<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ---------

                                   FORM 10-Q


(MARK ONE)

/X/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
                  For the quarterly period ended April 1, 2000

                                       OR

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

                     For the transition period from _______ to ______

                       COMMISSION FILE NUMBER 1-333-55797

                                 ------------

                              ELGAR HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                DELAWARE                                        51-0373329
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                         Identification No.)

          9250 BROWN DEER ROAD
         SAN DIEGO, CALIFORNIA                                  92121-2294
(Address of Principal Executive Offices)                        (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858) 450-0085

                               ----------------

         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, as amended, 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 such filing requirements for the past 90 days.
Yes X    No
   ---     ---

         As of May 11, 2000, the number of shares outstanding of the
Registrant's Common Stock was 2,300,000.


<PAGE>

                              ELGAR HOLDINGS, INC.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                                     PAGE
PART I             FINANCIAL INFORMATION                                                                            NUMBER
<S>                <C>                                                                                              <C>
Item 1             Consolidated Financial Statements

                       Consolidated Statements of Operations for the three months ended
                         April 3, 1999 (unaudited) and April 1, 2000 (unaudited)....................                  3

                       Consolidated Balance Sheets as of January 1, 2000 and April 1, 2000
                         (unaudited)................................................................                  4

                       Consolidated Statements of Cash Flows for the three months ended April 3,
                         1999 (unaudited) and April 1, 2000 (unaudited).............................                  5

                       Notes to Consolidated Financial Statements (unaudited).......................                  6

Item 2             Management's Discussion and Analysis of Financial Condition and
                     Results of Operations..........................................................                  9

Item 3             Quantitative and Qualitative Disclosures About Market Risks......................                 11

PART II            OTHER INFORMATION

Item 6                 Exhibits and Reports on Form 8-K.............................................                 13

</TABLE>

                                       2

<PAGE>


ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS


                      ELGAR HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           (UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                               FOR THE THREE MONTHS ENDED
                                                             ------------------------------
                                                             APRIL 3, 1999    APRIL 1, 2000
                                                             -------------    -------------
<S>                                                          <C>              <C>
Net sales..............................................         $14,993           $14,230
Cost of sales..........................................           8,589             8,119
                                                                 ------            ------
    Gross profit.......................................           6,404             6,111
Selling, general and administrative expense............           2,644             2,489
Research and development and engineering expenses......           1,497             1,687
Amortization expense...................................             606               609
                                                                  -----             -----
    Operating income...................................           1,657             1,326
Interest expense, net..................................           2,689             2,619
                                                                  -----             -----
Loss before income tax benefit.........................          (1,032)           (1,293)
Income tax benefit.....................................             175                 -
                                                                  -----             -----
    Net loss...........................................          $ (857)         $ (1,293)
                                                                 =======         =========
</TABLE>

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS

                                       3

<PAGE>

                     ELGAR HOLDINGS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                    JANUARY 1, 2000       APRIL 1, 2000
                                                                                    ---------------       -------------
                                     ASSETS                                                                (UNAUDITED)
<S>                                                                                 <C>                   <C>
CURRENT ASSETS:
  Cash and cash equivalents.................................................              $ 4,479                  $ 4
  Accounts receivable, net of allowance for doubtful accounts of $152.......                7,253                8,873
  Inventories...............................................................                7,623                8,872
  Deferred income taxes ....................................................                  796                  796
  Prepaids and other........................................................                  984                1,150
                                                                                           ------               ------
      Total current assets..................................................               21,135               19,695
                                                                                           ------               ------
PROPERTY, PLANT AND EQUIPMENT, at cost, net of accumulated depreciation and
   amortization of $3,093 and $3,306, respectively..........................                2,343                2,571
INTANGIBLE ASSETS, net of accumulated amortization of $8,076 and $8,867,
   respectively.............................................................               34,414               33,623
DEFERRED INCOME TAXES, net of current portion..............................                   653                  653
                                                                                           ------              -------
                                                                                         $ 58,545             $ 56,542
                                                                                          =======               ======
</TABLE>
                      LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
<S>                                                                                   <C>                   <C>
CURRENT LIABILITIES:
  Accounts payable..........................................................              $ 1,748              $ 2,955
  Accrued liabilities.......................................................                7,665                5,392
  Line of credit............................................................                    -                  500
  Current portion of long-term debt.........................................                1,250                2,125
                                                                                           ------               ------
      Total current liabilities.............................................               10,663               10,972
LONG-TERM DEBT, net of current portion......................................               98,750               97,875
                                                                                           ------               ------
         Total liabilities..................................................              109,413              108,847
                                                                                          -------              -------
SERIES A 10% CUMULATIVE REDEEMABLE PREFERRED STOCK,
   no par value, 20,000 shares authorized; 10,000 shares issued and
   outstanding..............................................................               10,707               11,055
                                                                                           ------               ------

