SECURITIES EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                 FORM 10-QSB

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

( )   TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For Quarter Ended:                               Commission File Number:
  March 31, 2004                                          0-7722


                         NEW CENTURY COMPANIES, INC.
--------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)



           DELAWARE                                        061034587
-------------------------------                 ----------------------------
(State or other jurisdiction of                 (IRS Employer Identification
 Incorporation or organization)                             Number)



                          9835 Santa Fe Springs Road
                          Santa Fe Springs, CA 90670
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                    (Zip Code)


                                (562) 906-8455
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)


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 the  registrant  was
required to file such  reports) and (2) has been subject to filing  requirements
for the past 90 days.

                                Yes _X_   No___

The number of shares of Common Stock, par value $ .10 per share,  outstanding as
of March 31, 2004 was 6,995,265.

Transitional Small Business Disclosure Format (check one):  Yes ___  No _X_


<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

      The condensed  consolidated  Financial Statements are set forth at the end
of this document.

                                                                      Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                           ----

   Condensed Consolidated Balance Sheet                                13

   Condensed Consolidated Statements of Operations                     14

   Condensed Consolidated Statements of Cash Flows                     15

   Notes to Condensed Consolidated Financial Statements               16-21


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

ITEM 3. CONTROLS AND PROCEDURES

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

ITEM 2. CHANGES IN SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATERS TO A VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



                                       2

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

     The condensed consolidated Financial Statements are set forth at the end of
this document.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     The following  discussion  should be read in conjunction with the Company's
condensed  consolidated  financial  statements  and the notes thereto  appearing
elsewhere in this Form 10-QSB.  Certain statements contained herein that are not
related  to  historical  results,  including,  without  limitation,   statements
regarding the  Company's  business  strategy and  objectives,  future  financial
position,  expectations about pending litigation and estimated cost savings, are
forward-looking  statements  within the meaning of Section 27A of the Securities
Act and Section 21E of the  Securities  Exchange  Act of 1934,  as amended  (the
"Securities  Exchange  Act") and involve risks and  uncertainties.  Although the
Company believes that the assumptions on which these forward-looking  statements
are based are reasonable,  there can be no assurance that such  assumptions will
prove to be accurate  and actual  results  could  differ  materially  from those
discussed  in the  forward-looking  statements.  Factors  that  could  cause  or
contribute  to such  differences  include,  but are not limited  to,  regulatory
policies,  competition  from other  similar  businesses,  and market and general
policies,  competition  from other  similar  businesses,  and market and general
economic factors.  All forward-looking  statements contained in this Form 10-QSB
are qualified in their entirety by this statement.

OVERVIEW

     On May 25,  2001,  the Company  entered into a plan of  Reorganization  and
Merger with New Century Remanufacturing,  Inc. ("NCR"). Immediately prior to the
merger, the Company had 50,000,000 shares authorized and 2,695,942 shares issued
and outstanding.  Pursuant to the merger, all of the 1,800 outstanding shares of
NCR were  exchanged  for shares of the  Company  on a 1 to 833.33  basis or into
1,500,000  shares of common stock of the Company for a total of 4,195,942 shares
of common stock issued and outstanding.  Immediately after the merger,  all then
existing  officers and directors of the Company  resigned and the  management of
NCR was elected and appointed to such positions;  thereby  effecting a change of
control.  Although NCR became a wholly owned subsidiary of the Company following
the transaction,  because the transaction  resulted in a change of control,  the
transaction was recorded as a "reverse  merger" whereby NCR was considered to be
the accounting acquirer of the Company.

     After the  reverse  merger  the  Company  changed  its name to New  Century
Companies,  Inc. The results of the Company  previously  filed in the past years
are not included  herein.  The related  financial  statements are the results of
operations for NCR.

PLAN OF OPERATIONS

     The  earnings of the Company for the three months ended March 31, 2004 were
negative as a result of a decrease in sales and the corporate  expenses  related
to compliance with the regulatory  requirements  of being a public company.  The
Company's current strategy is to expand its customer sales base with its present
line of machine products.  Plans for expansion are expected to be funded through
current working  capital from ongoing sales.  However,  significant  growth will
require  additional  funds  in the  form  of debt or  equity,  or a  combination
thereof. However, there can be no assurance these funds will be available.


                                       3
<PAGE>

RESULTS OF  OPERATIONS  FOR THE THREE MONTHS ENDED MARCH 31, 2004  COMPARED TO
MARCH 31, 2003.

