Fountain Powerboat Industries, Inc. Reports Second Quarter Results; Sales Up 98% From Second Quarter Ending 12/31/01; Net Income $.10 Per Share.

    Business Editors

    WASHINGTON, N.C.--(BUSINESS WIRE)--Feb. 12, 2003--Fountain
Powerboat Industries, Inc. (NASDAQ: FPWR), the leading manufacturer of
high performance sport boats, fish boats, and express cruisers,
announces results for the second quarter ended December 31, 2002.
    Net sales for the quarter were $12,941,227 up from sales of
$6,553,076 for the same quarter in the previous fiscal year. Net
earnings were $497,708 for the second quarter of fiscal 2003 compared
to a net loss of $1,417,651 for the same quarter of fiscal 2002.
    Net sales for the first six months of fiscal 2003 ending December
31, 2002 were $25,016,213 with net earnings of $701,911 or $.15 per
share, after accounting for deferred taxes of $352,465. Operating
income for the quarter was $881,818 and for the first six months of
the 2003 fiscal year was $1,545,087.
    President and CEO, Reginald Fountain, says, "Since its beginning
in 1978 and until very recently the primary focus of Fountain
Powerboats was asset and sales growth through land and building
acquisition, research and development and technology advancement,
aggressive marketing through offshore racing and tournament fishing,
all needed to create market penetration and a strong brand image.
    "The primary focus of Fountain Powerboats today and moving
forward, is growth and profitability. All assets of our company are
now being directed towards the bottom line.
    "We are making a concentrated effort to expand and better train
our dealer organization so that it becomes easier to meet higher sales
budgets. The sales results from the first two quarters of the current
fiscal year would suggest that the strategy is working.
    "We have also reduced our general expenses by more than $5,000,000
annually when compared to the 2000 fiscal year. Second quarter sales
were among the best in the company's history and expected continued
sales improvement and cost reductions should propel the company to a
substantially profitable fiscal year ending 2003."

    Safe harbor for forward-looking statements:

    This press release may contain forward-looking statements
projecting, forecasting, or estimating the Company's performance and
industry trends. The achievement of these projections, forecasts, or
estimates is subject to certain risks and uncertainties, which include
general economic and industry conditions that affect all businesses,
as well as matters that are specific to the Company and the markets it
serves. Risks that are specific to the company and its markets
include, but are not limited to, the cyclical nature of the marine
industry; competition in pricing; new product development from
competitors; the concentration of Company sales with a few major
customers; labor relations at the Company and at its customers and
suppliers; and the Company's single-source supply and just-in-time
inventory for some critical boat components, which could adversely
affect production if a single-source supplier is unable to meet the
Company's requirements in a timely manner. Actual results and events
may differ materially from those projected, forecasted, or estimated.
The Company assumes no obligation to update the forward-looking
statements or to update the reason actual results could differ from
those contemplated by such forward-looking statements.
-0-
*T

          FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF OPERATIONS

                 For The Three Months Ended   For The Six Months Ended
                       December 31                  December 31
                 --------------------------   ------------------------
                     2002         2001          2002         2001
                 -----------   ----------    ----------   -----------

NET SALES        $12,941,227   $6,553,076   $25,016,213   $14,930,387

COST OF SALES     10,570,853    7,256,987    20,739,887    15,146,984
                  ----------    ---------    ----------    ----------

 Gross Profit      2,370,374     (595,201)    4,276,326      (216,597)

EXPENSES
 Selling Expense   1,082,315      987,379     1,915,293     1,550,432
 Selling Expense -
   related parties         -            -             -             -
 General &
  Administrative     406,241      475,781       815,946       963,506
                   ---------    ---------     ---------     ---------


   Total Expenses  1,488,556    1,463,160     2,731,239     2,513,938
                   ---------    ---------     ---------     ---------


OPERATING INCOME
 (LOSS)              881,818   (2,058,361)    1,545,087    (2,730,535)

NON-OPERATING
 INCOME/(EXPENSE)
   Other               1,389        5,135        29,965         4,283
Income
 Interest Expense   (214,475)    (262,516)     (520,676)     (404,365)
                    --------     --------      --------      --------


INCOME (LOSS)
 BEFORE TAX          668,732   (2,315,742)    1,054,376    (3,130,617)

CURRENT TAX
 EXPENSE                   -            -             -             -

DEFERRED TAXES
 (BENEFIT)           171,024     (898,091)      352,465    (1,206,323)
                     -------     --------       -------     ---------

NET INCOME
 (LOSS)              497,708   (1,417,651)      701,911    (1,924,293)

EARNINGS (LOSS)
 PER SHARE               .10         (.30)          .15          (.41)
                     -------     --------       -------      --------
WEIGHTED
 AVERAGE SHARES
 OUTSTANDING       4,745,108    4,732,608     4,745,108     4,732,608
                   ---------    ---------     ---------     ---------

DILUTED EARNINGS
 PER SHARE               .03          N/A           .07           N/A
                   ---------    ---------     ---------     ---------
DILUTED WEIGHTED
 AVERAGE SHARES
 OUTSTANDING       4,825,399          N/A      4,803,886          N/A
                   ---------    ---------     ----------    ---------
 *T

    --30--mh/ch*

    CONTACT: Fountain Powerboat Industries, Inc.
             R.M. Fountain, Jr. or Betty Smith, 252/975-2000

    KEYWORD: NORTH CAROLINA
    INDUSTRY KEYWORD: MANUFACTURING SPORTS TRANSPORTATION EARNINGS
    SOURCE: Fountain Powerboat Industries, Inc.