STOCKHOLDERS' DEFICIT:
  Series B 6% Cumulative Convertible Preferred Stock, no par value,
     5,000 shares authorized, issued and outstanding........................                5,000                5,000
  Series C 6% Cumulative Convertible Preferred Stock, no par value,
     4,000 shares authorized, issued and outstanding........................                4,000                4,000
  Common Stock, $.01 par value, 5,000,000 shares authorized; 2,300,000 shares
     issued and outstanding.................................................                   23                   23
  Additional paid-in capital................................................              (68,558)             (68,558)
  Accumulated deficit.......................................................              ( 2,040)              (3,825)
                                                                                           -------               ------
                                                                                          (61,575)             (63,360)
                                                                                           -------              -------
                                                                                         $ 58,545             $ 56,542
                                                                                           ======               ======
</TABLE>

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS

                                       4

<PAGE>

                      ELGAR HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                               FOR THE THREE MONTHS ENDED
                                                                                            --------------------------------
                                                                                            APRIL 3, 1999      APRIL 1, 2000
                                                                                            -------------      -------------
<S>                                                                                         <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss.............................................................................         $  (857)           $(1,293)
  Adjustments to reconcile net loss to net cash used in operating activities:
      Amortization of intangibles......................................................             790                791
      Depreciation and amortization on property, plant and equipment...................             293                214
      Loss on sale of property, plant and equipment....................................              27                  1
      (Increases) decreases in assets:
         Accounts receivable...........................................................          (1,045)            (1,620)
         Inventories...................................................................             672             (1,249)
         Prepaids and other............................................................             373               (166)
      Increases (decreases) in liabilities:
         Accounts payable..............................................................          (1,102)             1,207
         Accrued liabilities...........................................................          (2,230)            (2,417)
                                                                                                  ------             ------
  Net cash used in operating activities................................................          (3,079)            (4,532)
                                                                                                  ------             ------
CASH USED IN INVESTING ACTIVITIES:
  Purchases of property, plant and equipment...........................................            (180)              (443)
                                                                                                    ----               ----
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from preferred stock issuance...............................................           4,000                  -
  Proceeds from bank borrowings........................................................               -                500
  Repayments on debt...................................................................          (4,000)                 -
  Payments under capital leases........................................................              (5)                 -
                                                                                                   -----               ---
  Net cash provided by (used in) financing activities..................................              (5)               500
                                                                                                   -----               ---

NET DECREASE IN CASH AND CASH EQUIVALENTS..............................................          (3,264)            (4,475)
CASH AND CASH EQUIVALENTS, beginning of period.........................................           6,507              4,479
                                                                                                  -----              -----
CASH AND CASH EQUIVALENTS, end of period...............................................         $ 3,243            $     4
                                                                                                 ======               ====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest...............................................................         $ 4,736            $ 4,665
  Cash paid for (received from) income taxes...........................................            (596)                11

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Series A preferred stock dividend-in-kind............................................         $   275            $   306
  Series B and Series C preferred stock dividend accrual...............................              82                144
  Accretion of discount on Series A preferred stock....................................              42                 42
</TABLE>

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS

                                       5

<PAGE>

                              ELGAR HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


1. COMPANY OPERATIONS

         Elgar Holdings, Inc., a Delaware corporation (the "Company"),
manufactures and sells programmable power and high power supply units through
its direct and indirect wholly owned subsidiaries, Elgar Electronics Corporation
("Elgar") and Power Ten, to commercial and defense entities as well as to
governmental agencies. The Company's primary sales are within the United States
and Europe.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION/BASIS OF PRESENTATION

