United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the fiscal year ended September 24, 2000
                                       or
       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the transition period from ____________ to ____________

                         Commission file number 0-25866

                        PHOENIX GOLD INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                 OREGON                                93-1066325
      (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)             Identification Number)

        9300 NORTH DECATUR STREET, PORTLAND, OREGON        97203
         (Address of principal executive offices)        (Zip code)

                                 (503) 286-9300
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:  None

Securities  registered  pursuant to  Section 12(g) of the  Exchange Act:  Common
Stock, no par value

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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

The  aggregate  market value of the common stock held by  non-affiliates  of the
registrant was $837,405 as of November 30, 2000.

There were 3,026,945 shares of the registrant's  common stock  outstanding as of
November 30, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

Parts of registrant's proxy statement dated on or about January 5, 2001 prepared
in connection with the annual meeting of shareholders to be held on February 13,
2001 are incorporated by reference into Part III of this report.


                                       1
<PAGE>


                                TABLE OF CONTENTS


                                    PART I


                                                                           PAGE
                                                                           ----

ITEM 1.    BUSINESS                                                         3

ITEM 2.    PROPERTIES                                                       8

ITEM 3.    LEGAL PROCEEDINGS                                                8

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS              8


                                    PART II


ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
           MATTERS                                                          9

ITEM 6.    SELECTED FINANCIAL DATA                                         10

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS                                       10

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      13

ITEM 8.    FINACIAL STATEMENTS AND SUPPLEMENTARY DATA                      13

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE                                        13


                                    PART III


ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT              14

ITEM 11.   EXECUTIVE COMPENSATION                                          14

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  14

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  14


                                    PART IV


ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
           ON FORM 8-K                                                     15


                                       2
<PAGE>


                                     PART I

ALL  STATEMENTS IN THIS REPORT THAT ARE NOT  STATEMENTS  OF  HISTORICAL  RESULTS
SHOULD BE  CONSIDERED  "FORWARD-LOOKING  STATEMENTS"  WITHIN THE  MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, WITHOUT LIMITATION,
STATEMENTS AS TO EXPECTATIONS, BELIEFS AND FUTURE FINANCIAL PERFORMANCE, AND ARE
BASED ON CURRENT  EXPECTATIONS  AND ARE  SUBJECT TO  CERTAIN  RISKS,  TRENDS AND
UNCERTAINTIES  THAT COULD  CAUSE  ACTUAL  RESULTS TO VARY FROM THOSE  PROJECTED,
WHICH  VARIANCES MAY HAVE A MATERIAL  ADVERSE  EFFECT ON THE COMPANY.  AMONG THE
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER  MATERIALLY ARE THE FOLLOWING:
COMPETITIVE   FACTORS;   POTENTIAL   FLUCTUATIONS   IN  QUARTERLY   RESULTS  AND
SEASONALITY;  THE ADVERSE  EFFECT OF REDUCED  DISCRETIONARY  CONSUMER  SPENDING;
DEPENDENCE  ON A  SIGNIFICANT  CUSTOMER;  THE NEED FOR THE  INTRODUCTION  OF NEW
PRODUCTS AND PRODUCT ENHANCEMENTS;  DEPENDENCE ON SUPPLIERS;  CONTROL BY CURRENT
SHAREHOLDERS; HIGH INVENTORY REQUIREMENTS;  BUSINESS CONDITIONS IN INTERNATIONAL
MARKETS;  THE  COMPANY'S  DEPENDENCE  ON KEY  EMPLOYEES;  THE  NEED  TO  PROTECT
INTELLECTUAL PROPERTY; ENVIRONMENTAL REGULATION; AND, THE POTENTIAL DELISTING OF
THE COMPANY'S COMMON STOCK AS WELL AS OTHER FACTORS DISCUSSED IN EXHIBIT 99.1 TO
THE PHOENIX GOLD  INTERNATIONAL,  INC. ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED SEPTEMBER 24, 2000 WHICH IS HEREBY  INCORPORATED BY REFERENCE.  GIVEN
THESE  UNCERTAINTIES,  READERS ARE CAUTIONED NOT TO PLACE UNDUE  RELIANCE ON THE
FORWARD-LOOKING   STATEMENTS.   THE  COMPANY  DOES  NOT  INTEND  TO  UPDATE  ITS
FORWARD-LOOKING STATEMENTS.

ITEM 1.  BUSINESS

    Phoenix Gold International,  Inc. (the "Company") designs, markets and sells
innovative,  high  quality and high  performance  electronics,  accessories  and
speakers  to the audio  market.  The  Company's  products  are used in car audio
aftermarket,   professional  sound  and  custom  audio/video  and  home  theater
applications.  The Company manufactures substantially all of its electronics and
a portion of its  accessories at its facility in Portland,  Oregon.  The Company
was incorporated in Oregon in 1991.

    The  Company's  car  audio  products  encompass  substantially  all  of  the
components  used in car audio  systems  (other than "head units" such as radios,
tape  decks  and CD  players).  The  Company's  car  audio  electronics  include
amplifiers,  equalizers,  crossovers  and line drivers.  The Company's car audio
accessories include audio cables, speaker and power cables, connectors,  clamps,
capacitors and fuseblocks.  The Company's  speaker products include  subwoofers,
midranges, tweeters, coaxials and speaker component systems.

    As the Company  expanded  its car audio  product  line from  accessories  to
electronics  and  speakers,  it  initially  targeted car audio  enthusiasts  and
audiophiles with products that offer value by combining  performance  advantages
with distinctive appearance and superior craftsmanship. The Company subsequently
broadened   its  car   audio   product   line  to  offer   similar   performance
characteristics  at lower price points.  The Company's  primary target market is
car  audio  enthusiasts,  typically  18 to 34 year old  males  who  desire  high
quality, high performance systems. The Company also sells to other consumers who
seek to increase  the  quality of their car audio  systems  either by  upgrading
existing  components  or  installing  new systems.  The Company also designs and
sells accessories and speakers to OEM customers.

    In  November 1995,  the Company acquired  substantially  all  of  the assets
of  the professional  sound  division of  Carver  Corporation.  The Company,  as
licensee of the name "Carver Professional,"  designs,  manufactures, markets and
sells electronic amplifiers and accessories for professional sound applications,
including OEM customers.


                                       3
<PAGE>


PRODUCTS

    The Company has three product lines: electronics, accessories and  speakers.
The Company's sales by product class are as follows:

                                          YEAR ENDED SEPTEMBER 30,
                               ------------------------------------------------
                                   2000             1999             1998
                               --------------   --------------   --------------
    Product class:
       Electronics                     55.6%            52.8%            52.3%
       Accessories                     28.4             30.7             35.7
       Other (1)                       16.0             16.5             12.0
                               --------------   --------------   --------------
        Total                         100.0%           100.0%           100.0%
                               ==============   ==============   ==============

     (1) Includes  speakers and other products of which no single product class
     accounted for more than 15% of sales in any one year.