     Revenues.  The Company generated  revenues of $979,308 for the three months
ended March 31, 2004,  which was a $738,832 or 43% decrease from  $1,718,140 for
the  three  months  ended  March  31,  2003.  The  decrease  is the  result of a
deficiency in working capital, which has limited our ability to fulfill customer
orders.  Additionally,  the  overall  market  for  machine  tools  is  cyclical,
reflecting economic conditions,  production capacity utilization, changes in tax
and fiscal policies,  corporate profitability and financial condition as well as
the general level of business  confidence.  The Company  cannot predict for what
period of time the decreased level of customer purchases will continue,  whether
the level of customer  purchases  will  decline  further,  or the level at which
incoming orders will be.

     Gross  Loss.  Gross loss for the three  months  ended March 31,  2004,  was
$(34,693) or -3.5% of revenues,  compared to $(85,588), or -4.9% of revenues for
the three months ended March 31, 2003.

     Net Loss.  Net operating  loss decreased to ($493,088) for the three months
ended March 31, 2004 compared to $(954,789) for the three months ended March 31,
2003. The primary reason for the decrease  relates to a one-time  charge related
to a write-off of a deposit of $465,000 in fiscal 2003.

     Interest  Expense.  Interest  expense for the three  months ended March 31,
2004,  decreased  to $41,798  compared to  $113,433,  for the three months ended
March 31, 2003,  primarily due to the repayment of $900,000  short-term  loan in
January 2003. In January 2003, the company paid $60,000 additional  interest for
$900,000 and $500,000 short-term loans.

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

     The net cash  decrease of the Company  during the three  months ended March
31,  2004 was  ($155,969).  The  decrease  is due to net cash used in  operating
activities of ($175,207).  The Company has a substantial working capital deficit
and requires an infusion of funds in the form of equity  and/or  debt.  However,
there is no guarantee that the Company will raise sufficient additional funds to
execute  its  business  plan.  To the extent that the Company is unable to raise
sufficient  additional  funds,  the Company's  business plan will  substantially
modified, its operations curtailed or protection under bankruptcy/reorganization
laws sought.

     During  the period  ended  March 31,  2004,  the  Company  issued a Private
Placement Memorandum ("PPM") in which the Company offered to eligible investors,
as defined,  a maximum of 30,000 shares of Series D preferred stock (Series D"),
with a required  minimum  offering of 1,000 shares of Series D to be sold at $25
per share. As of April 30, 2004 and pursuant to the PPM, the Company sold 20,000
shares of Series D to eligible  investors  for proceeds  approximating  $470,000
(net of  commissions  and offering costs of $30,000).  In addition,  the Company
issued  1,000  shares of series D and a warrant  to  purchase  20,000  shares of
restricted  common  stock at  exercise  prices  ranging  from  $0.50  to  $1.00,
immediately vesting and expiring in February 2007.

     The Company is currently  addressing  its liquidity  issue by the following
actions: The Company continues its aggressive program for selling inventory that
has been  produced or is  currently  in  production.  The Company  continues  to
implement plans to further reduce  operating  costs.  The Company is continually
seeking  investment capital through the public markets including through its PPM
discussed  above.  However,  there is no guarantee that any of these  strategies
will enable the Company to meet its obligations for the foreseeable future.

INFLATION AND CHANGING PRICES

      The Company  does not foresee  any  adverse  effects on its  earnings as a
result of inflation or changing prices.

GOING CONCERN

     The  Company has  incurred  operating  losses in the last two years,  has a
working  capital  deficit  and  a  significant   stockholders'   deficit.  These
conditions, among others, raise substantial doubt about the Company's ability to
continue as a going concern.


                                       4
<PAGE>

CRITICAL ACCOUNT POLICIES

      The  preparation  of  financial  statements  and  related  disclosures  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments,  assumptions and estimates that
affect the amounts reported in the condensed  consolidated  financial statements
and the accompanying  notes.  The amounts of assets and liabilities  reported on
the balance sheet and the amounts of revenues and expenses  reported for each of
the fiscal  periods are affected by estimates  and  assumptions,  which are used
for,  but not  limited to, the  accounting  for  revenue  recognition,  accounts
receivable,  doubtful accounts and inventories. Actual results could differ from
these estimates.  The following critical  accounting  policies are significantly
affected by judgments,  assumptions and estimates used in the preparation of the
financial statements:

      Concentration of Credit Risk

      The Company sells products to customers  throughout the United States. The
Company's ability to collect receivables is affected by economic fluctuations in
the geographic areas served by the Company. Although the Company does not obtain
collateral   with  which  to  secure  its   contracts   receivable,   management
periodically reviews contracts receivable and assesses the financial strength of
its customers  and, as a consequence,  believes that the receivable  credit risk
exposure is limited.