         The accompanying consolidated financial statements as of and for the
three months ended April 1, 2000 include the accounts of the Company, its wholly
owned subsidiary, Elgar, and Elgar's wholly owned subsidiary, Power Ten. All
significant intercompany accounts and transactions have been eliminated. These
financial statements have been prepared in accordance with generally accepted
accounting principles and with the instructions to Form 10-Q. The Company
suggests that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-K for
the fiscal year ended January 1, 2000. These financial statements include all
adjustments (consisting of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of financial condition,
results of operations and cash flows for such periods.

   INTERIM ACCOUNTING PERIODS

         The Company operates and reports financial results on a fiscal year of
52 or 53 weeks ending the Saturday closest to December 31. Interim periods
include 13 or 14 weeks ending the last Saturday closest to the end of the
quarter. Results of operations for the three months ended April 1, 2000 are not
necessarily indicative of the results to be expected for the Company's fiscal
year ending December 30, 2000.

   USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

                                       6

<PAGE>

                              ELGAR HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

   INVENTORIES

         Inventories, which include materials, direct labor and manufacturing
overhead, are stated at the lower of cost (first-in, first-out) or market and
are comprised of the following (in thousands):
<TABLE>
<CAPTION>

                                                JANUARY 1, 2000       APRIL 1, 2000
                                                ---------------       -------------
<S>                                             <C>                   <C>
Raw materials...............................          $3,789                $4,096
Work-in-process.............................           2,482                 3,248
Finished goods..............................           1,352                 1,528
                                                      ------                ------
     Total..................................          $7,623                $8,872
                                                      ======                ======
</TABLE>

   RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments and for Hedging Activities." SFAS No. 133 requires
that all derivatives be recorded on the balance sheet as an asset or
liability measured at its fair value with changes in fair value recognized
currently in earnings unless hedge accounting criteria are met. In June 1999,
the FASB issued SFAS No. 137 which deferred the implementation of SFAS No.
133. The Company must implement these provisions for all fiscal quarters
beginning after June 15, 2000.  The Company has not yet determined what
impact, if any, the adoption of SFAS No. 133 will have on its consolidated
financial statements, results of operations or related disclosures thereto.

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). This bulletin draws on existing accounting rules and provides specific
guidance on how those accounting rules should be applied to revenue recognition.
The Company believes that its accounting policies conform to the provisions of
SAB 101.

3. CONCENTRATIONS OF CREDIT RISK

         In the quarter ended April 1, 2000, sales to one customer accounted for
approximately 11% of the Company's net sales. In the quarter ended April 3,
1999, sales to two customers accounted for approximately 25% and 20% of the
Company's net sales. No other customers individually represented more than 10%
of net sales in the three months ended April 3, 1999 and April 1, 2000. The
Company performs ongoing credit evaluation of its customers' financial
condition. The Company maintains reserves for potential credit losses.

4. CREDIT FACILITY AND CAPITAL CALL AGREEMENT

         On March 10, 2000, in anticipation of Elgar's noncompliance with the
EBITDA and fixed charge covenants for the quarter ended April 1, 2000 contained
in Elgar's credit facility, Elgar, the Company and the banks under the credit
facility entered into a third amendment to the credit agreement governing the
facility. In addition to receiving waivers for any covenant violations both
before and after giving effect to the third amendment, the third amendment (i)
resets the fixed charge coverage ratio for the quarter ended April 1, 2000 and
for following quarters of fiscal 2000 and (ii) resets the minimum EBITDA levels
for the

                                       7

<PAGE>

                              ELGAR HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

quarter ended January 1, 2000 and for the following quarters. Elgar was in
compliance with the covenants contained in the amended credit agreement as of
April 1, 2000.

         The Company, Elgar and the Company's majority shareholder are parties
to a capital call agreement with Bankers Trust Company, as agent (the "Capital
Call Agreement"). Pursuant to the terms of this agreement, as amended, the
majority shareholder agreed to contribute up to $5.0 million of capital to the
Company upon the occurrence of certain events, including the Company's failure
to comply with certain financial covenants contained in the Capital Call
Agreement. The Company was in compliance with the these covenants for the
quarter ended April 1, 2000.

