company,  operated 34 stores on March 31, 2003 under the name Travis Boating
Center in Texas (8),  Arkansas (3),  Louisiana (4), Alabama (1),  Tennessee (5),
Mississippi (1), Florida (10), Georgia (1) and Oklahoma (1). Subsequent to March
31, 2003, the Company closed the store locations in Knoxville and Lake Pickwick,
Tennessee.  The assets of the two locations were  consolidated into other Travis
Boats locations in proximity to the closed stores.

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

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

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


                                       7

<PAGE>

     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,  Fisher,  ProCraft,  Fishmaster,  Ranger and  Starcraft  with
outboard motors generally manufactured by Suzuki or Brunswick Corporation, along
with trailers and numerous accessories, under our own proprietary Travis Edition
label.  These  signature  Travis  Edition  packages,  which account for the vast
majority  of our total new boat  sales,  have been  designed  and  developed  in
coordination with the manufacturers  and often include  distinguishing  features
and  accessories  that  have  historically  been  unavailable  to,  or listed as
optional,  by many of our  competitors.  We also sell  yachts,  such as  Carver,
Crownline 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.

     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 yachts can have
prices  above  $500,000.   While  most  of  our  sales  have  historically  been
concentrated  on boats with retail  sales  prices  from  $7,500 to  $75,000,  we
believe  that as the Company  continues  to operate in Florida and enters  other
markets along the Gulf of Mexico or other new coastal areas,  that the number of
off-shore fishing boats,  cabin cruisers and yachts will continue to increase as
a  percentage  of our net  sales.  Our  management  believes  that by  combining
flexible  financing  arrangements  with many types of boats  having  broad price
ranges,  that we are able to offer boat  packages to  customers  with  different
purchasing budgets and varying income levels.

Critical Accounting Policies

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

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

Revenue Recognition

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

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

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

Allowance for Doubtful Accounts

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

Inventory Valuation

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

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

Income Taxes

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

Results of Operations

Quarter Ended,  March 31, 2003 Compared to the Quarter Ended, March 31, 2002 and
Six Months Ended,  March 31, 2003  Compared to the Six Months  Ended,  March 31,
2002.

Net sales.  Net sales in the second  quarter of fiscal 2003  decreased  to $38.1
million,  compared to net sales of $47.4 for the second  quarter of fiscal 2002.
For the six months ended,  March 31, 2003, net sales decreased to $56.0 million,
compared to $68.1 million during the same period of the prior fiscal year.

Comparable  store sales decreased by 18.7% and 15.7% (34 stores in base) for the
quarter and six months ended March 31, 2003.  The  decreases in net sales during
the quarter and six months  ended March 31, 2003  resulted  from the decrease in
comparable store sales,  reduced sales as a result of the impact of fewer stores
(34 versus 35) in operation and a decline in average  retail prices based on our
aggressive sell-through of non-current inventory.  Our strategy is to accelerate
the sale of certain aged and discontinued product to improve inventory turns and
to  reduce  the  days  on  hand  of  inventory.  Management  believes  that  the
sell-through of additional inventory will have a negative impact on retail sales
prices and impact gross profit margins (in a range  consistent  with the quarter
ended March 31, 2003) through the  remainder of the Company's  2003 fiscal year;
but offset by an  improvement  in working  capital from its inventory  borrowing
base loan requirements.  Management believes additional factors  contributing to
the decline in net sales and the decrease in comparable store sales include, but
were not  limited  to,  prolonged  erratic  levels of  consumer  confidence  and
employment  uncertainty,  combined  with  persistent  weak economic and industry
conditions.

Gross profit.  Gross profit decreased by 27.6% to approximately  $7.6 million in
the second  quarter of fiscal  2003 from  $10.5  million in the same  quarter of
fiscal 2002.  Gross profit,  as a percent of net sales,  decreased to 19.9% from
22.1% during the same periods.  For the six months ended,  March 31, 2003, gross
profit decreased 23.6% to $11.1 million from $14.5 million in the same period of
the prior year.  Gross  profit,  as a percent of sales,  decreased to 19.8% from
21.4% during the same period.

