<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 1999

                         Commission file number 0-21630

                       ACTION PERFORMANCE COMPANIES, INC.
             (Exact Name of Registrant as Specified in Its Charter)


         ARIZONA                                         86-0704792
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                              4707 E. Baseline Road
                                Phoenix, AZ 85040
                                 (602) 337-3700

              (Address, including zip code, and telephone number,
              including area code, of principal executive offices)

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 such filing
requirements for the past 90 days. Yes X  No ___

As of August 10, 1999, there were outstanding 16,925,085 shares of the
registrant's Common Stock, par value $.01 per share.
<PAGE>   2
PART I, ITEM 1    FINANCIAL STATEMENTS

                       ACTION PERFORMANCE COMPANIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                   AS OF JUNE 30, 1999 AND SEPTEMBER 30, 1998
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                  June 30,        September 30,
                                                                                    1999              1998
                                                                                  -----------     -------------
                                                                                  (Unaudited)
<S>                                                                               <C>              <C>
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents ............................................       $  53,176        $  60,867
     Accounts receivable, net of allowance for
       doubtful accounts of $1,332 and $986, respectively .................          53,755           36,314
     Inventories ..........................................................          35,963           35,790
     Prepaid royalties ....................................................           9,618            5,745
     Prepaid expenses and other assets ....................................           3,971            4,961
                                                                                  ---------        ---------
         Total current assets .............................................         156,483          143,677

PROPERTY AND EQUIPMENT, net ...............................................          52,832           46,053

GOODWILL AND OTHER INTANGIBLES, net .......................................         103,371          106,146

OTHER ASSETS, net .........................................................          11,108           10,058
                                                                                  ---------        ---------
                                                                                  $ 323,794        $ 305,934
                                                                                  =========        =========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable .....................................................       $  17,014        $  11,430
     Accrued royalties ....................................................          15,311           10,589
     Accrued expenses and other ...........................................          18,726           10,973
     Current portion of long-term debt ....................................           2,952           23,746
                                                                                  ---------        ---------
         Total current liabilities ........................................          54,003           56,738
                                                                                  ---------        ---------

LONG-TERM DEBT:
     Convertible subordinated notes .......................................         100,000          100,000
     Other long-term debt .................................................           9,216           11,850
                                                                                  ---------        ---------
         Total long-term debt .............................................         109,216          111,850
                                                                                  ---------        ---------

MINORITY INTEREST .........................................................           1,681              914
                                                                                  ---------        ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
     Preferred stock, no par value, 5,000,000 shares
        authorized, no shares issued or outstanding .......................            --               --
     Common stock, $.01 par value, 25,000,000 shares authorized, 16,924,754
        and 16,423,238 shares issued and outstanding, respectively ........             169              164
     Additional paid-in capital ...........................................          94,748           91,974
     Accumulated other comprehensive income (loss) ........................          (1,633)           1,682
     Retained earnings ....................................................          65,610           42,612
                                                                                  ---------        ---------
         Total shareholders' equity .......................................         158,894          136,432
                                                                                  ---------        ---------
                                                                                  $ 323,794        $ 305,934
                                                                                  =========        =========
</TABLE>

                 The accompanying notes are an integral part of
                        these consolidated balance sheets


                                       2
<PAGE>   3
                       ACTION PERFORMANCE COMPANIES, INC.
                      UNAUDITED CONSOLIDATED STATEMENTS OF
              OPERATIONS FOR THE THREE MONTH AND NINE MONTH PERIODS
                          ENDED JUNE 30, 1999 AND 1998
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                        Three Months Ended        Nine  Months Ended
                                                             June 30                   June  30
                                                       --------------------     ----------------------
                                                         1999        1998         1999          1998
                                                       --------   ---------     ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>
Sales:
     Collectibles .................................   $  63,807    $  42,815    $ 156,113    $  92,008
     Apparel and souvenirs ........................      35,434       33,102       89,863       78,727
     Other ........................................       2,283          876        6,042        2,131
                                                      ---------    ---------    ---------    ---------
         Net sales ................................     101,524       76,793      252,018      172,866

Cost of sales .....................................      60,687       47,265      155,452      108,120
                                                      ---------    ---------    ---------    ---------

Gross profit ......................................      40,837       29,528       96,566       64,746
                                                      ---------    ---------    ---------    ---------

Operating expenses:
     Selling, general and administrative expenses .      18,277       13,215       48,977       31,950
     Non-recurring charge for litigation settlement        --           --           --            950
     Amortization of goodwill and other intangibles       1,603        1,281        4,561        2,971
                                                      ---------    ---------    ---------    ---------
         Total operating expenses .................      19,880       14,496       53,538       35,871
                                                      ---------    ---------    ---------    ---------

Income from operations ............................      20,957       15,032       43,028       28,875
                                                      ---------    ---------    ---------    ---------