5. CONVERTIBLE PREFERRED STOCK

         In connection with the acquisition of Power Ten, the Company issued
5,000 shares of Series B 6% Cumulative Convertible Preferred Stock (the "Series
B Preferred Stock") for cash proceeds of $5.0 million. This offering, which was
made in compliance with the subscription rights contained in the Company's
Shareholders Agreement, was completed on May 29, 1998.

         In connection with entering into the first amendment to the credit
agreement, the Company's majority shareholder made a $4.0 million capital
contribution to the Company. In order to effectuate the contribution, the
Company issued 4,000 shares of Series C 6% Cumulative Convertible Preferred
Stock (the "Series C Preferred Stock") for cash proceeds of $4.0 million. This
offering, which was made in compliance with the subscription rights contained in
the Company's Shareholders Agreement, was completed on March 30, 1999.

         Dividends are payable to the holders of the Series B Preferred Stock
and Series C Preferred Stock at the annual rate per share of 6% times the sum of
(x) $1,000 and (y) accrued but unpaid dividends. For the series B Preferred
Stock, dividends are payable semi-annually on April 30 and October 31. For the
Series C Preferred Stock, dividends are payable semi-annually on March 31 and
September 30. These dividends are payable when and if declared by the Board of
Directors out of funds legally available therefor. During the three months ended
April 1, 2000, the Company accrued $81,756 of dividends on the Series B
Preferred Stock and $61,872 of dividends on the Series C Preferred Stock.

6. INTEREST RATE SWAP

         On June 22, 1998, the Company entered into an interest rate swap
agreement with a bank with a notional amount of $7.5 million. Under the swap
agreement, the Company is required to make a payment based on a fixed rate of
5.83% on each March 24, June 24, September 24 and December 24. This swap
agreement continues for the life of the related term loan agreement, with the
notional amounts of the swap decreasing as principal decreases on the related
loan agreement, terminating on June 25, 2001. The Company receives a floating
rate based on three-month LIBOR on the same dates as described above. In
connection with the swap agreement, the Company has included settlement expenses
(income) of $10,875 and $(7,000), respectively, in interest expense, net, in its
consolidated statements of operations for the three months ended April 3, 1999
and April 1, 2000.

                                       8

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The following discussion should be read in conjunction with the
unaudited Consolidated Financial Statements and Notes thereto of the Company
included elsewhere herein.

         This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of management as well as
assumptions made by, and information currently available to management. The
words "anticipates," "believes," "estimates," "expects," "plans," "intends" and
similar expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements. Such statements reflect the
current views of the Company, with respect to future events and are subject to
certain risks, uncertainties and assumptions, that could cause actual results to
differ materially from those expressed in any forward-looking statement,
including, without limitation: competition from other manufacturers in the
Company's industry, loss of key employees and/or general economic conditions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated or expected. The
Company does not intend to update these forward-looking statements.

RESULTS OF OPERATIONS

         The following table sets forth certain income statement information for
the Company as a percentage of net sales for the three months ended April 3,
1999 and April 1, 2000:
<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                 -------------------------------
                                                                 APRIL 3, 1999     APRIL 1, 2000
                                                                 -------------     -------------
<S>                                                              <C>               <C>
Net sales.................................................           100.0%           100.0%
Cost of sales.............................................            57.3             57.1
                                                                     -----            -----
    Gross profit..........................................            42.7             42.9
Selling, general and administrative expense...............            17.6             17.5
Research and development and engineering expenses.........            10.0             11.8
Amortization expense......................................             4.0              4.3
                                                                      -----            -----
    Operating income......................................            11.1%             9.3%
                                                                      =====             ====
</TABLE>

         NET SALES. Net sales for the quarter ended April 1, 2000 were $14.2
million, a decrease of $0.8 million, or 5.3%, from net sales of $15.0 million
for the quarter ended April 3, 1999. This decrease was mainly due to a decrease
in sales of both Space Systems products and of products related to the CASS
Program for the U.S. Navy, partially offset by an increase in sales of
programmable DC power products, including sales of Sorensen and Power Ten
products and sales to Racal. In May 1998, Racal notified the Company that a
leading semiconductor manufacturer had decided to cease orders for the Racal
product utilizing Elgar's AT 8000 DC power supplies until the next generation
technology was available. In November 1999, the Company started to ship power
supplies containing this next generation technology to Racal, resulting in sales
of $1.5 million to Racal in the quarter ended April 1, 2000 compared to zero in
the quarter ended April 3, 1999.

