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, 1999

                                       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 - 4,412,027 shares as of February 10, 2000.

<PAGE>

Item 1. Financial Statements

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

<TABLE>
<CAPTION>
<S>                                                                           <C>               <C>
                                                                            December 31,    September 30,
                                                                              1999              1999
                                                                          -------------    ----------------
                                                                          (unaudited)
ASSETS:
      Current assets:
            Cash and cash equivalents                                           $5,252              $4,125
            Accounts receivable, net                                             9,327              12,421
            Inventories, net                                                   103,903              75,700
            Deferred tax asset                                                     136                 136
            Prepaid federal income taxes                                             0                   0
            Prepaid expenses and other                                           1,039               1,177
                                                                          -------------    ----------------
              Total current assets                                             119,657              93,559

      Property and equipment:
            Land                                                                 5,819               5,819
            Buildings and improvements                                          11,748              11,069
            Furniture, fixtures and equipment                                    8,419               8,056
                                                                          -------------    ----------------
                                                                                25,986              24,944
            Less accumulated depreciation                                      (5,074)             (4,529)
                                                                          -------------    ----------------
                                                                                20,912              20,415

      Deferred tax asset                                                           121                 121

      Intangibles and other assets :
            Goodwill and non-compete agreements, net                            11,435              11,637
            Other assets                                                           436                 199
                                                                          -------------    ----------------
              Total assets                                                    $152,561            $125,931
                                                                          =============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
            Accounts payable                                                    $3,539              $3,613
            Accrued liabilities                                                  2,601               3,179
            Amounts due for purchase of business                                 1,004               2,134
            Income taxes payable                                                 1,015               2,820
            Unearned revenue                                                       934                 149
            Floor plan and revolving line of                                    94,042              68,558
            credit
            Current portion of notes payable and other short-term                3,655                 989
            obligations
                                                                          -------------    ----------------
              Total current liabilities                                        106,790              81,442

      Notes payable, less current portion                                        9,401               6,897

      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,
                 4,412,027 and 4,326,022 issued and outstanding at
                 December 31, 1999 and September 30, 1999, respectively             44                  43
            Paid-in capital                                                     15,501              13,816
            Retained earnings                                                   20,825              23,147
                                                                          -------------    ----------------
              Total stockholders' equity                                        36,370              37,592

                                                                          -------------    ----------------
              Total liabilities and stockholders' equity                      $152,561            $125,931
                                                                          =============    ================

              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>
<S>                                                               <C>                <C>
                                                                       Three months ended
                                                                          December 31,


                                                                    1999              1998
                                                                -------------------------------

Net Sales                                                            $23,627           $12,097
Cost of goods sold                                                    17,646             9,156
                                                                -------------     -------------

Gross profit                                                           5,974             2,941

Selling, general and administrative                                    7,651             4,505
Depreciation and  amortization                                           624               415
                                                                -------------     -------------
                                                                       8,275             4,920

Operating loss                                                       (2,301)           (1,979)
Interest expense                                                     (1,374)             (555)
Other income                                                               9                 8
                                                               -------------     -------------
Loss before income taxes                                             (3,666)           (2,526)
Income tax benefit                                                   (1,344)             (926)
                                                                -------------     -------------

Net Loss                                                            ($2,322)          ($1,600)
                                                                =============     =============

Basic and Diluted Loss Per Shares                                    ($0.53)           ($0.37)

Weighted avg. basic and dilutive common shares outstanding.        4,376,503         4,285,579

Stores open at end of period                                              38                24
                                                                =============     =============

</TABLE>

             See notes to unaudited condensed consolidated financial statements

<PAGE>

Travis Boats & Motors, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flow

(in thousands)

<TABLE>
<CAPTION>
<S>                                                                                   <C>                  <C>

                                                                                           Three months ended
                                                                                              December 31,

                                                                                       1999                1998
                                                                                   ----------------------------------