      Long-Lived Assets

      In July 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
Statements of Financial  Accounting  Standards ("SFAS") No. 144, "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of." SFAS 144 addresses financial accounting and reporting for the impairment or
disposal of  long-lived  assets.  SFAS 144 requires  that  long-lived  assets be
reviewed for impairment  whenever  events or changes in  circumstances  indicate
that  their  carrying  amount  may not be  recoverable.  If the cost  basis of a
long-lived  asset is greater than the  projected  future  undiscounted  net cash
flows from such asset  (excluding  interest),  an impairment loss is recognized.
Impairment losses are calculated as the difference  between the cost basis of an
asset  and its  estimated  fair  value.  SFAS 144  also  requires  companies  to
separately  report  discounted  operations  and  extends  that  reporting  to  a
component of an entity that either has been  disposed of (by sales,  abandonment
or in a distribution to owners) or is classified as held for sale.  Assets to be
disposed of are reported at the lower of the carrying  amount or fair value less
costs to sell. The Company adopted SFAS 144 on January 1, 2002. The provision of
this statement for assets held for sale or other disposal generally are required
to  be  applied  prospectively  after  the  adoption  date  to  newly  initiated
commitments to plan to sell such assets, as defined, by management. As a result,
management cannot determine the potential effects that adoption of SFAS 144 will
have on the  Company's  financial  statements  with  respect to future  disposal
decision,  if any. To date,  management has determined  that no such  impairment
exists and therefore,  no adjustments  have been made to the carrying  values of
long-lived assets.  There can be no assurance,  however,  that market conditions
will not change or demand for the  Company's  products or services will continue
which could result in impairment of long-lived assets in the future.


                                       5
<PAGE>

      Revenue Recognition

      Service  revenues are billed and recognized in the period the services are
rendered.

      The  Company  accounts  for  shipping  and  handling  fees  and  costs  in
accordance  with EITF 00-10  "Accounting  for  Shipping  and  Handling  Fees and
Costs."  Such fees and costs  incurred  by the  Company  are  immaterial  to the
operations of the Company.

      In  accordance  with SFAS 48,  "Revenue  Recognition  when Right of Return
Exists," revenue is recorded net of an estimate of markdowns,  price concessions
and  warranty  costs.  Such  reserve  is based  on  management's  evaluation  of
historical experience, current industry trends and estimated costs.

      In December  1999, the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin 101 ("SAB 101"),  "Revenue  Recognition," which outlines the
basic criteria that must be met to recognize  revenue and provides  guidance for
presentation  of revenue  and for  disclosure  related  to  revenue  recognition
policies  in  financial  statements  filed  with  the  Securities  and  Exchange
Commission.  Management  believes that the Company's revenue  recognition policy
for  services  and product  sales  conforms to SAB 101.  The Company  recognizes
revenue  of  long-term   contracts  pursuant  to  Statement  of  Position  81-1,
"Accounting for Performance of Construction - Type and Certain Production - Type
Contracts."

      Method of Accounting for Long-Term Contracts

      The Company  uses the  percentage-of-completion  method of  accounting  to
account for long-term  contracts  and,  therefore,  takes into account the cost,
estimated earnings and revenue to date on fixed-fee contracts not yet completed.
The  percentage-of-completion  method is used because management considers total
cost to be the best available  measure of progress on the contracts.  Because of
inherent  uncertainties in estimating costs, it is at least reasonably  possible
that the estimates used will change within the near term.

      The amount of revenue  recognized at the statement  date is the portion of
the total contract price that the cost expended to date bears to the anticipated
final cost, based on current estimates of cost to complete. It is not related to
the progress billings to customers. Contract costs include all materials, direct
labor, machinery, subcontract costs and allocations of indirect overhead.