    ELECTRONICS.   The  Company's  amplifiers,   signal  processors  and   other
electronics  are designed to deliver sonic  excellence,  system  flexibility and
reliable  performance.  The Company  sells car audio  electronics  designed  for
audiophiles, serious audio enthusiasts and sound competitors.

    AMPLIFIERS.  The  Company  sells a total of 22 car audio  amplifiers  in the
ZEROpoint  ZXti,  ZPA,  ZX,  XS and QX  series at  retail  prices  ranging  from
approximately  $150 to $1,880.  Amplifiers  in the  ZEROpoint  ZXti,  ZPA and ZX
series,   introduced  between  1996  and  1999,  are  the  Company's   reference
amplifiers,  designed to deliver  maximum  performance  in  expensive,  high-end
systems capable of driving multiple speakers. The XS series, introduced in 1997,
includes  multi-channel  amplifiers with built-in crossovers and offers at lower
prices the performance and sonic excellence of the reference series  amplifiers,
except in the most demanding applications. The QX series, introduced in 1997, is
designed to provide high  performance at even lower prices.  The QX amplifier is
the first of the Company's electronics products to be designed and engineered by
the Company and manufactured by a third party vendor. Due to the introduction of
the  ZEROpoint  ZXti series in 1999,  the Company does not expect the ZPA and ZX
series to provide meaningful revenue in the future.

    Additionally,  the Company has periodically introduced limited edition theme
amplifiers, such as "Frank Amp'n Stein," "Son of Frank Amp'n Stein," "Route 66,"
"Outlaw 1845" and "Bandit  1895".  The "Reactor" was  introduced in 1998 and the
"Octane" was introduced in 2000. Retail prices range from  approximately $500 to
$2,500.

    The Company  sells a total of 18 Carver  Professional  amplifiers in the PM,
PT, CA, PX and PXm series at retail prices  ranging from  approximately  $535 to
$2,780. The PM series was designed for multiple purposes,  including  instrument
amplification,  fixed installations and touring applications.  The PT series was
designed   specifically   for  the   touring   sound   industry   for   ease  of
transportability and use in a variety of settings. The CA series amplifiers were
designed for fixed installation applications, including churches, warehouses and
auditoriums.  The PX series, introduced in 1997 and the first series designed by
the Company, includes multi-application models that offer increased features and
power at lower price points.  The PXm series,  introduced in 1998 and the second
series designed by the Company,  expands the PX series and addresses entry level
price points and greater ease of  transportability.  The Company will  introduce
the CV series of professional  amplifiers in 2001 and expects the CA series will
not provide meaningful revenue in the future.


                                       4
<PAGE>


    SIGNAL  PROCESSORS.  The  Company  sells  a  total  of 14 car  audio  signal
processors,   including  equalizers,   line  drivers,  and  active  and  passive
crossovers.  Signal processors, which are sold both as upgrade components and as
parts of complete systems,  are used to increase the flexibility and performance
of audio systems.  Retail prices of signal  processors range from  approximately
$110 to $700.

    ACCESSORIES.  The Company  manufacturers  and distributes  innovative,  high
quality accessories. The Company sells over 1,000 accessories, many of which are
manufactured to the Company's  design  specifications,  for use primarily in car
audio  aftermarket  applications.  Car audio  accessories  include audio cables,
speaker and power cables, connectors, clamps, adapters, capacitors,  fuseblocks,
distribution blocks,  alternators,  carpet, textiles and adhesives.  The Company
continually  improves  its  existing  accessories  line and  introduces  new and
replacement  accessories.  The Company is a single source from which its dealers
and distributors can purchase all of the accessories necessary to install a full
range of car audio systems. Accessories are available either as individual items
or combined in pre-packaged installation kits.

    The  Company's   accessories  for  use  in  professional  sound  and  custom
audio/video  and home  theater  applications  include  crossovers,  attenuators,
transformers, speaker selectors, audio and video cables, connectors, wall plates
and volume controls.  The Company manufactures Smart Audio Management panels for
the custom home  audio/video  market that provide for speaker  distribution  and
impedance matching.

    SPEAKERS.  The Company began selling  speakers in 1994. The Company offers a
total  of 42 car  audio  speakers  in the  XMAX,  XS  and QX  series,  including
tweeters, midranges, subwoofers, coaxials and component systems. The XMAX series
features  reproduction  of tight,  accurate  bass in a small  enclosure.  The XS
series features exceptional musicality, excursion and versatility at lower price
points.  The QX series,  introduced in 1998, is the Company's lowest price point
speaker line. Retail prices of speakers range from approximately $40 to $340.

SALES, MARKETING AND DISTRIBUTION

    The Company sells its products  through car audio and  specialty  retailers,
principally in the United  States,  Canada,  Central and South America,  Europe,
Japan,  Southeast  Asia,  Australia and New Zealand.  In the United States,  the
Company sells its car audio,  professional sound and home audio products through
independent  sales  representatives  and  distributors.  The  Company  sells its
products   internationally  through  distributors  serving  over  40  countries.
International  sales accounted for 25.8%, 27.1% and 32.4% of net sales in fiscal
years 2000, 1999 and 1998, respectively.  International sales are denominated in
United States dollars and are generally shipped f.o.b. the Company's facility in
Portland, Oregon.

    One  customer,  Bose  Corporation  ("Bose"),  accounted  for  10.8%  of  the
Company's net sales during the year ended September 30, 2000. No single customer
accounted  for 10% or more of the  Company's  net sales  during  fiscal 1999 and
1998.  As of September 30, 2000 and 1999,  one customer  accounted for 22.2% and
15.0% of total accounts receivable.

    The Company  had  significant sales  of  professional sound  amplifiers  and
other  electronics  to Bose  during  the  year ended  September  30,  2000.  The
Company entered  into its present  purchase  agreement  with Bose  in 1997 which
does  not   contain  minimum  or  scheduled  purchase  requirements.  Therefore,
purchase orders by Bose may fluctuate significantly from quarter to quarter over
the  term of  the agreement.  The purchase  agreement  was  extended  beyond its


                                       5
<PAGE>


scheduled  expiration date of December 31, 1999 to March 31, 2001.  The  Company
and Bose are  currently negotiating  a new purchase  agreement. There can be  no
assurance that the Company will be able to negotiate a purchase  agreement  with
Bose  on acceptable  terms. The loss  of Bose as a customer or  any  significant
portion of  Bose orders could  have a  material adverse effect on  the Company's
business,  results of operations and financial condition.