Operating activities:
Net Loss                                                                                ($2,322)            ($1,600)
Adjustments to reconcile net loss to net cash used in
  Operating activities:
      Depreciation                                                                           412                 290
      Amortization                                                                           212                 125
      Changes in operating assets and liabilities
           Accounts receivable                                                             3,094               (338)
           Prepaid expenses                                                                  138                  69
           Inventories                                                                  (28,203)            (17,620)
           Other assets                                                                    (237)                (68)
           Accounts payable                                                                 (74)               (355)
           Accrued liabilities                                                             (578)             (1,048)
           Income tax benefit                                                            (1,805)               (831)
           Unearned revenue                                                                  785               (138)
                                                                                  --------------     ---------------
      Net Cash used in operating activities                                             (28,578)            (21,514)

      Investing Activities:
      Purchase of businesses                                                                (30)             (2,185)
      Purchase of property and equipment                                                   (919)               (341)
                                                                                   --------------     ---------------
      Net cash used in investing activities                                                (949)             (2,526)

      Financing activities:
      Net increase in notes payable and other short term obligations                      30,654              22,353
      Sale of common stock                                                                     0                  24

                                                                                   --------------     ---------------
      Net cash provided by financing activities                                           30,654              22,377
      Change in cash and cash equivalents                                                  1,127             (1,663)
      Cash and cash equivalents, beginning of period                                       4,125               4,618

                                                                                   --------------     ---------------
      Cash and cash equivalents, end of period                                            $5,252              $2,955
                                                                                   ==============     ===============

                See notes to unaudited condensed consolidated financial statements

</TABLE>


<PAGE>

                                DECEMBER 31, 1999

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,
1999;  and the interim  results of operations and cash flows for the three month
periods ended  December 31, 1999 and 1998.  The condensed  consolidated  balance
sheet at September  30,  1999,  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 1 to the
audited  consolidated  financial  statements for the fiscal year ended September
30, 1999.  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, 1999 included in the Company's annual Report on Form 10-K.

The results of operations for the three month period ended December 31, 1999 are
not  necessarily  indicative  of the results to be expected  for the full fiscal
year.

NOTE 2 - NET INCOME 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,  1999 and 1998,  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, 1999         December 31, 1998

Numerator:
         Net loss                       ($2,322,000)              ($1,600,000)
                                    --------------------------------------------
Denominator:
         Denominator for basic
         Earnings per share -
         Weighted avg. shares              4,376,503                 4,285,579

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

<PAGE>

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

Denominator for diluted earnings
         Per share - adjusted

         Weighted average shares           4,376,503                 4,285,579
         And assumed conversions    --------------------------------------------

Basic loss per share                         ($0.53)                   ($0.37)
                                    --------------------------------------------

Diluted loss per share                       ($0.53)                   ($0.37)
                                    --------------------------------------------


As of December 31, 1999, the Company had issued and outstanding  incentive stock
options to certain  officers and employees  totaling  112,750 shares which had a
strike price  exceeding the closing price of the Company's  common stock on such
date. The 112,750  option shares have a weighted  average strike price of $20.27
and a weighted average outstanding remaining life of 7.16 years.

The  Company's  unaudited   consolidated  results  of  operations  assuming  all
acquisitions  accounted for under the purchase method of accounting had occurred
on October 1, 1998 are as follows for the three months  ended  December 31, 1998
and 1999, respectively:

                                    3 Months 12/31/98          3 Months 12/31/99
Net Sales                              $19,678,000                 $23,627,000
Net Loss                              ($2,263,000)                ($2,322,000)
Diluted loss per share                     ($0.51)                     ($0.53)

The unaudited pro forma  results of operations  are presented for  informational
purposes only and may not  necessarily  reflect the future results of operations
of the  Company or what  results of  operations  would have been had the Company
owned and operated the business as of October 1, 1998.

NOTE 3 - ACQUISITIONS

The chart below summarizes  significant  acquisitions made by the Company during
the fiscal years ended September 30, 1999,  1998 and 1997. Each  acquisition was
completed  through an asset purchase (except for Adventure Marine in fiscal 1997
and Shelby  Marine in fiscal  1999,  which were  stock  purchases)  and has been
accounted for using the purchase method of accounting.  The operating results of
the  companies  acquired  have  been  included  in  the  consolidated  financial
statements  from  the  respective  date  of  acquisition.  The  assets  acquired
generally  include  boat,  motor and trailer  inventory,  parts and  accessories
inventory and to a lesser extent,  property,  plant and equipment.  A summary of
the Company's significant acquisitions follows:

<TABLE>
<CAPTION>
<S>                             <C>        <C>        <C>          <C>         <C>       <C>        <C>       <C>
                             Date of    Purchase   Tangible    Non-compete    Cash    Liabilities Notes    Stock
     Name of Copany        Acquisition    Price      Net        Agreements     Paid    Assumed    Issued   Issued
                                                    Assets     and Goodwill

                                                         (In Thousands)

Fiscal 1999
Amlin, Inc. dba Magic Marine  01/99       $1,639    $6,019         $1,090    $1 ,639   %5,470       $---     $ ---
Sportsman's Haven             01/99        1,748     2,624            514      1,098    1,390        650       ---
Pier 68 Marina                02/99          738     2,218            562        408    2,043        329       ---
DSA Marine Sales &            04/99        2,147     4,798          1,597      2,147    4,248        ---       ---
Service dba The Boatworks
Shelby Marine, Inc.           06/99        1,334     3,426          1,050        809    3,142        ---       525
The New 3 Seas, Inc.          09/99        1,103     1,419          1,100        ---    1,416          3     1,100


Fiscal 1998
Southeastern Marine            11/97       1,730    $1,390        $   280    $1,606     $  ---     $ 124     $ ---
Worthen Marine                 12/97         287       142            145       287        ---       ---       ---
HnR Marine                     04/98         359       359            -0-       359        ---       ---       ---
Moore's Marine                 05/98         777       376            401       777        ---       ---       ---
Rodgers Marine                 09/98         677     2,093            350       327      1,766       ---       350

Fiscal 1997
North Alabama Watersports      10/96         892       687        $   205       812          -         80      ---
Tri-Lakes Marine               11/96       1,243     1,892            644       643      1,937        600      ---
Bent's Marine                  02/97       1,519       840            679     1,064        ---        455      ---
McLeod Marine                  08/97         958       730            228       958        ---        ---      ---
Adventure Marine               09/97       3,023     5,536          2,690     1,430      5,203        115    1,478

</TABLE>


NOTE 4 -  COMPREHENSIVE  INCOMEFor  the quarter  ended  December 31,  1999,  the
Company recorded no comprehensive income items, therefore Comprehensive Net Loss
equaled Net Loss.

     ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION 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.  The Company,  which
currently  operates  37 stores  under the name Travis  Boating  Center in Texas,
Arkansas,  Louisiana,  Alabama,  Tennessee,  Mississippi,  Florida,  Georgia and
Oklahoma 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" and the
"Company"  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,  the
Company has grown both through  acquisitions and the  establishment of new store
locations.  During the 1980's, the Company expanded into San Antonio, Texas with
the  construction  of a  new  store  facility.  The  Company  subsequently  made
acquisitions  of boat retailers  operating  within the Texas markets of Midland,
Dallas and  Abilene.  It was during this initial  period of  expansion  that the
Company began developing the systems necessary to manage a multi-store operation
and leveraging the economies of scale  associated  with volume  purchasing.  The
Company's success in these areas led to the proprietary Travis Edition packaging
concept and the  Company's  pricing  philosophy.  Since 1990,  Travis  Boats has
opened or acquired 33 additional store locations in the following states:  Texas
(3), Arkansas (4), Louisiana (4), Alabama (2),  Tennessee (5),  Mississippi (1),
Florida  (11),  Georgia (1) and Oklahoma  (1).  Effective  January 1, 2000,  the
Company  consolidated  its store  facility in St.  Petersburg,  Florida into its
Clearwater, Florida operations.  Accordingly, the Company's store count has been
adjusted to 37 store locations.

<PAGE>

The Company custom designs and  pre-packages  approximately  75 different models
and combinations of popular brand-name boats, such as Larson, Wellcraft, Carver,
Bayliner,  Sprint, and Sea Ark boats with outboard motors generally manufactured
by Outboard  Marine  Corporation or Brunswick,  along with trailers and numerous
accessories,  under its proprietary Travis Edition product line. These signature
Travis Edition  packages,  which account for the vast majority of total new boat
sales,  include  boats  ranging  in size  from 16 feet to over 30 feet in length
(with an  emphasis on the 16 to 25 foot  pleasure  boat  category).  Each Travis
Edition package has typically 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.  These  factors  enable the Company to provide the customer with an
exceptional  product that is conveniently  packaged for immediate  enjoyment and
competitively priced.