      Because long-term  contracts may extend over a period of time,  changes in
job  performance,  changes in job  conditions and revisions of estimates of cost
and  earnings  during the  course of the work are  reflected  in the  accounting
period in which the facts that require the revision  become known. At the time a
loss on a contract  becomes known,  the entire amount of the estimated  ultimate
loss is recognized in the consolidated financial statements.

      Contracts  that are  substantially  complete  are  considered  closed  for
consolidated  financial  statement  purposes.  Revenue  earned on  contracts  in
progress in excess of  billings  (under  billings)  is  classified  as a current
asset. Amounts billed in excess of revenue earned  (overbillings) are classified
as a current liability.

      Other Significant Accounting Policies

      Other  significant  accounting  policies not  involving  the same level of
measurement  uncertainties as those discussed above, are nevertheless  important
to an  understanding  of the  financial  statements.  The  policies  related  to
consolidation  and loss  contingencies  require  difficult  judgments on complex
matters that are often subject to multiple  sources of  authoritative  guidance.


                                       6
<PAGE>

Certain of these  matters are among  topics  currently  under  reexamination  by
accounting  standards setters and regulators.  Although no specific  conclusions
reached by these  standards  setters appear likely to cause a material change in
the Company's accounting policies, outcomes cannot be predicted with confidence.
Also see Note 1 of the Notes to  Condensed  Consolidated  Financial  Statements,
Organization and Significant  Accounting  Policies,  which discusses  accounting
policies  that  must  be  selected  by  management  when  there  are  acceptable
alternatives.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

      Disclosure controls and procedures are designed to ensure that information
required to be  disclosed in the reports  filed or submitted  under the Exchange
Act is recorded,  processed,  summarized  and reported,  within the time periods
specified in the SEC's rules and forms.  Disclosure  controls and procedures (as
defined in Rules 13(a)-15(c) of the Exchange Act) include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  in the  reports  filed  under the  Exchange  Act is  accumulated  and
communicated  to  management,  including the Chief  Executive  Officer and Chief
Financial Officer, as appropriate,  to allow timely decisions regarding required
disclosure.

      Within 90 days prior to the filing of this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company' s Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure  controls and procedures.  Based upon and as of the date of March 31,
2004, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's   disclosure  controls  and  procedures  over  financial  reports  are
effective to ensure that the information required to be disclosed in the reports
the Company  files and submits  under the Exchange  Act is recorded,  processed,
summarized and reported as and when required.

(b) Changes in Internal Controls

      There were no changes in the Company's  internal  controls over  financial
reports  during the quarter ended March 31, 2004 that are likely to affect those
controls. Thus, no corrective actions with regard to significant deficiencies or
material weakness were necessary.



                                       7
<PAGE>

PART II.  OTHER INFORMATION

Item 1.     Legal Proceedings

      None.

Item 2.     Changes in Securities

      During the  quarter  ended March 31,  2004,  the  Company  issued  100,000
      shares. The shares were issued pursuant to Section 4(2) of the Act.

Item 3.     Defaults Upon Senior Securities

      1.    A note  payable  to an  unaffiliated  third  party in the  amount of
            $500,000  with an interest  rate of 10% per annum,  matured in April
            2003 and is currently in default.

      2.    A note  payable  to an  unaffiliated  third  party in the  amount of
            $250,000 that was in default was extended  until  December 31, 2003.
            Originally,  the  Company  issued  to the note  holder  warrants  to
            purchase 100,000 shares of the Company's  restricted common stock at
            an  exercise  price  of  $2.00  valued  at  $106,000  (based  on the
            Black-Scholes option pricing model), which the Company has amortized
            to interest expense during the year ended December 31, 2002. As part
            of an extension  agreement,  the Company  effectively  cancelled the
            original  100,000  warrants and issued warrants to purchase  200,000
            shares of common stock at an exercise  price of $1.00,  which vested
            upon grant and expire in December 2003.

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

      None.

Item 5.     Other Information

      None.

Item 6.     Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            31.1  302 Sarbanes  Oxley  Certification  of David  Duquette,  Chief
                  Executive Officer and Chief Financial Officer

            32.1  906 Sarbanes Oxley Certification

      (b)   Reports on Form 8-K:

            None.



                                       8
<PAGE>

                                   SIGNATURES


      In accordance  with the  requirements  of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized.