    The Company  offers its dealers and  distributors  complete  product  lines,
excellent service and support,  and high  performance,  reliable  products.  The
Company believes these efforts enable it to attract and retain qualified dealers
and  distributors.  The Company  recruits  on a selective  basis new dealers and
distributors for each of its product lines in specific geographic areas. Dealers
and distributors are chosen based on location,  financial  stability,  technical
expertise, sales history,  integrity, and installation and service capabilities.
The Company generally does not have written  agreements with its car audio sales
representatives, dealers or distributors or its professional sound distributors.
The Company's written agreements with its professional sound representatives and
dealers are generally terminable upon no more than 30 days notice.

    The Company  markets its car audio  products  by  participating  in consumer
electronics  trade  shows  and  enthusiast  events  and  by  promoting  its  own
demonstration  vehicles.  The Company  offers  incentives to "Team Phoenix Gold"
competitors  in  regional,  national  and  international  car  audio  shows  and
competitions  and  provides  technical  assistance,  training  and support  from
Company  engineers  and  technicians  at "Tweek N Tune"  workshops.  The Company
advertises in car audio  consumer  magazines and its products have been reviewed
and profiled in national and international publications. The Company markets its
professional   sound,   custom   audio/video   and  home  theater   products  by
participating in trade shows,  advertising in trade journals and magazines,  and
providing dealer support.

    Historically  the Company's  sales have been greater during the third (April
through  June) and fourth (July  through  September)  quarters of the  Company's
fiscal year than during the first two fiscal quarters. Due to the seasonality of
its business, the Company's quarterly results of operations will not necessarily
be indicative of its results of  operations  for the year.  The Company has only
minimal  backlog  because  orders are typically  filled  within  several days of
receipt.  Backlog as of any particular  date is not a reliable  measure of sales
for any future period  because  orders  constituting  the Company's  backlog are
subject to changes in delivery schedules or to cancellation at the option of the
purchaser without penalty.

COMPETITION

    The  markets for  the Company's   products  are highly competitive  and  are
served by many  United  States  and  international  manufacturers   that  market
their own lines  of  electronics,  accessories  and speakers  through  specialty
dealer networks  and mass  merchandise  retail  stores,  as  well  as  companies
that  market generic  products  through  the  same  distribution  channels.  The
Company's  principal accessories competitors include Esoteric Audio USA Group of
Companies,  Lightning  Audio,  Inc.,   a  subsidiary  of  Rockford   Corporation
("Rockford"),  Monster Cable  Products,  Inc. and  Recoton  Corp. The  Company's
principal  car  audio  electronics  competitors include MTX Corporation ("MTX"),
Orion Industries, Inc., Precision Power, Inc., Rockford  Fosgate, a  division of
Rockford, and Stillwater Design and Audio,  Inc.  ("Stillwater").  The Company's
principal   professional  sound  competitors  include  Crest  Audio, Inc., Crown
International,  Inc.  and QSC   Audio  Products,  Inc.  The  Company's principal
speaker   competitors  include  Boston Acoustics, Inc., JL Audio, Inc., MB Quart
Electronics USA,  Inc., MTX,  Rockford  and  Stillwater. Many  competitors  have
greater   financial  and  other  resources  than   the   Company.  The   Company


                                       6
<PAGE>


competes  principally  on  the basis  of  innovation, breadth  of  product line,
quality  and  reliability   of  products,  name  recognition,  merchandising and
distribution organization, and price.

MANUFACTURING AND ASSEMBLY

    MANUFACTURED  PRODUCTS.  The Company  manufactures  substantially all of its
electronics  products  and a  portion  of its  accessories  at its  facility  in
Portland,  Oregon.  Manufacturing  processes  include  laser-cutting,   computer
controlled metal fabrication,  powder coating, automated insertion of components
into, and wave soldering of, circuit boards,  toroid winding,  plastic injection
molding,  silk-screening  graphics and quality control  testing.  For use in its
manufacturing activities,  the Company also purchases components manufactured by
third parties according to design  specifications  developed by the Company. The
Company  purchases  substantially  all  of its  raw  materials,  components  and
subassemblies  from  approximately 180 suppliers located primarily in the United
States  and  the  Pacific  Rim.  Certain  of  these  materials,  components  and
subassemblies  are  obtained  from a single  supplier  or a  limited  number  of
suppliers.  The  Company's  principal  supplier  is Team  Phoenix Co.  Ltd.,  an
unaffiliated company.

    DISTRIBUTED ACCESSORIES. The Company distributes accessories,  many of which
are manufactured to its design  specifications  by third parties.  Substantially
all distributed  accessories are subjected to quality control  procedures at the
Company's   facility  and  are  marketed   under  the  PHOENIX  GOLD  or  CARVER
PROFESSIONAL tradenames.

    DESIGNED SPEAKERS.  The Company's speakers are manufactured by third parties
in the United States and Asia  according to  acoustical  and  electrical  design
specifications  developed  by the  Company.  Speakers  are  subjected to quality
control procedures performed by the Company.

CUSTOMER SERVICE

    The Company believes two of the most important  elements in its business are
understanding  consumers  and their  preferences,  and  providing  high quality,
reliable  products.  The Company  strives to understand  the evolving  needs and
preferences   of  consumers   by   communicating   frequently   with  its  sales
representatives,  dealers  and  distributors,  sponsoring  "Team  Phoenix  Gold"
members and attending car audio  competitions and car audio,  professional sound
and custom  audio/video  and home theater trade shows.  Company  representatives
regularly seek  suggestions  from dealers for improved design and performance of
the Company's products.

    Proper  installation  is critical to achieving  optimum  performance  of car
audio  systems.  The Company offers a three-year  limited  warranty on car audio
electronics and a one, two or three-year  limited warranty on speakers installed
by an authorized dealer or installer.  If an authorized dealer or installer does
not install the product,  the Company offers a one-year  limited warranty on car
audio electronics and speakers.  The Company offers a five-year limited warranty
on professional sound electronics.

INTELLECTUAL PROPERTY

    PHOENIX  GOLD (R), PG (Phoenix  Gold and Design)  (R),  CARVER  PROFESSIONAL
(TM), POWERFLOW (TM), QUICKSILVER (TM),  SAPPHIRE (TM)  and ZEROPOINT  (TM)  are
the principal  trademarks  of  the Company. The  Company  believes  that PHOENIX
GOLD and CARVER PROFESSIONAL  have strong  brand  name recognition, an important
competitive factor in its markets. The Company has obtained three design patents
related to its  products. Carver  Corporation  has taken the  position  that the


                                       7
<PAGE>


Company's exclusive, paid-up license to use the name CARVER PROFESSIONAL expires
at the end of November  2000.  The Company has brought  a  declaratory  judgment
action against Carver Corporation to determine future rights to the tradename.

GOVERNMENTAL APPROVAL OF PRODUCTS

    The Company is subject to and  believes  it is in  compliance  with  certain
European  Union  regulations  regarding  electromagnetic  standards  and product
safety on  substantially  all of its electronics sold in the European Union. The
Company  believes that additional  similar  regulations will be imposed in other
areas. Any inability by the Company to comply with such similar regulations on a
timely basis could have a material adverse effect on the Company.