     The  decrease in total  gross  profit was  primarily  related to the issues
discussed  above in Net Sales.  We believe  that we may  continue to  experience
erratic  levels of overall gross profit margins during the remainder of the 2003
fiscal  year  resulting,   in  part,  to  (i)  the  aggressive  sell-through  of
non-current   inventory  and  (ii)  a  continued  weak  and  uncertain  economic
environment.


                                       8

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

     Net sales of these  products  contributed  approximately  $1.3 million,  or
17.6%, and $1.7 million,  or 15.6% of total gross profit for the quarter and six
months  ended March 31,  2003,  as compared to $1.4  million or 13.0%,  and $1.9
million or 13.2% of total gross  profit for the same periods of the prior fiscal
year.  Net sales  attributable  to F&I  Products  are  reported  on a net basis,
therefore,  all of such sales contribute directly to the Company's gross profit.
The costs  associated  with the sale of F&I  Products  are  included in selling,
general and administrative expenses.  Management attributes the reduced sales of
F&I Products  primarily to the  reduction in overall net sales and 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 to $8.5 million in second  quarter of fiscal
2003 from $9.0 million for the second  quarter of fiscal  2002.  As a percent of
net sales,  selling,  general and administrative  expenses increased to 22.3% in
the second  quarter of fiscal  2003 from 19.0% for the second  quarter of fiscal
2002.  For  the  six  months  ended  March  31,  2003,   selling,   general  and
administrative  expenses  were $16.0  million,  or 28.5% as a percentage  of net
sales,  versus $16.3 million,  or 24.0% as a percentage of net sales in the same
period of the prior fiscal year

     The decrease in selling,  general and  administrative  expenses,  in actual
dollars,  for the  quarter  and six months  ended March 31, 2003 versus the same
periods  of the  prior  year was  primarily  attributable  to  improved  expense
controls; operating fewer stores and a significant reduction in labor costs as a
result of headcount  reductions  and the  reduction in sales.  The  reduction in
expenses have been somewhat offset by increases in certain  expenses,  primarily
insurance expense and promotion and advertising  expenses.  The Company has also
experienced   significant   increases   in   premiums   related   to  both   its
property/casualty and its employee health insurance coverages.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
decreased to $608,000 in the second quarter of fiscal 2003 from $616,000 for the
second quarter of fiscal 2002.  Depreciation  and  amortization  expenses,  as a
percentage of net sales, were 1.6% and 1.3% for the quarter ended March 31, 2003
and 2002, respectively.

Interest  expense.  Interest expense decreased to $931,000 in the second quarter
of fiscal 2003 from $1.1 million in the second quarter of fiscal 2002.  Interest
expense was approximately 2.4% of net sales in the each period.

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

Net loss. The Company, prior to preferred stock dividends of $120,000,  reported
a net loss, of $1.7 million  ($.40 per basic and diluted  share) for the quarter
ended March 31, 2003,  versus a net loss of $160,000 in the quarter  ended March
31, 2002.

     The Company, prior to preferred stock dividends of $240,000, reported a net
loss  attributable  to common  shareholders of $5.3 million ($1.22 per basic and
diluted share) for the six months ended March 31, 2003.  The Company  reported a
net loss of $3.3 million ($.75 per basic and diluted share), prior to the impact
of  cumulative  accounting  change  for the six  months  ended  March 31,  2002.
Inclusive  of the impact of the  cumulative  effect of  accounting  change,  the
Company reported a net loss, of $9.8 million ($2.25 per basic and diluted share)
for the six month period ended March 31, 2002.


                                       9

<PAGE>

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

Liquidity and Capital Resources

     Our  short-term  cash needs are  primarily  for working  capital to support
operations,  including inventory  requirements,  off-season  liquidity and store
infrastructure. These short-term cash needs have historically been financed with
cash from operations and further supplemented by borrowings under our floor plan
and revolving credit lines (collectively the "borrowing agreements").

     On March 31, 2003, we had approximately $2.6 million in cash, $11.5 million
in accounts receivable (primarily contracts in transit from sales,  manufacturer
rebates  receivable and other amounts due from  manufacturers) and $61.6 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  $8.0  million of accounts
payable and accrued  liabilities,  $59.8 million outstanding under our borrowing
agreements and approximately $8.1 million in short-term  indebtedness  including
(i) current  maturities of notes  payable and short term loans of  approximately
$1.7  million;  and (ii) six  real  estate  loans  with a single  lender  in the
aggregate amount of approximately $6.4 million.