May 20, 2004                           /s/ David Duquette
                                       ----------------------------------------
                                       Name:  David Duquette
                                       Title: Chief Executive Officer and Chief
                                              Financial Officer




                                       9

<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                           March 31, 2004 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                     ASSETS

<S>                                                                       <C>
Current Assets
       Cash                                                               $        --
       Contracts receivable                                                   268,917
       Inventories, net                                                     1,182,015
       Costs in excess net of billings on uncompleted contracts               334,530
       Prepaid expenses and other current assets                               23,001
                                                                          -----------
            Total current assets                                            1,808,463

PROPERTY AND EQUIPMENT, NET                                                   537,535
                                                                          -----------
                                                                          $ 2,345,998
                                                                          ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
       Bank overdraft                                                     $   164,672
       Accounts payable and accrued expenses                                2,597,663
       Dividends payable                                                      234,750
       Billings in excess of costs on uncompleted contracts                   592,745
       Notes payable                                                        1,215,000
       Current portion of obligations under capital lease                      79,575
                                                                          -----------
            Total current liabilities                                       4,884,405

OBLIGATIONS UNDER CAPITAL LEASE, NET OF CURRENT PORTION                        46,916
                                                                          -----------
TOTAL LIABILITIES                                                           4,931,321
                                                                          -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
       Cumulative, convertible, Series B preferred stock, $1 par value,
       15,000,000 shares authorized, no shares issued and outstanding              --
       Cumulative, convertible, Series C preferred stock, $1 par value,
       75,000 shares authorized, 63,600 shares issued and outstanding
       (liquidation preference of $1,825,000)                                  63,600
       Common stock, $0.10 par value, 50,000,000 shares authorized;
         6,995,265 shares issued and outstanding                              699,527
       Subscriptions receivable                                              (462,500)
       Notes receivable from stockholders                                    (466,159)
       Deferred consulting fees                                               (14,438)
       Additional paid-in capital                                           3,849,194
       Accumulated deficit                                                 (6,254,547)
                                                                          -----------
       Total stockholders' deficit                                         (2,585,323)
                                                                          -----------
                                                                          $ 2,345,998
                                                                          ===========
</TABLE>

--------------------------------------------------------------------------------
Page 13

   See accompanying notes to the condensed consolidated financial statements.

<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three
                      Months Ended March 31, 2004 and 2003
--------------------------------------------------------------------------------

                                                        2004           2003
                                                    -----------    -----------

NET SALES                                           $   979,308    $ 1,718,140

COST OF SALES                                         1,014,001      1,803,728
                                                    -----------    -----------

GROSS LOSS                                              (34,693)       (85,588)
                                                    -----------    -----------

OPERATING EXPENSES
  Consulting and other compensation                     167,859         78,556
  Salaries and related                                   54,964        103,519
  Selling, general and administrative                   235,572        222,126
  Loss of deposit                                            --        465,000
                                                    -----------    -----------
TOTAL OPERATING EXPENSES                                458,395        869,201
                                                    -----------    -----------

OPERATING LOSS                                         (493,088)      (954,789)
                                                    -----------    -----------

INTEREST EXPENSE                                        (41,798)      (113,433)
                                                    -----------    -----------


LOSS BEFORE PROVISION FOR INCOME TAXES                 (534,886)    (1,068,222)

PROVISION FOR INCOME TAXES                                   --          1,600
                                                    -----------    -----------

NET LOSS                                            $  (534,886)   $(1,069,822)
                                                    ===========    ===========

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS          $  (729,886)   $(1,156,447)
                                                    ===========    ===========

BASIC AND DILUTED NET LOSS AVAILABLE TO
  COMMON STOCKHOLDERS PER COMMON SHARE              $     (0.11)   $     (0.20)
                                                    ===========    ===========

BASIC AND DILUTED WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                                  6,911,932      5,853,883
                                                    ===========    ===========


--------------------------------------------------------------------------------
Page 14

   See accompanying notes to the condensed consolidated financial statements.