EMPLOYEES

      As of  September  30,  2000,  the  Company  had 190  full-time  employees,
including 150 in  manufacturing,  engineering and  warehousing,  26 in sales and
marketing and 14 in administration. The Company considers its employee relations
to be good.

ITEM 2. PROPERTIES

    The Company's executive offices and manufacturing  operations are located at
9300 North Decatur Street, Portland, Oregon. The Company leases a 155,000 square
foot  building.  Approximately  12,500  square feet of office  space and 100,000
square feet of  manufacturing  and warehouse space are used by the Company.  The
Company is seeking to obtain a tenant for the  remaining  42,500  square feet of
office,  manufacturing  and warehouse space. This space was subleased to a third
party through May 2000. Annual rent for the Company's  facility is approximately
$520,800 plus an annual  escalator of 2.5%.  The lease expires on June 30, 2009.
The Company has an option to extend the lease for one ten-year term. The Company
believes  that its  existing  facilities  are adequate to meet its needs for the
foreseeable future and that, if needed, suitable additional or alternative space
will be available on commercially reasonable terms.

ITEM 3. LEGAL PROCEEDINGS

None.

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

None.










                                       8
<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The  Company's  Common  Stock  began  trading  on May 4, 1995 on The  NASDAQ
National  Market  under the symbol  "PGLD".  On October 5, 1998,  trading in the
Company's  Common  Stock was  transferred  to The  NASDAQ  SmallCap  Market.  On
November 24, 2000, The NASDAQ Stock Market,  Inc.  notified the Company that its
Common  Stock had failed to maintain a minimum  market  value of public float of
$1,000,000  over the last 30 consecutive  trading days as required for continued
listing on The NASDAQ SmallCap  Market.  The Company was provided until February
22,  2001 to regain  compliance  with this  rule or  request a hearing  with the
NASDAQ Listing Qualifications Panel.

    As reported by NASDAQ,  the following table sets forth the range of high and
low closing bid prices per share for the Company's Common Stock.

                               Fiscal year ended        Fiscal year ended
                               September 30, 2000       September 30, 1999
                               ------------------       ------------------

    Common Stock (PGLD)          High      Low           High       Low
    ----------------------     --------  --------       -------   --------

      First Quarter             $3.00    $1.938         $2.063    $1.00
      Second Quarter             3.313    2.25           4.25      1.375
      Third Quarter              2.813    2.00           2.813     1.75
      Fourth Quarter             2.375    1.875          2.938     2.125

    At November 30, 2000, the  approximate  number of  shareholders of record of
Common Stock was 134.

    The Company  has never  declared  or paid any cash  dividends  on its Common
Stock.  The Company  intends to retain all  earnings for use in its business and
therefore  does not  anticipate  paying any cash  dividends  in the  foreseeable
future.  The Company's  existing  credit  agreements  do not expressly  limit or
prohibit the Company's ability to declare and pay dividends,  although covenants
contained in such agreements related to a minimum level of tangible net worth, a
minimum ratio of current  assets to current  liabilities  and a maximum ratio of
interest bearing debt to tangible net worth may have such effect.














                                       9
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

                                           AS OF OR FOR THE YEAR ENDED SEPTEMBER 30,
                           ----------------------------------------------------------------------
                                2000          1999          1998         1997          1996
OPERATING DATA:
<S>                          <C>           <C>           <C>          <C>           <C>

Net sales                    $27,339,549   $27,538,149   $26,484,715  $27,798,728   $26,563,142
Net earnings
(loss) (1)                     1,000,611       854,129      (772,374)     410,095    (1,269,142)
Earnings (loss)
per share
    Basic                    $      0.33   $      0.26   $     (0.22) $      0.12   $     (0.37)
    Diluted                         0.33          0.26         (0.22)        0.12         (0.37)
Average  shares
outstanding
    Basic                      3,065,206     3,293,758     3,464,698    3,456,278     3,449,068
    Diluted                    3,065,206     3,293,758     3,464,698    3,535,288     3,449,068

BALANCE
SHEET DATA:
Working capital              $10,371,901   $ 9,839,492   $ 8,020,615  $ 7,278,373   $ 6,033,190
Total assets                  13,954,202    13,888,439    15,208,128   17,455,149    19,832,527
Line of credit                         -             -       900,000    3,147,936     4,278,983
Long-term
obligations                            -             -       938,233      494,927       171,995
Total
shareholders'
equity                        11,354,448    10,958,906    10,497,602   11,243,019    10,788,998

Book value
per share                    $      3.75   $      3.39   $      3.03  $      3.25   $      3.12

</TABLE>

(1) See Note 2 to  Financial  Statements  describing  non-recurring  charges for
1998.  In 1996,  the  Company  recorded  a pre-tax  charge of $1.1  million  for
in-process   research  and  development  in  connection  with  the  purchase  of
substantially  all of the assets of the  professional  sound  division of Carver
Corporation.

ITEM 7. MANAGEMENT'S DISCUSSION  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

COMPARISON OF FISCAL 2000 TO FISCAL 1999

    NET SALES.  Net sales  decreased  $199,000,  or 0.7%,  to $27.3  million for
fiscal  2000  compared to $27.5  million for fiscal  1999,  due  principally  to
decreased  international sales.  Domestic sales increased $216,000,  or 1.1%, to
$20.3  million  for fiscal  2000  compared  to $20.1  million  for fiscal  1999.
International sales decreased  $415,000,  or 5.6%, to $7,045,000 for fiscal 2000
compared to $7,460,000 for fiscal 1999.  International sales accounted for 25.8%
and 27.1% of net sales in fiscal 2000 and fiscal  1999,  respectively.  Sales of
electronics  increased 4.6% in fiscal 2000 compared to fiscal 1999. Speakers and
accessories  decreased  6.3%  and  8.0%,   respectively.   The  Company  expects
international  sales for fiscal 2001 to remain at levels lower than historically
achieved.

    GROSS  PROFIT.  Gross profit  increased to 27.7% of net sales in fiscal 2000
from 25.9% in fiscal 1999.  The increase in gross  profit was  primarily  due to
sales mix and reduced depreciation  expense which caused manufacturing  overhead
to decrease as a percentage of sales.

    OPERATING EXPENSES.  Operating expenses increased $345,000, or 6.1%, to $6.0
million  in fiscal  2000  compared  to $5.6  million in fiscal  1999.  Operating
expenses  were  21.8% and 20.4% of net sales in  fiscal  2000 and  fiscal  1999,
respectively.