The  Company  believes  that it 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.  The Company's  product line  generally
consists of boat packages  priced from $7,500 to $25,000 with  approximate  even
distribution   within  this  price  range.   While  the  Company's   sales  have
historically  been  concentrated on boats with retail sales prices of $25,000 or
less, the Company in limited  market areas and  quantities  does sell boats that
have retail  sales prices in excess of  $300,000.  Additionally,  as the Company
continues  to operate in Florida  and  enters  other  markets  along the Gulf of
Mexico or other new coastal areas,  management believes that the distribution of
off shore  fishing  boats and cabin  cruisers  will  continue  to  increase as a
percentage  of  net  sales.  Management  believes  that  by  combining  flexible
financing  arrangements  with an even  distribution of products  through a broad
price  range,  the  Company is able to offer boat  packages  to  customers  with
different purchasing budgets and varying income levels.

Results of Operations

     Quarter Ended,  December 31, 1999 Compared to the Quarter  Ended,  December
31, 1998

Net sales. Net sales increased by 95.3% to $23.6 million in the first quarter of
fiscal 2000 from $12.1 million in the first quarter of fiscal 1999.  The primary
components of the increase in net sales have been the result of the newly opened
or acquired store locations in fiscal 1999 and positive  comparable store sales.
Accordingly, of the increase in net sales, $9.9 million, or 86.2% was related to
the fourteen store  locations that were newly opened or acquired in fiscal 1999.
The Company also  benefited  from growth in comparable  store sales.  During the
first quarter of fiscal year 2000, comparable store sales increased by 13.3%, or
$1.1 million,  (18 stores in base) versus a 8.7%  increase in  comparable  store
sales (14 stores in base) during the first quarter of fiscal 1999.

Gross  profit.  Gross  profit  increased  by 103.1% to $6.0 million in the first
quarter of fiscal  2000 from $2.9  million in the same  quarter of fiscal  1999,
while  gross  profit as a percent  of net sales  increased  to 25.3%  from 24.3%
during the same periods.  The increase in total gross profit as a percent of net
sales was  primarily  related to an increase in the gross profit  margins on new
boat sales. The Company's 2000 model year pricing strategy was designed to raise
retail price points and the related profit margins.  Gross profit also benefited
from increases in net sales attributable to F&I products,  parts/accessories and
service labor. Each of these sales categories typically have higher gross profit
margins  than those  related to boat sales and  accordingly  enhance the overall
gross profit margins reported by the Company.

Net sales attributable to F&I Products contributed  $652,000, or 10.9%, of total
gross  profit in the first  quarter of fiscal  2000,  compared to  $322,000,  or
10.9%, of total gross profit for the first quarter of the prior fiscal year. All
costs and  expenses  associated  with the sale of F&I  Products  are included in
selling, general and administrative expenses.

Selling,   general   and   administrative   expenses.   Selling,   general   and
administrative  expenses  increased by 69.8% to $7.7 million in first quarter of
fiscal 2000 from $4.5  million for the first  quarter of fiscal  1999.  However,
selling, general and administrative expenses as a percent of net sales decreased
to 32.4% in the first quarter of fiscal 2000 from 37.2% for the first quarter of
fiscal 1999. The decrease, as a percent of net sales, was primarily attributable
to the  positive  leverage  upon  fixed  expenses  as a result of the  Company's
substantial  sales growth during the quarter ended  December 31, 1999.  See "Net
Sales".

<PAGE>

Depreciation and amortization  expenses, as a percent of net sales, decreased in
the first  quarter of fiscal 2000,  to 2.6% from 3.4% in the same quarter of the
prior  fiscal  year.  The  decrease,  as a percent of net sales,  was  primarily
attributable  to  the  positive  leverage  upon  depreciation  and  amortization
expenses  as a result of the  Company's  substantial  sales  growth  during  the
quarter ended December 31, 1999. See "Net Sales".