<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                            2004           2003
                                                                        -----------    -----------
<S>                                                                     <C>            <C>
Cash flows from operating activities:
     Net loss                                                           $  (534,886)   $(1,069,822)
     Adjustments to reconcile net loss to net cash
      (used in) provided by operating activities:
         Depreciation and amortization of property and equipment             69,041         75,235
         Amortization of consulting fees                                     95,375         18,750
         Amortization of debt discount on notes payable                          --         45,000
         Estimated fair market value of common stock issued for
            consulting services                                              50,000         72,000
         Estimated fair market value of warrants issued in connection
            with notes payable                                                   --         17,350
         Changes in operating assets and liabilities:
            Contracts receivable                                           (118,466)       225,371
            Inventories                                                     (25,072)       222,839
            Costs in excess of billings on uncompleted contracts            (13,998)      (196,261)
            Prepaid expenses and other current assets                         2,690       (148,658)
            Deposits                                                             --        465,000
            Accounts payable and accrued expenses                           274,978        148,623
            Billings in excess of costs on uncompleted contracts             25,131        578,705
                                                                        -----------    -----------

     Net cash (used in) provided by operating activities                   (175,207)       454,132
                                                                        -----------    -----------
Cash flows from investing activities:
     Purchases of property and equipment                                       (719)        (8,449)
                                                                        -----------    -----------

     Net cash used in investing activities                                     (719)        (8,449)
                                                                        -----------    -----------
Cash flows from financing activities:
     Bank overdraft                                                          40,114         (5,764)
     Proceeds from the issuance of notes payable                                 --        455,000
     Principal repayments on notes payable                                       --       (900,000)
     Principal repayments on obligations under capital lease                (20,157)       (32,194)
                                                                        -----------    -----------

     Net cash provided by (used in) financing activities                     19,957       (482,958)
                                                                        -----------    -----------

Net decrease in cash                                                       (155,969)       (37,275)

Cash at beginning of period                                                 155,969         80,276
                                                                        -----------    -----------

Cash at end of period                                                   $        --    $    43,001
                                                                        ===========    ===========


Supplemental disclosure of non-cash activities -

         Dividends payable                                              $    39,750    $    28,875
                                                                        ===========    ===========
</TABLE>

--------------------------------------------------------------------------------
Page 15

   See accompanying notes to the condensed consolidated financial statements.

<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF OPERATIONS

New Century  Companies,  Inc. and Subsidiary  (collectively,  the "Company"),  a
California  corporation,  was incorporated March 1996 and is located in Southern
California.  The Company provides after-market  services,  including rebuilding,
retrofitting and remanufacturing of metal cutting machinery.  Once completed,  a
remanufactured  machine is "like new" with state-of-the-art  computers,  and the
cost to the  Company's  customers is  approximately  40% to 50% of that of a new
machine.

The Company  currently  sells its services by direct sales and through a network
of machinery  dealers  across the United  States.  Its  customers  are generally
medium to large sized manufacturing  companies in various industries where metal
cutting is an integral part of their  businesses.  The Company  grants credit to
its customers who are predominately located in the western United States.

The  Company  completed  a  reverse  merger  in May 2001 and  trades  on the OTC
Bulletin Board under the symbol "NCNC."

PRINCIPLES OF CONSOLIDATION

The  condensed  consolidated  financial  statements  include the accounts of New
Century   Companies,   Inc.  and  its  wholly  owned  subsidiary,   New  Century
Remanufacturing  (collectively,  the "Company").  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

GOING CONCERN

The accompanying  condensed consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates, among
other things,  the realization of assets and  satisfaction of liabilities in the
normal  course of  business.  As of March 31,  2004,  the Company  has  negative
working  capital  of  $3,075,942,  an  accumulated  deficit  of  $6,254,547  and
recurring losses from operations. These factors, among others, raise substantial
doubt about the Company's  ability to continue as a going  concern.  The Company
intends to fund operations through increased sales and debt and equity financing
arrangements  which management  believes may be insufficient to fund its capital
expenditures,  working capital and other cash  requirements  for the fiscal year
ending  December  31,  2004.  Therefore,  the  Company  will be required to seek
additional funds to finance its long-term operations.  The successful outcome of
future  activities  cannot be  determined at this time and there is no assurance
that if achieved, the Company will have sufficient funds to execute its intended
business plan or generate positive operating results.

<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

GOING CONCERN (continued)

In response to these problems, management has taken the following actions:

     o    The Company continues its aggressive program for selling inventory.

     o    The Company  continues to implement plans to further reduce  operating
          costs.

     o    The Company is seeking investment capital through the public markets.

     o    The Company has secured  approximately  $3,000,000  of new orders from
          January 2004 through April 2004.

The condensed  consolidated  financial statements do not include any adjustments
related to recoverability  and  classification of assets carrying amounts or the
amount and classification of liabilities that might result should the Company be
unable to continue as a going concern.