     The six real  estate  loans  mature in the  following  amounts  and  dates:
$100,000 - May 31,  2003;  $490,000 - June 30,  2003;  $263,000 - July 31, 2003;
$469,000 - August 31,  2003;  $935,000 - September  30, 2003 and  $4,109,000  on
October  31,  2003.  The  Company  is  negotiating  a  potential   refinance  or
sale/leaseback process on the properties. Management believes that the favorable
loan amount of  approximately  $6.4 million  versus the appraised  amount on the
properties of  approximately  $12.0 million will enable the Company to refinance
the loans within the applicable maturity dates.

     As of March 31,  2003,  the  aggregate  maximum  borrowing  limit under our
borrowing agreements is approximately $70.0 million.

     On March 31, 2003, we had working  capital of  approximately  $4.0 million.
Working  capital,  as of that date, was negatively  impacted by our net loss and
the aforementioned $8.1 million in short term indebtedness.

     For the six months ended March 31,  2003,  operating  activities  used cash
flows of $10.7 million due primarily to the  pre-season  and boat shows increase
of $4.6 million in inventories and the increase of the income taxes  recoverable
due to the net loss  related to the 2002  calendar  year tax return.  Cash flows
were also impacted by an increase in accounts receivable of $1.8 million related
to the increase in net sales  occurring  during the March quarter as a result of
the beginning of the boating season.

     For the six months ended March 31, 2003, investing activities utilized cash
flows of $124,000.  These activities were primarily funded through our borrowing
agreements and internal cash flows.

     For the six months ended March 31, 2003, financing activities provided cash
flows of $9.2 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.  We finance  substantially  all of our  inventory and working
capital  requirements  pursuant to borrowing  agreements entered into in January
2000 with two commercial  finance companies -- Transamerica  Commercial  Finance
Corporation  ("TCFC") and GE Commercial  Distribution Finance Corporation ("GE")
(formerly  known  as  Deutsche  Financial  Services  Corporation  ("DFS")).  The
agreements,  which matured on April 2003, have been amended  numerous times. The
agreements  contain  substantially  similar  terms  and  financial  ratio  based
covenant requirements.  The maximum aggregate borrowing availability as of March
31, 2003 was limited to a maximum  credit limit of $70 million at various  prime
based or LIBOR based interest rates (varying from 4.75% to 8.75% at December 31,
2002).  Borrowings  under the  agreements  are pursuant to a borrowing  base, or
specific  floor  plan,  advancing  formula  and are used  primarily  to  finance
inventory purchases and for general working capital requirements.  Substantially
all inventory, accounts receivable,  furniture, fixtures, equipment, real estate
(junior liens) and intangible assets  collateralize these borrowing  agreements.
The  terms  of  the  borrowing   agreements  also  provide  for:  (i)  fees  for
administrative  monitoring,  (ii) fees for unused portions of available  credit,
and (iii)  pre-payment  fees in the event of our termination of such floor plans
prior to their stated  original  maturity dates.  The borrowing  agreements also
include  restrictive  loan  agreements  containing  various loan  covenants  and
borrowing restrictions, including minimum financial ratios (governing net worth,
current assets,  debt to worth  percentages and cash flow coverage  requirements
based upon  interest  expense and monthly  principal  and  interest  payments on
debts).  Acquisitions,  the payment of common stock  dividends or repurchases of
our common stock are also substantially limited without prior consent.


                                       10

<PAGE>

     Effective  on December  30th and 31st,  2002,  we entered  into Amended and
Restated  borrowing  agreements  (the  "Amended  Agreements")  with  our  senior
inventory lenders, TCFC and GE, (formerly "DFS").

     The Amended  Agreements  included,  but were not limited to, the  following
components:

1.   Extension of the maturity date of the respective  borrowing agreements from
     January 31, 2003 to April 30, 2003.
2.   Waiver of certain financial,  reporting and payment defaults as of the date
     of the Amended Agreements.
3.   An  "Intercreditor  Agreement" by and among TCFC, GE and TMRC,  L.L.P. (the
     owner of the  Company's  outstanding  shares of Series A Preferred  Stock),
     provides  the  Company up to an  additional  $500,000  from each  lender of
     conditional working capital financing (collectively $1.5 million).