                                       10
<PAGE>


    Selling  expenses  increased  $363,000,  or 10.7%, to $3.7 million in fiscal
2000  compared to $3.4 million in fiscal 1999.  Selling  expenses were 13.7% and
12.3% of net sales in fiscal 2000 and fiscal 1999, respectively. The increase in
selling  expenses was primarily due to increased  promotional,  advertising  and
trade show expenses to support sales of existing  products and the  introduction
of new products.

    General and administrative expenses were approximately level at $2.2 million
in both fiscal 2000 and fiscal 1999.  General and  administrative  expenses were
also  8.1% of net  sales in both  years.  Historically,  the  Company  has built
infrastructure  and  added  personnel  on  an  as-needed  basis,   resulting  in
occasional   increases  in  general  and   administrative   expenses   that  are
disproportionate  to increases in net sales. This policy has resulted in and may
continue to result in  variations  in general and  administrative  expenses as a
percentage of sales from period to period.

    OTHER INCOME  (EXPENSES).  Other income,  net of other  expenses,  increased
$149,000,  to  $51,000  of other  income in fiscal  2000 from  $97,000  of other
expense in fiscal 1999,  primarily as a result of increased  interest income and
decreased interest expense.  The increase in interest income was due to a higher
average balance of cash equivalents during fiscal 2000. The decrease in interest
expense was due to repayment  of all short and  long-term  borrowings  in fiscal
1999.

      NET EARNINGS.  The increase in gross profit,  increase in interest  income
and decrease in interest  expense  contributed to net earnings in fiscal 2000 of
$1.0  million,  or $0.33  per share - basic and  diluted  (based on 3.1  million
shares  outstanding),  compared to net earnings in fiscal 1999 of  $854,000,  or
$0.26 per share - basic and diluted (based on 3.3 million shares outstanding).

COMPARISON OF FISCAL 1999 TO FISCAL 1998

    NET SALES.  Net sales increased $1.1 million,  or 4.0%, to $27.5 million for
fiscal  1999  compared to $26.5  million for fiscal  1998,  due  principally  to
increased  domestic sales.  Domestic sales increased $2.2 million,  or 12.2%, to
$20.1  million  for fiscal  1999  compared  to $17.9  million  for fiscal  1998.
International sales decreased $1.1 million, or 13.0%, to $7.5 million for fiscal
1999 compared to $8.6 million for fiscal 1998. International sales accounted for
27.1% of net sales in fiscal 1999 and 32.4% of net sales in fiscal  1998.  Sales
of electronics and speakers  increased 4.9% and 44.3%,  respectively,  in fiscal
1999 compared to fiscal 1998. Sales of accessories decreased 10.8%.

    GROSS  PROFIT.  Gross profit  increased to 25.9% of net sales in fiscal 1999
from 24.7% in fiscal 1998.  The increase was  primarily  due to increased  sales
volume which decreased manufacturing overhead as a percentage of sales.

    OPERATING EXPENSES.  Operating expenses decreased $1.8 million, or 24.7%, to
$5.6 million in fiscal 1999  compared to $7.4 million in fiscal 1998.  Operating
expenses  were  20.4% and 28.1% of net sales in  fiscal  1999 and  fiscal  1998,
respectively.

    Selling  expenses  decreased  $642,000,  or 15.9%, to $3.4 million in fiscal
1999  compared to $4.0 million in fiscal 1998.  Selling  expenses were 12.3% and
15.2% of net sales in fiscal 1999 and fiscal  1998,  respectively.  The decrease
was  primarily  due  to  reduced  promotional  activities  and  sales  incentive
programs.


                                       11
<PAGE>


    General and administrative  expenses decreased  $318,000,  or 12.5%, to $2.2
million in fiscal 1999  compared  to $2.5  million in fiscal  1998.  General and
administrative  expenses  were  8.1% and 9.6% of net  sales in  fiscal  1999 and
fiscal 1998,  respectively.  The decrease in general and administrative expenses
occurred  principally  because of lower payroll and related costs as a result of
reductions in administrative personnel and decreased professional fees.

    In fiscal 1998,  the Company took  one-time,  non-recurring  charges of $1.1
million ($878,000  included in operating  expenses and $233,000 included in cost
of sales) related to the  implementation of a restructuring  plan which included
the  phase-out of a product line and actions to reduce future  operating  costs.
The  $878,000  charge  included in  operating  expenses was equal to 3.3% of net
sales in fiscal 1998.

    OTHER EXPENSES.  Other expenses, net of other income, decreased $217,000, or
69.0%, to $97,000 in fiscal 1999 from $314,000 in fiscal 1998,  primarily due to
decreased borrowings and decreased interest rates on the outstanding borrowings.

    NET  EARNINGS  (LOSS).  The  increase  in  domestic  sales and  decrease  in
operating  expenses  contributed to net earnings in fiscal 1999 of $854,000,  or
$0.26 per share - basic and diluted (based on 3.29 million shares  outstanding),
compared to a net loss of $772,000  in fiscal  1998,  or $0.22 per share - basic
and diluted (based on 3.46 million shares outstanding).

LIQUIDITY AND CAPITAL RESOURCES

    The  Company's  primary  needs for funds are for working  capital  and, to a
lesser extent, for capital expenditures.  The Company financed its operations in
fiscal 2000,  1999 and 1998  principally  from funds  generated  from  operating
activities.  Net cash provided by operating  activities in fiscal 2000, 1999 and
1998 was $1.8 million, $1.7 million and $2.3 million,  respectively.  In periods
prior to  September  30,  1999,  when cash flow  from  operations  was less than
current needs, the Company  increased the balance owing on its operating line of
credit. When cash flow exceeded current needs, the Company paid down in part the
balance  owing on its  operating  line of credit  rather than  accumulating  and
investing excess cash,  which practices  resulted in a low reported cash balance
in fiscal 1998.

    During fiscal 2000, cash and cash equivalents  increased $785,000,  accounts
receivable decreased $624,000,  inventories increased $124,000, accounts payable
decreased $278,000,  leading to an increase in working capital of $532,000. Cash
and cash  equivalents  increased as a result of cash generated  from  operations
offset in part by  purchases of Company  common stock and capital  expenditures.
Accounts  receivable  decreased  due to decreased  international  sales and as a
result of management's  continuing efforts to improve  collections.  Inventories
increased  due to  management's  efforts to increase  certain raw  material  and
finished  goods  inventories.  Accounts  payable  decreased due to the timing of
payment due dates.

    Capital  expenditures  were $377,000,  $304,000 and $343,000 in fiscal years
2000,  1999 and 1998,  respectively.  These  expenditures  related  primarily to
manufacturing automation,  the acquisition of equipment for use by the Company's
administration,    engineering   and   marketing   departments   and   leasehold
improvements.  The  Company  does not  expect  capital  expenditures  to  exceed
$500,000  in  fiscal  2001,  and there are no  outstanding  commitments  for any
capital  expenditures.  The  anticipated  expenditures  will  be  financed  from
available cash, cash provided by operations and, if necessary, proceeds from the
line of credit.