INVENTORY

Inventories  are stated at the lower of cost or net  realizable  value.  Cost is
determined under the first-in,  first-out method.  Inventories represent cost of
work in  process  on units not yet under  contract.  Cost  includes  all  direct
material  and labor,  machinery,  subcontractors  and  allocations  of  indirect
overhead.

REVENUE RECOGNITION

Service  revenues  are billed and  recognized  in the  period the  services  are
rendered.

The Company accounts for shipping and handling fees and costs in accordance with
EITF 00-10  "Accounting for Shipping and Handling Fees and Costs." Such fees and
costs incurred by the Company are immaterial to the operations of the Company.

In accordance with SFAS 48, "Revenue  Recognition  when Right of Return Exists,"
revenue is recorded  net of an  estimate of  markdowns,  price  concessions  and
warranty costs.  Such reserve is based on management's  evaluation of historical
experience, current industry trends and estimated costs.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  101 ("SAB  101"),  "Revenue  Recognition,"  which  outlines  the basic
criteria  that  must be met to  recognize  revenue  and  provides  guidance  for
presentation  of revenue  and for  disclosure  related  to  revenue  recognition
policies  in  financial  statements  filed  with  the  Securities  and  Exchange
Commission.  Management  believes that the Company's revenue  recognition policy
for  services  and product  sales  conforms to SAB 101.  The Company  recognizes
revenue  of  long-term   contracts  pursuant  to  Statement  of  Position  81-1,
"Accounting for  Performance of  Construction-Type  and Certain  Production-Type
Contracts" (see below).


<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

METHOD OF ACCOUNTING FOR LONG-TERM CONTRACTS

The Company uses the  percentage-of-completion  method of  accounting to account
for long-term contracts and, therefore,  takes into account the cost,  estimated
earnings  and revenue to date on  fixed-fee  contracts  not yet  completed.  The
percentage-of-completion  method is used because management considers total cost
to be the best  available  measure  of  progress  on the  contracts.  Because of
inherent  uncertainties in estimating costs, it is at least reasonably  possible
that the estimates used will change within the near term.

The amount of revenue  recognized  at the  statement  date is the portion of the
total  contract  price that the cost  expended to date bears to the  anticipated
final cost, based on current estimates of cost to complete. It is not related to
the progress billings to customers. Contract costs include all materials, direct
labor, machinery, subcontract costs and allocations of indirect overhead.

Because  long-term  contracts  may extend over a period of time,  changes in job
performance,  changes in job  conditions  and revisions of estimates of cost and
earnings during the course of the work are reflected in the accounting period in
which the facts that require the revision  become known. At the time a loss on a
contract  becomes  known,  the entire amount of the  estimated  ultimate loss is
recognized in the consolidated financial statements.

Contracts that are substantially complete are considered closed for consolidated
financial statement purposes.  Revenue earned on contracts in progress in excess
of billings (under billings) is classified as a current asset. Amounts billed in
excess of revenue earned (overbillings) are classified as a current liability.

BASIC AND DILUTED LOSS PER COMMON SHARE

Under SFAS 128,  "Earnings  Per  Share,"  basic  earnings  per  common  share is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average  number of common shares assumed to be  outstanding  during the
period of computation.  Diluted  earnings per share is computed similar to basic
earnings  per share  except that the  denominator  is  increased  to include the
number of  additional  common  shares  that would have been  outstanding  if the
potential common shares had been issued and if the additional common shares were
dilutive (there were 1,821,583 and 870,015 additional potential common shares of
March 31, 2004 and 2003,  respectively).  Because the Company has  incurred  net
losses,  basic and diluted loss per share are the same as  additional  potential
common shares would be anti-dilutive.



<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

BASIC AND DILUTED LOSS PER COMMON SHARE (continued)

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings per share  computations for the three month and nine
month periods ended March 31, 2004 and 2004:

                                                    FOR THE THREE MONTHS ENDED
                                                             MARCH 31,
                                                    --------------------------
                                                        2004           2003
                                                    -----------    -----------

Net loss                                            $  (534,886)   $(1,069,822)
Current cumulative preferred dividends                 (234,750)       (86,625)
                                                    -----------    -----------
Numerator for basic and diluted loss per share:
Net loss applicable to common stockholders             (729,886)    (1,546,447)

Denominator for basic and diluted loss per share:
Weighted average shares                               6,911,932      5,853,883
                                                    -----------    -----------