Other income (expense):
     Interest income and other, net ...............         555        1,231        1,901        1,695
     Interest expense .............................      (1,615)      (1,928)      (5,342)      (3,416)
                                                      ---------    ---------    ---------    ---------
         Total other income (expense) .............      (1,060)        (697)      (3,441)      (1,721)
                                                      ---------    ---------    ---------    ---------
Income before income taxes and minority interest ..      19,897       14,335       39,587       27,154
Minority interest in earnings .....................        (613)         (88)      (1,257)         (88)
                                                      ---------    ---------    ---------    ---------
Income before provision for income taxes ..........      19,284       14,247       38,330       27,066
Provision for income taxes ........................      (7,714)      (5,699)     (15,332)     (10,826)
                                                      ---------    ---------    ---------    ---------

NET INCOME ........................................   $  11,570    $   8,548    $  22,998    $  16,240
                                                      ---------    ---------    ---------    ---------

Other comprehensive income (expense) net of tax:
     Foreign currency translation adjustment ......      (1,504)        --         (3,314)        --
                                                      ---------    ---------    ---------    ---------

COMPREHENSIVE INCOME ..............................   $  10,066    $   8,548    $  19,684    $  16,240
                                                      =========    =========    =========    =========

NET INCOME PER COMMON SHARE:
     Basic ........................................   $    0.68    $    0.53    $    1.37    $    1.01
                                                      =========    =========    =========    =========
     Diluted ......................................   $    0.64    $    0.50    $    1.33    $    0.98
                                                      =========    =========    =========    =========

WEIGHTED AVERAGE SHARES OUTSTANDING:
     Basic ........................................      16,895       16,195       16,743       16,093
                                                      =========    =========    =========    =========
     Diluted ......................................      19,297       18,766       19,165       16,627
                                                      =========    =========    =========    =========
</TABLE>



                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       3
<PAGE>   4
                       ACTION PERFORMANCE COMPANIES, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED JUNE 30, 1999 AND 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              1999         1998
                                                                           ---------    ---------

<S>                                                                        <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................................   $  22,998    $  16,240
     Adjustments to reconcile net income to
        net cash provided by operating activities:
     Depreciation and amortization .....................................      16,359        7,845
     Undistributed earnings to minority shareholders ...................         961           88
     Change in assets and liabilities, net of businesses acquired:
         Accounts receivable ...........................................     (16,830)      (9,014)
         Inventories ...................................................         183      (13,186)
         Prepaid royalties .............................................      (3,873)         135
         Prepaid expenses and other assets .............................      (1,003)        (748)
         Accounts payable ..............................................       3,580        2,717
         Accrued royalties .............................................       4,723        3,404
         Accrued expenses and other ....................................       7,326        6,435
                                                                           ---------    ---------
              Net cash provided by operating activities ................      34,424       13,916
                                                                           ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment ................................     (19,187)     (14,248)
     Proceeds from sale of equipment ...................................         155          383
     Acquisition of businesses and other intangibles, less cash acquired      (3,366)     (34,824)
                                                                           ---------    ---------
              Net cash used in investing activities ....................     (22,398)     (48,689)
                                                                           ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings on line of credit ......................................        --          9,600
     Payments on line of credit ........................................         (45)      (9,600)
     Net proceeds from issuance of common stock
        upon exercise of stock options .................................       3,823        1,362
     Payments on long-term debt ........................................     (23,799)      (6,400)
     Issuance of convertible subordinated notes ........................        --        100,000
     Payments for offering-related expenses ............................        --         (3,500)
     Collections on notes receivable ...................................         604           32
                                                                           ---------    ---------
              Net cash provided by (used in) financing activities ......     (19,417)      91,494
                                                                           ---------    ---------

     Effect of exchange rate changes on cash and cash equivalents ......        (300)        --
                                                                           ---------    ---------

     Net change in cash and cash equivalents ...........................      (7,691)      56,721
     Cash and cash equivalents, beginning of period ....................      60,867       29,318
                                                                           ---------    ---------
     Cash and cash equivalents, end of period ..........................      53,176    $  86,039
                                                                           =========    =========
</TABLE>



                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       4
<PAGE>   5
                       ACTION PERFORMANCE COMPANIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999


(1)  INTERIM FINANCIAL REPORTING

    The accompanying unaudited consolidated financial statements for Action
Performance Companies, Inc. and subsidiaries (the "Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations, and
cash flows for the periods presented have been made. The results of operations
for the nine-month period ended June 30, 1999 are not necessarily indicative of
the operating results that may be expected for the entire year ending September
30, 1999. Certain prior period amounts have been reclassified to conform to the
June 30, 1999 presentation. These financial statements should be read in
conjunction with the Company's Form 10-K/A for the fiscal year ended September
30, 1998.

(2)  RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

    In fiscal 1999, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," issued by the Financial Accounting Standards Board. The adoption of
SFAS No. 130 did not have a material effect on the Company's financial position
or results of operations. At June 30, 1999, the Company's accumulated other
comprehensive income (loss) balance consisted of cumulative foreign currency
translation adjustments of approximately $(1,633,000).