                                       12
<PAGE>


    The Board of Directors in fiscal 1999  authorized the Company to purchase up
to $1.0 million of Company common stock. The Company purchased 207,400 shares of
common stock during  fiscal 2000 at an aggregate  cost of $605,000 and purchased
230,400  shares of common  stock  during  fiscal  1999 at an  aggregate  cost of
$393,000.  The purpose of the stock  repurchase  program was to help the Company
achieve its long-term goal of enhancing shareholder value.

    During fiscal 1999, the Company  purchased its leased office,  warehouse and
manufacturing  facility for $3,132,000  from its landlord.  On the same day, the
Company sold the facility and the existing  improvements,  with a remaining  net
book value of $924,000, for a net sales price of $5,037,000, and then leased the
facility from the purchaser.  The resulting  gain of $981,000 was deferred.  The
Company  will  recognize  the deferred  gain over the  ten-year  lease term as a
reduction in rent expense.  The net cash proceeds were used to repay $990,000 in
remaining long-term obligations and generated pre-tax cash of $915,000.

    A $5.0  million  revolving  operating  line of credit is  available  through
December  31,  2000.  Interest on the  borrowings  is equal to the bank's  prime
lending rate (9.5% at September 30, 2000) or LIBOR plus 1.75%.  Borrowings under
the line of credit are limited to eligible  accounts  receivable and inventories
and certain additional  limits.  Borrowings under the line of credit are secured
by cash and cash equivalents,  accounts receivable and inventories.  The line of
credit contains covenants which require a minimum level of tangible net worth, a
minimum ratio of current  assets to current  liabilities  and a maximum ratio on
interest  bearing debt to tangible  net worth.  As of  September  30, 2000,  the
Company  was  eligible  to borrow  $5.0  million  under the line of  credit.  No
borrowings  were  outstanding  under  the line of credit  as of that  date.  The
Company expects to renew the revolving operating line of credit on similar terms
prior to December 31, 2000.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company has  assessed  its  exposure to market  risks for its  financial
instruments  and  has  determined  that  its  exposures  to such  risks  are not
material. As of September 30, 2000, the Company had cash and cash equivalents of
$1,654,000  compared to $868,000 as of September 30, 1999.  The Company  invests
its excess cash in highly liquid marketable  securities with maturities of three
months or less at date of purchase. The Company's cash equivalents are generally
commercial  paper and money  market  accounts.  The  Company  does not invest in
derivative securities.

    The Company sells its products primarily in United States dollars, therefore
its exposure to currency exchange rate fluctuations is not material. The Company
does not engage in foreign currency hedging activities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    Pages 18  through  32 of this  Annual  Report on Form 10-K are  incorporated
herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

    None.


                                       13
<PAGE>


                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    This is hereby  incorporated by reference the information under the captions
"Election  of  Directors"  and "Section  16(a)  Beneficial  Ownership  Reporting
Compliance" in the Company's  definitive Proxy Statement to be filed pursuant to
Regulation  14A,  which  Proxy  Statement  is  anticipated  to be filed with the
Securities and Exchange Commission within 120 days after the end of Registrant's
fiscal year ended September 24, 2000.

ITEM 11.   EXECUTIVE COMPENSATION

    This is hereby  incorporated by reference the information  under the caption
"Election of Directors" in the Company's  definitive Proxy Statement to be filed
pursuant to Regulation  14A,  which Proxy  Statement is  anticipated to be filed
with the  Securities  and Exchange  Commission  within 120 days after the end of
Registrant's fiscal year ended September 24, 2000.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    This is hereby  incorporated by reference the information  under the caption
"Security  Ownership  of  Certain  Beneficial  Owners  and  Management"  in  the
Company's  definitive  Proxy  Statement to be filed pursuant to Regulation  14A,
which  Proxy  Statement  is  anticipated  to be filed  with the  Securities  and
Exchange  Commission  within 120 days after the end of Registrant's  fiscal year
ended September 24, 2000.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    This is hereby  incorporated by reference the information  under the caption
"Certain  Relationships  and Related  Transactions" in the Company's  definitive
Proxy Statement to be filed pursuant to Regulation 14A, which Proxy Statement is
anticipated to be filed with the Securities and Exchange  Commission  within 120
days after the end of Registrant's fiscal year ended September 24, 2000.







                                       14
<PAGE>


                                    PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

 (a) Exhibits

     3(i)     1995 Restated  Articles of Incorporation and Articles of Amendment
              (incorporated   by  reference  to Exhibit   3(i)  to  Registration
              Statement  on  Form SB-2  effective  May 3, 1995 (Registration No.
              93-90588))

     3(i)(a)  Articles  of  Amendment  filed   April 7, 1995   (incorporated  by
              reference to Exhibit 3(i) (a) to  Registration  Statement on  Form
              SB-2 effective May 3, 1995 (Registration No. 93-90588))

     3(ii)(a) Amended Restated Bylaws  dated  December 1, 1999  (incorporated by
              reference  to  Exhibit 3  (ii) (a)  to Form 10-Q  filed  with  the
              Securities  and  Exchange  Commission  for  the   quarterly period
              ended December 26, 1999)

     4        Articles 2, 5 and 6 of Exhibit 3(i) and Article 6 of Exhibit 3(ii)
              are incorporated herein by reference

     10.1     Amended  and  Restated  1995 Stock  Option Plan  (incorporated  by
              reference  to   Appendix  A  to  the  Company's  definitive  proxy
              statement filed  with the Securities  and  Exchange Commission  on
              January 15, 1997) (1)

     10.1a    Form  of   Incentive  Stock  Option  Agreement   (incorporated  by
              reference to Exhibit  10.1(a) to  Registration  Statement on  Form
              SB-2 effective May 3, 1995 (Registration No. 93-90588)) (1)

     10.2     Form  of  Nonstatutory Stock  Option  Agreement  (incorporated  by
              reference to Exhibit  10.1(b) to  Registration  Statement  on Form
              SB-2 effective May 3, 1995 (Registration No. 93-90588)) (1)

     10.3     License Agreement between the Company and Carver Corporation dated
              as of November  20, 1995  (incorporated  by  reference to  Exhibit
              2.3 to Form 8-K filed with the Securities and Exchange  Commission
              on December 1, 1995)

     10.4     License  Agreement dated  September 30, 1993  between the  Company
              and   Intersonics   Technology   Corporation,    and    amendments
              (incorporated  by  reference   to  Exhibit  10.2 to Form  10-QSB/A
              (Amendment  No.  1)  filed   with  the  Securities  and   Exchange
              Commission for the quarterly period ended December 31, 1995) (2)