Interest expense.  Interest expense increased by 148% to $1,374,000 in the first
quarter  of fiscal  2000 from  $555,000  in the first  quarter  of fiscal  1999.
Interest expense, as a percent of net sales,  increased to 5.8% from 4.6% in the
quarterly periods ended December 31, 2000 and 1999, respectively.  The increased
interest expense, in actual dollars and as a percent of net sales, was primarily
the result of the additional debt incurred in the acquisitions  completed during
fiscal  1999,  as well as  higher  balances  on the  Company's  floor  plan  and
revolving bank lines necessary to support inventory  requirements for the larger
store network.  Interest  expense was also negatively  impacted by a 50-75 basis
point rise in short  term  interest  rates  tied to the Prime and LIBOR  lending
rates  relative to the same period of the prior year. See "Liquidity and Capital
Resources", "Seasonality".

Net loss. The Company posted a net loss of $2.3 million for the first quarter of
fiscal  2000.  This  represents  an  increase of 45.2% from the net loss of $1.6
million in the first  quarter of fiscal  1999.  While the net loss  increased in
actual  dollars,  the  substantial  increase in sales  during the quarter  ended
December 31, 1999,  combined  with improved  gross profit  margins and leveraged
selling,  general and administrative expenses to allow the Company to reduce the
net loss as a percentage of net sales. As a percentage of net sales, the Company
posted a net loss of 9.8% and  13.2% for the first  quarter  of fiscal  2000 and
1999, respectively.  The Company expects to continue to experience higher levels
of net losses in its first  fiscal  quarter  ending  December  31 as a result of
increases  in  the  number  of  store  locations  and  the  seasonality  of  the
recreational boating industry in the states in which it operates. See "Liquidity
and Capital Resources", "Seasonality".

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
expansion. These short-term cash needs have historically been financed with cash
from  operations  and  borrowings  under the  Company's  credit  facilities.  At
December 31, 1999, the Company had working capital of $12.9 million, centered in
$103.9   million  in   inventories,   offset  by  $94.0  million  in  short-term
revolving/floorplan  credit lines  outstanding.  As of December  31,  1999,  the
aggregate  maximum  borrowing  limits  under floor plan and  revolving  lines of
credit were approximately  $102.0 million,  of which the Company was eligible to
borrow  approximately  an aggregate of $97.0  million  pursuant to the Company's
borrowing base formulas. "See Subsequent Event".

Operating  activities  used cash of $28.6  million for the first three months of
fiscal 2000 due primarily to the net  increases of $28.2 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
fourth fiscal quarter.

The Company used net cash in investing  activities of approximately $0.9 million
in the first three  months of fiscal 2000 as the Company  continued  to renovate
stores to superstore  standards,  update  certain  facilities  with its standard
superstore  trade dress  awnings and neon,  and  started  construction  of a new
superstore  facility in San Antonio (which will replace the existing San Antonio
location).

Financing  activities  for the three months  ended,  December 31, 1999  provided
$30.7 million of cash flows primarily from the net proceeds of borrowings  under
the Company's credit facilities.  The Company has a $55.0 million revolving line
of credit agented by Bank of America (formerly  NationsBank of Texas, N.A.). The
line  provides  for  borrowing  pursuant to a borrowing  formula  based upon the
certain of the Company's inventory and accounts receivable.  Collateral consists
of a security interest in specific inventories (and proceeds thereof),  accounts
receivable and contracts in transit. The line has a maturity on January 31, 2000
and pricing is at the  Company's  election of the

<PAGE>

prime  rate  minus  1.00%  or  on a LIBOR based price structure.  There is a fee
on the unused portion assessed quarterly. A comprehensive loan agreement governs
the line of credit. The agreement contains financial  covenants  regulating debt
service  coverages,  tangible net worth,  operating leverage and restrictions on
dividends or distributions.  As of December 31, 1999, $46.8 million was drawn on
the revolving line and the Company could borrow an additional  $8.2 million,  of
which  approximately $3.0 million was immediately  available for borrowing based
upon the revolving line's borrowing formula. As the Company purchases inventory,
the amount purchased increases the borrowing base availability and typically the
Company makes a  determination  to borrow  depending  upon  anticipated  working
capital requirements. "See Subsequent Event".