(3)  SUPPLEMENTAL CASH FLOW INFORMATION

    The supplemental cash flow disclosures and non-cash transactions for the
nine-month periods ended June 30, 1999 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  1999      1998
                                                                -------   -------
<S>                                                             <C>       <C>
Supplemental disclosures:
     Interest paid ..........................................   $ 4,166   $ 1,376
     Income taxes paid ......................................     7,764     6,304

Non-cash transactions:
     Common stock issued in connection with license agreement      --       1,000
     Debt and liabilities incurred or assumed in acquisitions     4,048    17,637
     Sale of equipment for notes receivable .................      --          35
     Assets acquired under note .............................       111     2,957
</TABLE>


                                       5
<PAGE>   6
(4)  RECENT ACQUISITIONS AND LICENSE AGREEMENTS

     On October 27, 1998, the Company acquired all of the outstanding stock
of Intellectual Properties Group, Inc. ("IPG") in exchange for 35,000 shares of
the Company's restricted common stock. IPG creates and develops promotional
programs for corporate sponsors of motorsports. The transaction has been
accounted for as a pooling of interests. Prior period financial statements have
not been restated because IPG's historical operating results and financial
position are not material in relation to the Company's operating results and
financial position.

     On November 23, 1998, the Company acquired Tech 2000 Worldwide, Inc.
("Tech 2000"), a privately held Internet company, through a merger of Tech 2000
and Action Interactive, Inc., a wholly owned subsidiary of the Company. Under
the terms of the merger agreement, the Company issued 137,925 shares of its
restricted common stock in exchange for all of the issued and outstanding common
stock of Tech 2000. The transaction has been accounted for as a pooling of
interests. Prior period financial statements have not been restated because Tech
2000's historical operating results and financial position are not material in
relation to the Company's operating results and financial position.

     On November 30, 1998, the Company entered into an exclusive licensing
agreement with CART Licensed Products, L.P., the licensing arm of Championship
Auto Racing Teams, Inc. ("CART"). Under the terms of the licensing agreement,
the Company obtained the exclusive rights to the CART series and FedEx
Championship Series logos, as well as exclusive rights to five teams in the CART
series, including Newman/Haas Racing, PacWest Racing Group, Target/Chip Ganassi
Racing, Team Green, Inc., and Team Rahal, Inc. In addition, the Company also
obtained the non-exclusive rights for a minimum of 75% of the other teams and
drivers that participate in CART sanctioned race events. The rights granted
under the agreement allow the Company to create a line of collectible vehicles
consistent with the detail and quality featured in its existing die-cast
collectibles and allow the Company to market or sublicense a broad range of toy
products such as plastic and remote control vehicles, action figures, miniature
helmets, board games, plush toys, and puzzles. The initial term of the agreement
is for five years with a five-year renewal option.

     On January 11, 1999, the Company acquired all of the outstanding stock
of Goodsports Holdings Pty. Ltd., an Australian-based marketer of Formula
One-related apparel and other merchandise. The consideration paid by the Company
consisted of the assumption of certain liabilities and contingent payments of up
to $3.6 million to be paid over a four-year period based upon the attainment of
certain performance objectives. The acquisition was accounted for as a purchase.

(5)  REPAYMENT OF SENIOR NOTES

     On January 4, 1999, the Company repaid $20 million of 8.05% Senior
Notes, which matured on January 2, 1999.

(6)  COMMITMENTS AND CONTINGENCIES

     The Company is subject to certain asserted and unasserted claims
encountered in the normal course of business. The Company believes that the
resolution of these matters will not have a material adverse effect on the
Company's financial position or results of operations. The Company cannot
provide assurance, however, that damages that result in a material adverse
effect on the Company's financial position or results of operations will not be
imposed in these matters.

(7)  SUBSEQUENT EVENTS

     On July 6, 1999, the Company's wholly owned subsidiary goracing.com, inc.
filed a registration statement with the Securities and Exchange Commission for
an initial public offering of its Class A common stock. goracing.com, inc. plans
to raise approximately $80.0 million in the offering and to use the proceeds to
(i) promote the goracing network and expand sales and marketing activities; (ii)
add online content, community features, and e-commerce opportunities to its
network; (iii) hire management and other personnel; (iv) enhance its technology,
software, and infrastructure; (v) enter into strategic alliances and
acquisitions; (vi) repay to the Company $2.0 million of certain incurred costs;
and (vii) provide working capital. The Company will continue to own more than
80% of the shares of goracing.com, inc. after the offering.


                                       6
<PAGE>   7
ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

OVERVIEW

     The Company designs and markets licensed motorsports products, including
die-cast scaled replicas of motorsports vehicles, apparel, and souvenirs. The
Company also develops promotional programs for sponsors of motorsports that
feature the Company's die-cast replicas or other products and that are intended
to increase brand awareness of the products or services of the corporate
sponsors. In addition, the Company represents popular race car drivers in a
broad range of licensing and other revenue producing opportunities, including
product licenses, corporate sponsorships, endorsement contracts, and speaking
engagements. Third parties manufacture all of the Company's motorsports
collectibles and most of the Company's apparel and souvenirs, generally
utilizing the Company's designs, tools, and dies. The Company screen prints and
embroiders a portion of the licensed motorsports apparel that it sells.