         GROSS PROFIT. Gross profit for the quarter ended April 1, 2000 was $6.1
million, a decrease of $0.3 million, or 4.7%, from gross profit of $6.4 million
for the quarter ended April 3, 1999. As a percentage of net sales, gross profit
remained relatively consistent, increasing from 42.7% for the quarter ended
April 3, 1999 to 42.9% for the quarter ended April 1, 2000.

                                       9

<PAGE>

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses were $2.5 million for the quarter ended April
1, 2000, a slight decrease of $0.1 million, or 3.8%, from SG&A expenses of $2.6
million for the quarter ended April 3, 1999. SG&A expenses decreased slightly as
a percentage of net sales from 17.6% for the quarter ended April 3, 1999 to
17.5% for the quarter ended April 1, 2000. The decrease in SG&A expense was
primarily due to lower compensation expense in the quarter ended April 1, 2000
compared to the quarter ended April 3, 1999.

         RESEARCH AND DEVELOPMENT AND ENGINEERING EXPENSES. Research and
development and engineering expenses were $1.7 million for the quarter ended
April 1, 2000, an increase of $0.2 million, or 13.3%, from research and
development and engineering expenses of $1.5 million for the quarter ended April
3, 1999. As a percentage of net sales, research and development and engineering
expense increased from 10.0% for the quarter ended April 3, 1999 to 11.8% for
the quarter ended April 1, 2000. The increase in both dollars and as a
percentage of net sales was due to higher compensation and headcount for the
quarter ended April 1, 2000 as compared to the quarter ended April 3, 1999.

         AMORTIZATION EXPENSE. Amortization expense was $0.6 million for each of
the quarters ended April 1, 2000 and April 3, 1999.

         OPERATING INCOME. Operating income was $1.3 million for the quarter
ended April 1, 2000, a decrease of $0.4 million, or 23.5%, from operating income
of $1.7 million for the quarter ended April 3, 1999. Operating income decreased
as a percentage of net sales from 11.1% for the quarter ended April 3, 1999 to
9.3% for the quarter ended April 1, 2000, due to the factors discussed above.

         INCOME TAXES. Income taxes for the three months ended April 3, 1999
contained a tax benefit of $0.2 million, compared to zero for the three months
ended April 1, 2000. For the quarter ended April 3, 1999, the Company had
generated losses that resulted in carryback benefits that were reflected in
income. Losses generated in the quarter ended April 1, 2000 do not have a
carryback benefit and thus have not been recognized in income.

LIQUIDITY AND CAPITAL RESOURCES

         CASH FLOW. The Company's principal uses of cash are to finance working
capital, debt service and capital expenditures. Historically, the Company has
funded its activities principally from working capital, a revolving line of
credit and, recently, the sale of convertible preferred stock to its
stockholders.

         SOURCES OF CAPITAL. The Company anticipates that its principal uses of
cash will be working capital requirements, debt service requirements and capital
expenditures.

         Based upon current and anticipated levels of operations, management
believes that its cash flow from operations, together with amounts available
under the Company's credit facility, will be adequate to meet its anticipated
requirements for the foreseeable future for working capital, interest payments,
payments under the Company's term credit facility and capital expenditures.
Management believes, but can give no assurance, that Elgar will be in
compliance with the financial covenants contained in its credit agreement during
2000.

         CAPITAL REQUIREMENTS. The Company's capital expenditures were $443,000
in the three months ended April 1, 2000 and $180,000 in the three months ended
April 3, 1999.