     10.5     Third Amendment to License Agreement  dated as of January 15, 1996
              between  the   Company  and  Intersonics   Technology  Corporation
              (incorporated  by  reference to Exhibit 10.3 to Form  10-QSB filed
              with the  Securities  and  Exchange  Commission  for the quarterly
              period ended March 31, 1997) (2)


                                       15
<PAGE>


     10.6     Form of Indemnity  Agreement (incorporated by reference to Exhibit
              10.6 to Registration  Statement on Form SB-2 effective May 3, 1995
              (Registration No. 93-90588))

     10.7     Nonstatutory  Stock  Option  Agreement   dated  February  18, 1997
              between  the  Company   and  Frank  G.  Magdlen  (incorporated  by
              reference  to  Exhibit  10.16  to Form  10-KSB   filed   with  the
              Securities  and Exchange  Commission  for  the fiscal  year  ended
              September 30, 1997)(1)

     10.8     Loan  Agreement  dated   December 1, 1999  between the Company and
              U.S.  Bank   National  Association  (incorporated  by reference to
              Exhibit 10.18 to Form  10-Q filed with the Securities and Exchange
              Commission for the quarterly period ended December 26, 1999)

     10.9     Promissory  Note dated   December  1, 1999 made by the  Company in
              favor  of  U.S.  Bank   National   Association   (incorporated  by
              reference to Exhibit 10.19 to  Form 10-Q filed with the Securities
              and  Exchange   Commission   for   the   quarterly   period  ended
              December 26, 1999)

     10.10    Nonstatutory  Stock  Option  Agreement   dated  February  16, 1999
              between  the  Company  and  Frank   G.  Magdlen  (incorporated  by
              reference to Exhibit 10.1 to Form  10-Q filed with the  Securities
              and  Exchange   Commission  for   the   quarterly   period   ended
              March 31, 1999)(1)

     10.11    Purchase  and Sale  Agreement   dated June 15,  1999  between  the
              Company and  6710 LLC  (incorporated by reference to Exhibit 10.23
              to  Form 10-Q filed with the  Securities  and Exchange  Commission
              for the quarterly period ended June 30, 1999)

     10.12    First   Amendment   to  Purchase    and   Sale   Agreement   dated
              June 15, 1999 between the Company and  6710 LLC  (incorporated  by
              reference to Exhibit 10.24 to Form 10-Q filed with the  Securities
              and  Exchange   Commission  for   the   quarterly   period   ended
              June 30, 1999)

     10.13    6710 LLC Commercial Lease  dated June 30, 1999 between the Company
              and 6710 LLC  (incorporated by reference  to Exhibit 10.19 to Form
              10-Q filed  with the  Securities  and Exchange  Commission for the
              quarterly period ended June 30, 1999)

     10.14    Nonstatutory  Stock  Option   Agreement  dated  February  16, 1999
              between  the  Company   and  Frank  G.  Magdlen  (incorporated  by
              reference to  Exhibit 10.1 to Form 10-Q filed with the  Securities
              and   Exchange   Commission  for   the  quarterly   period   ended
              March 31, 1999)(1)





                                       16
<PAGE>


     23.1     Consent of Deloitte & Touche LLP, Independent Auditors

     27       Financial Data Schedule

     99.1     Certain  Factors to  Consider  in Connection  with Forward-Looking
              Statements (Incorporated  by  reference  to Exhibit  99.1 to  Form
              10-K filed with the  Securities  and Exchange  Commission  for the
              year ended September 24, 2000)

 (b) Reports on Form 8-K

     None.




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

        (1)Management contract or compensatory plan or arrangement.

        (2)Certain material contained in this exhibit has been omitted and filed
           separately with the Securities and Exchange Commission pursuant to an
           application for confidential treatment under Rule  24b-2  promulgated
           under  the  Securities exchange Act of 1934, as amended.



























                                       17
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS



                                                                           Page
                                                                           ----

Independent Auditors' Report                                               19

Balance Sheets at September 30, 2000 and 1999                              20

Statements of Operations
      for the Three Years Ended September 30, 2000                         21

Statements of Shareholders' Equity
      for the Three Years Ended September 30, 2000                         22

Statements of Cash Flows
      for the Three Years Ended September 30, 2000                         23

Notes to Financial Statements                                              24























                                       18
<PAGE>


                          INDEPENDENT AUDITORS' REPORT






The Board of Directors and Shareholders
Phoenix Gold International, Inc.


We have audited the accompanying  balance sheets of Phoenix Gold  International,
Inc.  as of  September  30,  2000  and  1999,  and  the  related  statements  of
operations,  shareholders'  equity and cash flows for each of the three years in
the  period  ended  September  30,  2000.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the  financial  position of Phoenix  Gold  International,  Inc. as of
September  30,  2000 and 1999,  and the results of its  operations  and its cash
flows for each of the three years in the period ended  September  30,  2000,  in
conformity with accounting principles generally accepted in the United States of
America.




/s/ DELOITTE & TOUCHE LLP

Portland, Oregon
November 1, 2000











                                       19
<PAGE>


                       PHOENIX GOLD INTERNATIONAL, INC.
                                BALANCE SHEETS

                                                          SEPTEMBER 30,
                                                   ----------------------------
                                                       2000           1999
                                                   -------------  -------------
ASSETS

Current assets:
    Cash and cash equivalents                       $  1,653,683   $    868,458
    Accounts receivable, net                           4,170,885      4,794,799
    Inventories                                        5,744,860      5,620,835
    Prepaid expenses                                     229,049        213,677
    Deferred taxes                                       315,000        315,000
                                                   -------------  -------------
        Total current assets                          12,113,477     11,812,769

Property and equipment, net                              807,139      1,055,531
Goodwill, net                                            138,459        178,081
Deferred taxes                                           610,000        600,000
Other assets                                             285,127        242,058
                                                   -------------  -------------
        Total assets                                $ 13,954,202   $ 13,888,439
                                                   =============  =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                $    797,249   $  1,074,881
    Accrued payroll and benefits                         557,099        436,970
    Other accrued expenses                               346,318        379,782
    Income taxes payable                                  40,910         81,644
                                                   -------------  -------------
        Total current liabilities                      1,741,576      1,973,277

Deferred gain on sale of facility                        858,178        956,256

Commitments and contingencies                                  -              -

Shareholders' equity:
    Preferred stock;
        Authorized - 5,000,000 shares; none
        outstanding                                            -              -
    Common stock, no par value;
        Authorized - 20,000,000 shares
        Issued and outstanding - 3,026,945 and
        3,234,345 shares                               6,550,928      7,155,997
    Retained earnings                                  4,803,520      3,802,909
                                                   -------------  -------------
        Total shareholders' equity                    11,354,448     10,958,906
                                                   -------------  -------------

        Total liabilities and shareholders' equity  $ 13,954,202   $ 13,888,439
                                                   =============  =============