     The Company was incorporated in Arizona in May 1992 and began marketing
die-cast collectibles in July 1992. During fiscal 1997, fiscal 1998, and the
first two quarters of fiscal 1999, the Company completed a number of
acquisitions that expanded the Company's product offerings and distribution
channels and secured a number of exclusive license agreements with race car
drivers and team owners. The following table sets forth the acquisitions
completed since October 1, 1996 and the nature of the businesses acquired.

<TABLE>
<CAPTION>
              Acquisitions                          Date                          Business
-------------------------------------------        ------         --------------------------------------------
<S>                                                <C>            <C>
Sports Image, Inc.                                 Nov-96         Markets and distributes licensed motorsports
                                                                  apparel and souvenirs; trackside sales

Motorsport Traditions Limited Partnership          Jan-97         Markets and distributes licensed motorsports
and Creative Marketing and Promotions, Inc.                       apparel and souvenirs; trackside sales

Robert Yates Promotions, Inc.                      Jul-97         Markets and distributes licensed motorsports
                                                                  apparel and souvenirs; trackside sales

Image Works, Inc.                                  Jul-97         Manufactures and markets licensed motorsports
                                                                  apparel through mass-merchandise markets

Motorsports collectibles product lines of          Aug-97         Manufactures and markets licensed "mini-
Simpson Products, Inc.                                            helmets" and other motorsports collectibles and
                                                                  souvenirs

Assets related to sales of merchandise             Dec-97         Markets and distributes licensed motorsports
licensed by NASCAR driver                                         apparel and souvenirs; trackside sales
Rusty Wallace (the "Rusty Wallace
Acquisition")

Assets related to motorsports die-cast             Dec-97         Manufactures and markets "Revell" licensed
collectibles product lines of Revell-                             die-cast collectibles; strategic alliance with
Monogram, Inc. (the "Revell Acquisition")                         Revell-Monogram, Inc. involving extensive
                                                                  product licensing and distribution arrangements

Brookfield Collectors Guild, Inc.                  Jan-98         Markets and distributes licensed motorsports
("Brookfield")                                                    collectibles and ensembles

Chase Racewear, L.L.C. ("Chase")                   May-98         Licensed motorsports apparel and accessories

Paul's Model Art/MiniChamps                        Aug-98         Markets and distributes die-cast replicas of
("MiniChamps")                                                    Formula One and GT race cars, as well as factory
                                                                  production cars, driver figurines, and other
                                                                  motorsport collectibles

Performance Plus Nutritional, L.L.C.               Sep-98         Develops and markets driver-endorsed
                                                                  nutritional products, including vitamins, energy
                                                                  bars, and energy drinks

Intellectual Properties Group, Inc. ("IPG")        Oct-98         Creates and develops promotional programs for
                                                                  corporate sponsors of motorsports

Tech 2000 Worldwide, Inc. ("Tech 2000")            Nov-98         Operates the "goracing.com" internet website;
                                                                  designs, develops, implements, and maintains
                                                                  motorsports-related and other internet websites,
                                                                  including electronic commerce capabilities

Goodsports Holdings Pty Ltd. ("Goodsports")        Jan-99         Markets and distributes licensed Formula
                                                                  One apparel and related products
</TABLE>


                                       7
<PAGE>   8
     The Company markets its products to approximately 11,500 specialty
retailers throughout the world either directly or through its wholesale
distributor network; to motorsports enthusiasts directly through its Racing
Collectables Clubs of America (the "Collectors' Club"), which currently has
approximately 166,000 members; via electronic commerce through its
"goracing.com" web site; and through mobile trackside souvenir stores,
promotional programs for corporate sponsors, and fan clubs. The Company also
distributes certain of its products to mass retailers through its in-house sales
force and wholesale distributors. In addition, the Company has a license
agreement with Hasbro, Inc. ("Hasbro"), a multi-billion dollar toy and game
manufacturer, covering the exclusive sale by Hasbro of a line of
motorsports-related products in the mass-merchandise market. In July 1999, the
company's goracing.com, inc. subsidiary filed a registration statement for an
initial public offering of its Class A common stock. goracing.com, inc. plans to
use the proceeds of the offering to expand its Internet network and e-commerce
sales. See "Liquidity and Capital Resources."

RESULTS OF OPERATIONS

    The following table sets forth, for the periods indicated, the percentage of
total revenue represented by certain expense and revenue items.