                                       10

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         We have only limited involvement in derivative financial instruments.
We do not hold or issue derivative financial instruments for trading purposes.
As of April 1, 2000, $10,000,000 of outstanding borrowings under our credit
facility are at variable interest rates and we are thus subject to market risk
resulting from interest rate fluctuations. We enter into interest rate swaps in
part to alter interest rate exposures. Interest rate swaps allow us to raise
long-term borrowings at floating rates and effectively swap them into fixed
rates that are lower than those available to us if fixed-rate borrowings were
made directly. Under interest rate swaps, we agree with another party to
exchange, at specified intervals, the difference between fixed-rate and
floating-rate amounts calculated by reference to an agreed notional principal
amount. As of April 1, 2000, all but $2,500,000 of our long-term bank debt was
covered by this swap arrangement. Thus, our exposure with respect to upward
movements in interest rates is this portion of our bank debt.

         In addition, we are exposed to market risks related to fluctuations in
interest rates on our $90,000,000 of senior notes outstanding at April 1, 2000.
For fixed rate debt such as the senior notes, changes in interest rates
generally affect the fair value of the debt instrument. We do not have an
obligation to repay the senior notes prior to maturity in February 2008 and, as
a result, interest-rate risk and changes in fair value should not have a
significant impact on us.

         The tables below provide information as of April 1, 2000 about our
derivative instruments and other financial instruments that are sensitive to
changes in interest rates.

LONG TERM BANK DEBT (VARIABLE RATE)
-----------------------------------
Principal amount                           $10,000,000(1)
Variable interest rate                     9.0625%(2)
Maturity-loan                              February 3, 2003
Remaining principal payments:
          2000                                  $2,125,000
          2001                                  $3,875,000
          2002                                  $4,000,000
-----------
(1) $7,500,000 of this amount is covered by the interest-rate swap arrangement
described below.
(2) Renewals are based on the Eurodollar Rate plus 2.75%.

REVOLVING BANK DEBT  (VARIABLE RATE)
------------------------------------
Line of credit limit                            $5,000,000
Principal amount outstanding                      $500,000
Variable interest rate                            10.75%(1)
Loan expiration                            February 3, 2003
-----------
(1) Renewals are based on the Eurodollar Rate plus 2.75%.

                                       11

<PAGE>

INTEREST RATE SWAP ARRANGEMENT (FIXED RATE)
-------------------------------------------
<TABLE>
<CAPTION>
<S>                                        <C>
Parties                                    The Company (fixed rate payor) and Bankers Trust Company
                                           (floating rate payor)
Notional amount                            $7,500,000
Fixed interest rate                        5.83% (1)
Floating interest rate                     6.24625% for the current period (2)
Swap interest/(credit)                     ($7,000) (3)
Commencement date                          June 24, 1998
Maturity date                              June 25, 2001
</TABLE>
-----------
(1)   As the fixed interest rate payor, the Company is required to pay a fixed
      rate of 5.83% per annum on the $7,500,000 notional amount, payable
      quarterly on each March 24, June 24, September 24 and December 24.
(2)   As the floating rate payor, Bankers Trust Company is required to pay a
      floating rate of interest on the $7,500,000 notional amount, based on the
      three-month London Interbank Offering Rate (LIBOR), payable quarterly on
      each March 24, June 24, September 24 and December 24.
(3)   In connection with the swap agreement, the Company recorded $7,000 as a
      credit to interest expense for the three months ended April 1, 2000.


SENIOR NOTES (FIXED RATE)
-------------------------
Principal amount outstanding               $90,000,000
Fixed interest rate                        9.875%
Maturity date                              February 1, 2008

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<PAGE>

PART II  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

              (a)   EXHIBITS.

              EXHIBIT NO.        DESCRIPTION
                  27             Financial Data Schedule


              (b) No current reports on Form 8-K were filed during the quarter
ended April 1, 2000.


                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                ELGAR HOLDINGS, INC.


Dated:  May 11, 2000            By: /s/ Christopher W. Kelford
                                    ------------------------------------------
                                    Christopher W. Kelford
                                    Vice President-Finance, Chief Financial
                                    Officer, Treasurer and Assistant Secretary


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