At December 31, 1999,  the Company  also  maintained  floor plan lines of credit
with various finance companies  providing  approximately $47.0 million in credit
limits.  These floor plan lines  generally  have no stated  maturity and utilize
subsidies from  manufacturers  to provide for certain interest free periods each
calendar year (usually August through May). Certain of these floor plan lines of
credit with finance companies are governed by loan agreements containing various
financial  covenants  concerning,  among others,  ratios governing  tangible net
worth and  leverage.  As of December 31, 1999,  approximately  $44.5 million was
outstanding under these floor plan lines. "See Subsequent Event".

Merchandise inventories were $103.9 million and $75.7 million as of December 31,
1999 and September 30, 1999, respectively.

The  Company's  newly  refinanced  revolving  credit  facility  (see  below) and
internally generated working capital are expected by the Company's management to
be  sufficient  to meet the  Company's  cash  requirements  at least through the
remainder of fiscal 2000.

Liquidity and Capital Resources - Subsequent Event

Effective January 31, 2000 the Company terminated and paid-off its $55.0 million
line of credit  with Bank of America as well as its $47.0  million in floor plan
lines  of  credit  with  various  finance  companies.   Concurrently  with  such
pay-off's,  the Company  entered into new  revolving  line of credit  agreements
aggregating  $110.0 million,  with Deutsche  Financial  Services providing $60.0
million  and   Transamerica   Distribution   Finance   providing  $50.0  million
(collectively, the "New Financing"). The New Financing has a three year term and
includes  both  (i)  floor  plan  financing   which   utilizes   subsidies  from
manufacturers  to provide for certain  interest  free periods each calendar year
(usually  August  through  May) and (ii) a  revolving  credit  sublimit  that is
governed  by  borrowing  bases  applicable  to the  Company's  assets.  The  New
Financing is governed by loan agreements  containing various financial covenants
concerning,  among others,  ratios governing  tangible net worth,  liquidity and
leverage.

Management  believes  the  Company  to be  in  compliance  with  all  terms  and
conditions of the loan agreements governing the New 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-year  period, the average annual net sales for the quarterly
periods  ended  March  31 and  June 30  represented  approximately  27% and 41%,
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.

<PAGE>

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.  While management
believes that the Company's  quarterly net sales will continue to be impacted by
seasonality,  quarterly  results may become less susceptible to certain regional
weather conditions as expansion occurs throughout the southern United States.

Quarterly results may fluctuate as a result of the expenses  associated with new
store openings or  acquisitions,  including the timing thereof.  Prior to fiscal
1997,  the Company had attempted to  concentrate  expansion  during the seasonal
slowdown  generally  occurring in the quarter ending  December 31. During fiscal
1997, the Company  modified its acquisition  strategy to acquire store locations
through-out  the fiscal year. This was done to allow the Company the opportunity
to derive  in-season sales from the  acquisitions as well as to provide a longer
period in which to integrate the acquired store's operations. Alternatively, the
acquisition  costs would typically  include more inventory  expense than if such
acquisition  occurred in the slow, winter season since marine dealer's generally
maintain  higher  in-stock  levels  during the  summer  months.  Such  inventory
acquired may have prices  greater than the Company would  otherwise pay for such
product  and  accordingly,  the  Company  may elect to dispose  of the  acquired
product at reduced prices. 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
21E of the  Exchange  Act 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 Factors"
and the  uncertainties set forth from time to time in the Company's other public
reports, filings and public statements.  All forward-looking  statements in this
Report on Form 10-Q are expressly  qualified in their entirety by the cautionary
statements in this paragraph.

PART II.  OTHER INFORMATION
Item 2.
(c) Securities Issues by Registrant

On September 1, 1999, the Company  consummated the acquisition of certain assets
of The New 3 Seas,  Inc.,  which operated a retail boating store location in Ft.
Myers, Florida. The total consideration for The New 3 Seas consisted of cash and
newly  issued  shares of Common  Stock of the  Company.  The  Company  issued an
aggregate  of  86,005  shares  of its  stock,  with a  value  of  $1,100,000  to
principals  of The New 3 Seas,  Inc.  The common  shares  issued have since been
declared effective pursuant to the Securities Act of 1933 on November 8, 1999 by
the Securities and Exchange Commission.

The  valuation  of the  shares of the common  stock  issued  was  determined  in
conjunction with the requirements and methodology of EITF 95-19.

<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: February 11, 2000     Travis Boats & Motors, Inc.



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