<TABLE>
<CAPTION>
                                                             Three Months Ended              Nine Months Ended
                                                                  June 30                         June 30
                                                        ---------------------------     ----------------------------
                                                            1999           1998            1999             1998
                                                        -----------     -----------     -----------      -----------
                                                        (Unaudited)     (Unaudited)     (Unaudited)      (Unaudited)
<S>                                                     <C>              <C>            <C>               <C>
Sales:
     Collectibles ..............................            62.8%           55.8%           61.9%           53.3%
     Apparel and souvenirs .....................            35.0            43.1            35.7            45.5
     Other .....................................             2.2             1.1             2.4             1.2
                                                        -----------     -----------     -----------      -----------
        Net sales ..............................           100.0           100.0           100.0           100.0
Cost of sales ..................................            59.8            61.5            61.7            62.5
                                                        -----------     -----------     -----------      -----------
Gross Profit ...................................            40.2            38.5            38.3            37.5
Selling, general and administrative expenses ...            18.0            17.2            19.4            18.6
Settlement costs ...............................              --              --              --             0.5
Amortization of goodwill and other intangibles .             1.6             1.7             1.8             1.7
                                                        -----------     -----------     -----------      -----------
Income from operations .........................            20.6            19.6            17.1            16.7
Interest income (expense) and other, net .......            (1.0)           (0.9)           (1.4)           (1.0)
                                                        -----------     -----------     -----------      -----------
Income before income taxes and minority interest            19.6            18.7            15.7            15.7
Minority interest in earnings ..................            (0.6)           (0.1)           (0.5)           (0.1)
Provision for income taxes .....................            (7.6)           (7.5)           (6.1)           (6.2)
                                                        -----------     -----------     -----------      -----------
Net income .....................................            11.4%           11.1%            9.1%            9.4%
                                                        ===========     ===========     ===========      ===========
</TABLE>

THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998

     Net sales increased 32.2% to $101.5 million for the three months ended
June 30, 1999 from $76.8 million for the three months ended June 30, 1998. The
Company attributes the improvement in sales during the third quarter of fiscal
1999 primarily to (i) revenue from the Company's acquisitions during the third
and fourth quarter of fiscal 1998 and the first two quarters of fiscal 1999;
(ii) the Company's ability to capitalize on the continued strong growth in the
base of motorsports enthusiasts and to produce and sell increased quantities of
die-cast collectible goods, apparel, and souvenirs; (iii) sales of the Company's
products via its e-commerce solution, "Speedmall," which commenced operations on
the Company's "goracing.com" internet web site in February 1999; and (iv) an
increase in membership in the Collectors' Club to approximately 166,000 members
at June 30, 1999 from approximately 138,000 members at June 30, 1998.

     Gross profit increased to $40.8 million in the third quarter of fiscal
1999 from $29.5 million in the third quarter of fiscal 1998, representing 40.2%
and 38.5% of net sales, respectively. The increase in gross profit as a
percentage of net sales resulted from increased sales of die-cast collectible
products, which typically provide higher margins than sales of the Company's
apparel and souvenir products.

     Selling, general and administrative expenses increased to $18.3 million
in the three-month period ended June 30, 1999 from $13.2 million in the
three-month period ended June 30, 1998, representing 18.0% and 17.2% of net
sales, respectively. The increase in such expenses as a percentage of sales
resulted primarily from costs associated with the operation and development of
the Company's "goracing.com" web site.

                                       8
<PAGE>   9
      Amortization of goodwill and other intangibles increased to $1.6 million
for the three-month period ended June 30, 1999 from $1.3 million for the
three-month period ended June 30, 1998. The increase in amortization of goodwill
and other intangibles is related to the acquisitions made during the second,
third, and fourth quarters of fiscal 1998 and the second quarter of fiscal 1999,
as well as various long-term license agreements. The Company recorded goodwill
and other intangibles of $34.5 million in connection with the acquisitions
completed during the second, third, and fourth quarters of fiscal 1998 and the
second quarter of fiscal 1999. The Company recorded an additional $1.4 million
in other intangibles during the third quarter of fiscal 1999 in connection with
long-term license and endorsement agreements. The Company is amortizing the
goodwill and other intangibles over periods of 3 to 25 years.

      The change in interest income (expense) and other, net, was primarily
attributable to a decrease in interest income earned on the remaining proceeds
from the convertible subordinated notes issued in March 1998.

NINE MONTHS ENDED JUNE 30, 1999 COMPARED WITH NINE MONTHS ENDED JUNE 30, 1998

      Net sales increased 45.8% to $252.0 million for the nine months ended
June 30, 1999 from $172.9 million for the nine months ended June 30, 1998. The
Company attributes the improvements in sales during the first three quarters of
fiscal 1999 primarily to (i) revenue from the acquisitions completed during
fiscal 1998 and the first six months of fiscal 1999; (ii) the Company's ability
to capitalize on the continued strong growth in the base of motorsports
enthusiasts and to produce and sell increased quantities of die-cast collectible
goods, apparel, and souvenirs; (iii) sales of the Company's products via its
e-commerce solution, "Speedmall," which commenced operations on the Company's
"goracing.com" internet web site in February 1999; and (iv) an increase in
membership in the Company's Collectors' Club to approximately 166,000 members at
June 30, 1999 from approximately 138,000 members at June 30, 1998.