     The $1.5 million  short term loan was  repayable on the earlier of the date
     the Company  received its federal  income tax refund for the calendar  2002
     year,  or (ii) April 30, 2003.  As of the date of this Report on Form 10-Q,
     the  Company  has  received  a federal  income  tax refund in the amount of
     approximately $3.0 million and has repaid the $1.5 million loan in full.

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

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


                                       11
<PAGE>

Contractual Commitments and Commercial Commitments

     The  following  table  sets  forth a summary  of our  material  contractual
obligations and commercial commitments as of March 31, 2003:

<TABLE>
<CAPTION>

Year Ended September 30,                Line of      Long-Term     Convertible    Operating      Total
(000's)                                 Credit          Debt          Notes        Leases
------------------------------------ -------------- ------------- -------------- ------------ ------------
<S>                                  <C>             <C>           <C>           <C>           <C>

2003                                 $  59,839 (1)   $  8,106 (2)                $  2,259      $ 70,204
2004                                                    1,247                       2,353         3,600
2005                                                      301      $  1,300         1,663         3,264
2006                                                      227                       1,232         1,459
2007                                                      482                         343           825
Thereafter                                                884                         277         1,161

                                     -------------- ------------- -------------- ------------ ------------
Total                                $  59,839       $ 11,247      $  1,300      $  8,127     $  80,513
                                     ============== ============= ============== ============ ============

     (1)  Our inventory borrowing agreements,  which originated in January 2000,
          matured in April 2003.

     (2)  Approximately  $6.4 million of real estate loans with a single  lender
          maturing  on dates  prior  to  October  31,  2003.  (See  Management's
          Discussion and Analysis - "Liquidity").

</TABLE>


Seasonality

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

     Our business is also  significantly  affected by weather patterns.  Weather
conditions that are  unseasonable or unusual may adversely affect our results of
operations.  For example,  drought conditions or merely reduced rainfall levels,
as well as excessive  rain, may affect our sale of boating  packages and related
products and accessories.

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

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

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

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<PAGE>

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

At March 31, 2003, a hypothetical  100 basis point increase in interest rates on
the Company's Floor Plan and Revolving Line of Credit  obligations  would result
in an  increase of  approximately  $598,000  in annual  pre-tax  expenses of the
Company. The estimated increase in expenses is based upon the increased interest
expense of the Company's  variable rate Floor Plan and Revolving  Line of Credit
obligations  and assumes no change in the volume or  composition of such debt at
March 31, 2003.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time,  our  Company is involved  in  litigation  relating to claims
arising  from its  normal  business  operations.  Currently,  our  Company  is a
defendant  in  several  lawsuits.  Some of these  lawsuits  involve  claims  for
substantial amounts.

     In January 2003, the Company received notice of a lawsuit filed in the U.S.
Bankruptcy  Court  for the  Northern  District  of  Illinois  on  behalf  of the
bankruptcy  estate for  Outboard  Marine  Corporation  ("OMC").  The Company has
denied the  allegations in this lawsuit and finds them without merit.  OMC was a
primary supplier of outboard engines to our Company prior to OMC's bankruptcy in
December of 2000.  The suit alleges that we received  approximately  $700,000 in
cash payments from OMC that were are deemed to be  preferential  payments  under
applicable  bankruptcy law, and hence demands the repayment thereof. The Company
believes  that the  lawsuit is  without  merit and that the cash  payments  were
received in the ordinary course of business  pursuant to the Company's  contract
with OMC.

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


Item 2.  Changes in Securities

None

Item 3.  Defaults Upon Senior Securities

None

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

Not applicable

Item 5.  Other Information

Not applicable

Item 6.  Exhibits and Reports on Form 8-K

<TABLE>
<CAPTION>

(a)    Exhibit Number                            Description             Incorporated by Reference to:
<S>            <C>                      <C>                                     <C>
               10.93                    Forbearance Agreement                   Not applicable.

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

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

</TABLE>

(b)    Reports on Form 8-K

       None.

                                       13
<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 15, 2003                   Travis Boats & Motors, Inc.


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


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