Basic and diluted loss per share                    $     (0.11)   $     (0.20)
                                                    ===========    ===========


STOCK BASED EMPLOYEE COMPENSATION

At March 31, 2004, the Company has one stock-based  employee  compensation  plan
and one stock-based non-employee compensation plan. The Company accounts for the
employee  compensation plan under the recognition and measurement  principles of
APB 25, and related  interpretation.  The Company  accounts for the non-employee
compensation  plan under the  recognition  measurement  principles  of SFAS 123.
There was no employee  stock-based  compensation cost recognized in net loss for
the three month period ended March 31, 2004 and 2003. All options  granted under
these plans had an exercise  price equal to the market  value of the  underlying
common stock on the date of grant. The following table illustrates the effect on
net  loss  and  loss  per  share if the  Company  had  applied  the  fair  value
recognition provisions of SFAS 123 to stock-based employee compensation.


<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

STOCK BASED COMPENSATION (continued)

<TABLE>
<CAPTION>
                                                                       FOR THE THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                      ----------------------------
                                                                          2004            2003
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Net loss applicable to common stockholders:
    As reported                                                       $   (729,886)   $ (1,546,447)
    Deduct: Total stock-based employee compensation expense
            determined under fair value based method for all awards             --              --
                                                                      ------------    ------------
    Pro forma                                                         $   (729,886)   $ (1,546,447)
                                                                      ============    ============

Basic and diluted net loss per share:
    As reported                                                       $      (0.11)   $      (0.20)
                                                                      ============    ============
    Pro forma                                                         $      (0.11)   $      (0.20)
                                                                      ============    ============
</TABLE>

The  above  pro  forma  effects  of  applying  SFAS  123  are  not   necessarily
representative of the impact on reported net loss for future years.

NEW ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements discussed in the notes to the December 31, 2003
financial   statements   filed  previously  with  the  Securities  and  Exchange
Commission in Form 10-KSB that were required to be adopted during the year ended
December 31, 2004 did not have a significant  impact on the Company's  financial
statements.

RECLASSIFICATIONS

Certain  reclassifications  have  been made to the 2003  condensed  consolidated
financial statements to conform to the 2004 presentation.


<PAGE>

--------------------------------------------------------------------------------
                   NEW CENTURY COMPANIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
--------------------------------------------------------------------------------


2. CONTRACTS IN PROGRESS

Contracts in progress as of March 31, 2004 were as follows:

Cumulative costs to date                                            $ 4,289,774
Cumulative gross profit to date                                       2,856,838
                                                                    -----------

Cumulative revenue earned                                             7,146,612

Less progress billings to date                                       (7,404,827)
                                                                    -----------

      Net overbillings                                              $  (258,215)
                                                                    ===========

The following is included in the  accompanying  condensed  consolidated  balance
sheet under these captions as of March 31, 2004:

Costs and estimated earnings on contracts in progress in excess
  of billings
                                                                    $   334,530
Billings in excess of costs and estimated earnings on contracts in
    progress                                                           (592,745)
                                                                    -----------

      Net overbillings                                              $  (258,215)
                                                                    ===========

3. EQUITY TRANSACTIONS

During the quarter ended March 31, 2004,  the Company  issued  100,000 shares of
restricted  common stock valued at $50,000  (estimated based on the market price
on the date of grant) to a consulting firm for services  rendered in relation to
corporate  finance  and  investor  relations.   Since  the  service  period  was
substantially  completed as of March 31, 2004,  the Company  recorded the entire
amount  to  consulting  expense  in  the  accompanying   condensed  consolidated
statements of operations.

During the period ended March 31, 2004, the Company  issued a Private  Placement
Memorandum  ("PPM") in which the  Company  offered  to  eligible  investors,  as
defined,  a maximum of 30,000  shares of Series D preferred  stock  (Series D"),
with a required  minimum  offering of 1,000 shares of Series D to be sold at $25
per share. As of April 30, 2004 and pursuant to the PPM, the Company sold 20,000
shares of Series D to eligible  investors  for proceeds  approximating  $470,000
(net of  commissions  and offering costs of $30,000).  In addition,  the Company
issued  1,000  shares of series D and a warrant  to  purchase  20,000  shares of
restricted  common  stock at  exercise  prices  ranging  from  $0.50  to  $1.00,
immediately vesting and expiring in February 2007.