      Gross profit increased to $96.6 million in the nine months ended June
30, 1999 from $64.7 million in the nine months ended June 30, 1998, representing
38.3% and 37.5% of net sales, respectively. The increase in gross profit as a
percentage of net sales resulted from increased sales of die-cast collectible
products, which typically provide higher margins than sales of the Company's
apparel and souvenir products. Sales of die-cast collectibles grew to 61.9% of
net sales in the nine months ended June 30, 1999 from 53.3% for the nine-month
period ended June 30, 1998.

      Selling, general and administrative expenses increased to $49.0 million
in the nine-month period ended June 30, 1999 from $32.0 million in the
nine-month period ended June 30, 1998, representing 19.4% and 18.6% of net
sales, respectively. The increase in such expenses as a percentage of sales
resulted primarily from the operation and development of the Company's
e-commerce line of business through "Speedmall" at the "goracing. com" web site
and costs associated with cross promotional programs completed during the first
quarter of fiscal 1999.

      During the nine-month period ended June 30, 1998, the Company recorded
a non-recurring charge of $950,000, or $0.03 per share, for the settlement of a
pending lawsuit and related charges. This settlement represented 0.5% of net
sales for the nine months ended June 30, 1998. There were no non-recurring
charges in the nine-month period ended June 30, 1999.

      Amortization of goodwill and other intangibles increased to $4.6 million
for the nine-month period ended June 30, 1999 from $3.0 million for the
nine-month period ended June 30, 1998. The increase in amortization of goodwill
and other intangibles is related to the acquisitions made during the second,
third, and fourth quarters of fiscal 1998 and the first two quarters of fiscal
1999 as well as various long-term license agreements. The Company recorded
goodwill and other intangibles of $34.5 million in connection with acquisitions
completed during the second, third, and fourth quarters of fiscal 1998 and the
second quarter of fiscal 1999. The Company recorded an additional $1.4 million
in other intangibles during the third quarter of fiscal 1999 in connection with
long-term license and endorsement agreements. The Company is amortizing the
goodwill and other intangibles over periods of 3 to 25 years.


                                       9
<PAGE>   10
      The change in interest income (expense) and other, net, was primarily
attributable to an increase in interest expense associated with the convertible
subordinated notes issued in March 1998, which was partially offset by interest
income on the remaining proceeds from the offering.

PRO FORMA RESULTS OF OPERATIONS

      The following table sets forth the unaudited pro forma income statement
data of the Company for the nine-month period ended June 30, 1999 and 1998,
giving effect to the Rusty Wallace Acquisition and the Revell Acquisition, as
well as the acquisitions of Brookfield, Chase, MiniChamps, IPG, Tech 2000, and
Goodsports, as if they had occurred on October 1, 1997, using the purchase
method of accounting for business combinations, except for IPG and Tech 2000,
which were accounted for as poolings of interest. The unaudited pro forma income
statement data presented herein does not purport to represent what the Company's
actual results of operations would have been had those acquisitions occurred on
that date or to project the Company's results of operations for any future
period.

<TABLE>
<CAPTION>
                                        (in thousands, except per share data)
                                              For the Nine Months Ended
                                        -------------------------------------
                                          June 30, 1999        June 30, 1998
                                          -------------        -------------
                                           (Unaudited)          (Unaudited)
<S>                                       <C>                  <C>
Net sales ..........................         $255,081            $198,373

Net income .........................           22,511              16,385(1)

Net income per common share, diluted         $   1.30(2)         $   0.98(1)
</TABLE>

     (1)Excludes a non-recurring legal settlement charge of $950,000 or $0.03
        per share

     (2)Includes the dilutive effect of the Company's convertible subordinated
        notes

     The pro forma results shown above do not account for efficiencies
gained upon the consolidation of operations, including the elimination of
duplicative functions and reduction of salaries expense and other related costs.
The pro forma results of operations for the nine-month periods ended June 30,
1999 and 1998 reflect the amortization of goodwill and other intangibles arising
from the acquisitions described above and include additional interest expense
associated with any financing related to the acquisitions.

SEASONALITY

     Because the auto racing season is concentrated between the months of
February and November, the second and third calendar quarters of each year (the
Company's third and fourth fiscal quarters) generally are characterized by
higher sales of motorsports products. The Company believes, however, that the
acquisitions described above have provided additional distribution channels that
increase holiday sales, with the effect of reducing seasonal fluctuations.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital position increased to $102.5 million at
June 30, 1999 from $86.9 million at September 30, 1998. The increase of $15.6
million is primarily attributable to cash flow from operations.

     Capital expenditures for the nine-month period ended June 30, 1999
totaled approximately $19.2 million, of which approximately $11.2 million was
utilized for the Company's continued investment in tooling.

     During the nine-month period ended June 30, 1999, the Company issued
328,591 shares of Common Stock upon the exercise of stock options, resulting in
total proceeds to the Company of approximately $3.8 million.

     On January 2, 1997, the Company issued an aggregate of $20.0 million
principal amount of senior notes to three insurance companies (the "Senior
Notes"). The Senior Notes bore interest at the rate of 8.05% per annum, and
matured on January 2, 1999. On January 4, 1999, the Company repaid the Senior
Notes.


                                       10
<PAGE>   11
     On March 24, 1998, the Company sold $100.0 million of 4 -3/4%
Convertible Subordinated Notes due 2005 (the "Notes"). The Notes are
convertible, at the option of the holders, into shares of Common Stock at the
initial conversion price of $48.20 per share, subject to adjustments in certain
events. Interest on the Notes is payable semi-annually on April 1 and October 1
of each year, beginning October 1, 1998. The Notes mature on April 1, 2005. The
Notes are general unsecured obligations of the Company, subordinated in right of
payment to all existing and future senior indebtedness of the Company, as
defined in the Notes. The Indenture governing the Notes does not limit or
prohibit the incurrence of additional indebtedness, including senior
indebtedness, by the Company or its subsidiaries. The Company, at its option,
may redeem the Notes in whole or in part at any time on or after April 1, 2001,
at redemption prices set forth in the Indenture governing the Notes. Upon the
occurrence of a "change in control" or a "termination of trading," as defined in
the Indenture, the holders of the Notes will have the right to require the
Company to repurchase all or any part of such holders' Notes at 100% of their
principal amount, plus accrued and unpaid interest. The net proceeds to the
Company from the offering were approximately $96.5 million, after deducting
offering expenses and the Initial Purchasers' discount of 3.0%.

     On August 5, 1998, the Company entered into an amended and restated
credit agreement (the "Credit Facility") with First Union National Bank of North
Carolina ("First Union"). The Credit Facility consists of a revolving line of
credit for up to $20.0 million, which includes up to $5.0 million for standby
letters of credit (the "Line of Credit") and a $30.0 million letter of
credit/bankers' acceptance facility (the "Letter of Credit/BA Facility"). The
Company did not have any outstanding borrowings under the Line of Credit as of
June 30, 1999. The Company had outstanding purchase commitments of approximately
$8.8 million under the Letter of Credit/BA Facility as of June 30, 1999. The
Line of Credit bears interest, at the Company's option, at a rate equal to (i)
the Alternate Base Rate (as described below) plus an applicable margin as
defined in the credit agreement or (ii) LIBOR plus an applicable margin as
defined in the credit agreement. The "Alternate Base Rate" under the Line of
Credit is the greater of (a) the bank's publicly announced prime rate or (b) the
Federal Funds Effective Rate (as defined) plus 0.5%. The Line of Credit matures
on April 1, 2001 with respect to the revolving line of credit portion of the
Line of Credit, and on April 1, 2000 with respect to the standby letter of
credit portion of the Line of Credit and the Letter of Credit/BA Facility,
subject to extensions by First Union. The Credit Facility is guaranteed by
certain of the Company's subsidiaries.

     On October 27, 1998, the Company acquired all of the outstanding stock
of IPG in exchange of 35,000 shares of the Company's restricted common stock.
IPG creates and develops promotional programs for corporate sponsors of
motorsports.

     On November 23, 1998, the Company acquired Tech 2000, a privately held
Internet company, through a merger of Tech 2000 and Action Interactive, Inc., a
wholly owned subsidiary of the Company. Under the terms of the merger agreement,
the Company issued 137,925 shares of its restricted common stock in exchange for
all of the issued and outstanding common stock of Tech 2000.

     On January 11, 1999, the Company acquired all of the outstanding stock
of Goodsports Holdings Pty. Ltd., an Australian-based marketer of Formula
One-related apparel and other merchandise. The consideration paid by the Company
consisted of the assumption of certain liabilities and contingent payments of up
to $3.6 million to be paid over a four-year period based upon the attainment of
certain performance objectives.

     On July 6, 1999, the Company's wholly owned subsidiary goracing.com,
inc. filed a registration statement with the Securities and Exchange Commission
for an initial public offering of its Class A common stock. goracing.com, inc.
plans to raise approximately $80.0 million in the offering and to use the
proceeds to (i) promote the goracing network and expand sales and marketing
activities; (ii) add online content, community features, and e-commerce
opportunities to its network; (iii) hire management and other personnel; (iv)
enhance its technology, software, and infrastructure; (v) enter into strategic
alliances and acquisitions; (vi) repay to the Company $2.0 million of certain
incurred costs; and (vii) provide working capital. The Company will continue to
own more than 80% of the shares of goracing.com, inc. after the offering.

     The Company is subject to certain asserted and unasserted claims
encountered in the normal course of business. The Company believes that the
resolution of these matters will not have a material adverse effect on the
Company's financial position or results of operations. The Company cannot
provide assurance, however, that damages that result in a material adverse
effect on the Company's financial position or results of operations will not be
imposed in these matters.


                                       11
<PAGE>   12
     The Company believes that its current cash resources, the Credit Facility,
and expected cash flows from operations will be sufficient to fund the Company's
capital needs during the next 12 months at its current level of operations,
apart from capital needs resulting from additional acquisitions. However, the
Company may be required to obtain additional capital to fund its planned growth
during the next 12 months and beyond. Potential sources of any such capital may
include the proceeds from the exercise of outstanding options, bank financing,
strategic alliances, and additional offerings of the Company's equity or debt
securities. There can be no assurance that such capital will be available from
these or other potential sources, and the lack of such capital could have a
material adverse effect on the Company's business.

YEAR 2000 COMPLIANCE

     During 1997, the Company commenced a program to install new computer
software programs that are intended to integrate the Company's management
information systems throughout its organizational structure, as well as to
comply with Year 2000 requirements. As of the filing date of this Report, the
installation program is approximately 95% complete. The Company currently is
finalizing the installation of software programs, testing those programs, and
converting existing data to the new systems. Following program installation, the
Company will test the system as a whole and train users. The Company currently
anticipates that the new software systems will be fully installed and tested in
the third quarter of calendar 1999 and intends to commence using the new system
at the beginning of the fourth calendar quarter of 1999 (the Company's first
quarter of fiscal 2000). The Company believes that its new software system will
comply with the Year 2000 requirements, and the Company currently does not
anticipate that it will experience any material disruption to its operations as
a result of the failure of any of its systems to function properly beyond
December 31, 1999.

     The Company has obtained Year 2000 compliance certificates with respect
to its telephone equipment and systems. The Company currently is finalizing
upgrades to and testing of its computer hardware and anticipates that all
testing will be completed during August 1999.

     Computer systems operated by third parties, including customers,
vendors, credit card transaction processors, and financial institutions, with
which the Company's systems interface may not continue to properly interface
with the Company's systems and may not otherwise be compliant on a timely basis
with Year 2000 requirements. The Company has requested Year 2000 compliance
certificates from its significant vendors and has received written or verbal
confirmation of Year 2000 compliance from most of its critical vendors. The
Company is in the process of contacting the remaining vendors to obtain
confirmation of Year 2000 compliance from them. The Company's third-party
manufacturers of die-cast, apparel, and other products do not rely heavily on
computer-operated systems in their manufacturing processes. Accordingly, the
Company does not believe that Year 2000 issues pose a significant risk with
respect to the manufacture of its products. Because the Company's business
typically does not generate a large volume of purchase orders for its products,
the Company believes it could rely on non-automated ordering systems if its
vendors' computer systems fail as a result of Year 2000 issues. Any failure of
the Company's computer system or the systems of third parties to timely achieve
Year 2000 compliance, however, could have a material adverse effect on the
Company's business, financial condition, and operating results.

     In the event of widespread failure of its new systems or the systems of
third parties as a result of Year 2000 issues, the Company currently believes
that it could use its existing system with minor enhancements and workarounds
on a short-term basis. As of the filing date of this Report, the Company has
not formulated any contingency plans with respect to any longer term issues
that may arise as a result of Year 2000 compliance issues, but intends to
continue to monitor its Year 2000 preparedness and to develop contingency plans
if it determines that such plans are warranted.



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This Report contains forward-looking statements, including statements
regarding the Company's business and the industry in which the Company operates.
These forward-looking statements are based primarily on the Company's
expectations and are subject to a number of risks and uncertainties, some of
which are beyond the Company's control. Actual results could differ materially
from the forward-looking statements as a result of numerous factors, including
those set forth in the Company's Form 10-K/A for the year ended September 30,
1998, as filed with the Securities and Exchange Commission.


                                       12
<PAGE>   13
PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         Not applicable

ITEM 2.  CHANGES IN SECURITIES

         Not applicable

ITEM 3.  DEFAULTS UPON SECURITIES

         Not applicable

ITEM 4.  SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable

ITEM 5.  OTHER INFORMATION

         Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)Exhibits
                  11.1     Computation of Basic Earnings Per Share
                  11.2     Computation of Diluted Earnings Per Share
                  27       Financial Data Schedule

         (b)Reports on Form 8-K

                  Not applicable.


                                       13
<PAGE>   14
                                   SIGNATURES

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

                       ACTION PERFORMANCE COMPANIES, INC.

Signature                             Capacity                       Date
---------                             --------                       ----

/s/ Fred W. Wagenhals        Chairman of the Board, President,   August 13, 1999
__________________________   and Chief Executive Officer
Fred W. Wagenhals            (Principal Executive Officer)

/s/ Christopher S. Besing    Vice President, Chief Financial     August 13, 1999
__________________________   Officer, Treasurer, and Director
Christopher S. Besing        (Principal Financial Officer)

/s/ David A. Husband         Vice President, Chief Accounting    August 13, 1999
__________________________   Officer
David A. Husband             (Principal Accounting Officer)


                                       14
<PAGE>   15
                                 EXHIBIT INDEX


Number                   Description
------                   -----------

11.1                     Computation of Basic Earnings Per Share.

11.2                     Computation of Diluted Earnings Per Share.

27                       Financial Data Schedule.


                                       15