                        SEE NOTES TO FINANCIAL STATEMENTS


                                       20
<PAGE>


                        PHOENIX GOLD INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS



                                             YEAR ENDED SEPTEMBER 30,
                                    -------------------------------------------
                                        2000           1999           1998
                                    -------------  -------------  -------------


Net sales                            $ 27,339,549   $ 27,538,149   $ 26,484,715

Cost of sales                          19,779,261     20,415,267     19,950,805
                                    -------------  -------------  -------------

    Gross profit                        7,560,288      7,122,882      6,533,910


Operating expenses:
    Selling                             3,749,117      3,386,595      4,029,059
    General and administrative          2,203,780      2,221,742      2,540,064
    Non-recurring charges                       -              -        878,147
                                    -------------  -------------  -------------

        Total operating expenses        5,952,897      5,608,337      7,447,270
                                    -------------  -------------  -------------

Income (loss) from operations           1,607,391      1,514,545       (913,360)

Other income (expense):
    Interest income                        50,226          8,844              -
    Interest expense                            -       (117,821)      (323,530)
    Other income, net                         994         11,561          9,516
                                    -------------  -------------  -------------

        Total other income (expense)       51,220        (97,416)      (314,014)
                                    -------------  -------------  -------------

Earnings (loss) before income taxes     1,658,611      1,417,129     (1,227,374)

Income tax benefit (expense)             (658,000)      (563,000)       455,000
                                    -------------  -------------  -------------

Net earnings (loss)                   $ 1,000,611   $    854,129   $   (772,374)
                                    =============  =============  =============

Earnings (loss) per share:
    Basic and diluted                 $      0.33   $       0.26   $      (0.22)
                                    =============  =============  =============

Average shares outstanding:
    Basic and diluted                   3,065,206      3,293,758      3,464,698
                                    =============  =============  =============





                        SEE NOTES TO FINANCIAL STATEMENTS


                                       21
<PAGE>


                        PHOENIX GOLD INTERNATIONAL, INC.
                       STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                           COMMON STOCK
                                     --------------------------        RETAINED
                                        SHARES       AMOUNT            EARNINGS          TOTAL
                                     ------------  ------------      ------------     -------------
<S>                                  <C>           <C>               <C>              <C>
Balance at September 30, 1997        $ 3,458,985   $ 7,521,865       $ 3,721,154      $ 11,243,019

Issuance of stock upon
exercise of options                        5,760        26,957                 -            26,957

Net loss                                       -             -          (772,374)         (772,374)
                                     ------------  ------------      ------------     -------------

Balance at September 30, 1998          3,464,745     7,548,822         2,948,780        10,497,602

Purchase of common stock                (230,400)     (392,825)                -          (392,825)

Net earnings                                   -             -           854,129           854,129
                                     ------------  ------------      ------------     -------------

Balance at September 30, 1999          3,234,345     7,155,997         3,802,909        10,958,906

Purchase of common stock                (207,400)     (605,069)                -          (605,069)

Net earnings                                   -             -         1,000,611         1,000,611
                                     ------------  ------------      ------------     -------------

Balance at September 30, 2000        $ 3,026,945   $ 6,550,928       $ 4,803,520      $ 11,354,448
                                     ============  ============      ============     =============

</TABLE>












                        SEE NOTES TO FINANCIAL STATEMENTS


                                       22
<PAGE>


                        PHOENIX GOLD INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                         YEAR ENDED SEPTEMBER 30,
                                                -----------------------------------------
                                                    2000          1999           1998
                                                ------------  ------------   ------------
<S>                                             <C>           <C>            <C>
 Cash flows from operating activities:
    Net earnings (loss)                         $ 1,000,611   $  854,129     $  (772,374)
    Adjustments to reconcile net
    earnings (loss) to net cash provided
    by (used in) operating activities:
        Depreciation and amortization               621,198      905,029       1,036,627
        Deferred taxes                              (10,000)      98,000        (402,000)
        Non-recurring charges                             -            -         878,147
        Changes in operating assets
        and liabilities:
            Accounts receivable                     623,914     (506,834)        898,665
            Inventories                            (124,025)   1,265,885         292,100
            Prepaid expenses                        (15,372)     (44,056)        (24,936)
            Other assets                            (97,196)    (177,603)        (13,953)
            Accounts payable                       (277,632)    (706,460)        222,592
            Accrued expenses                         86,665      (51,671)        178,574
            Income taxes payable                    (40,734)      81,644               -
                                                ------------  ------------   ------------

    Net cash provided by operating
    activities                                    1,767,429    1,718,063       2,293,442

Cash flows from investing activities:
    Proceeds from sale of facility                        -    5,036,912               -
    Exercise of purchase option for
    facility                                              -   (3,131,857)              -
    Capital expenditures, net                      (377,135)    (303,675)       (342,630)
                                                ------------  ------------   ------------

    Net cash provided by (used in)
    investing activities                           (377,135)   1,601,380        (342,630)

Cash flows from financing activities:
    Line of credit, net                                   -     (900,000)     (2,247,936)
    Proceeds from long-term obligations                   -            -       1,125,000
    Repayment of long-term obligations                    -   (1,160,762)       (854,834)
    Purchase of common stock                       (605,069)    (392,825)              -
    Proceeds from exercise of stock options               -            -          26,957
                                                ------------  ------------   ------------

    Net cash used in financing activities          (605,069)  (2,453,587)     (1,950,813)
                                                ------------  ------------   ------------

Increase (decrease) in cash and cash
equivalents                                         785,225      865,856              (1)

Cash and cash equivalents, beginning of
period                                              868,458        2,602           2,603
                                                ------------  ------------   ------------

Cash and cash equivalents, end of period        $ 1,653,683   $  868,458     $     2,602
                                                ============  ============   ============

Supplemental disclosures:
    Cash paid for interest                      $         -   $  139,000     $   334,000
    Cash paid for income taxes                      709,000      460,000          44,000

</TABLE>



                        SEE NOTES TO FINANCIAL STATEMENTS


                                       23
<PAGE>


                        PHOENIX GOLD INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                      Three Years Ended September 30, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    NATURE OF BUSINESS. Phoenix Gold International,  Inc. ("Phoenix Gold" or the
"Company") designs,  markets and sells electronics,  accessories and speakers to
the audio  market.  The  Company's  products are used in car audio  aftermarket,
professional  sound  and  custom  audio/video  and  home  theater  applications.
Substantially all of the electronics and certain accessories are manufactured in
Portland,  Oregon.  Phoenix Gold sells its products  primarily in North America,
South America,  Europe and Asia through selected audio and audio-video specialty
dealers and distributors.

    REPORTING  PERIODS.  The Company's  fiscal year is the 52 or 53 weeks ending
the last Sunday in  September.  Fiscal years 2000,  1999 and 1998 were 52 weeks.
For  presentation  convenience,  these  periods  have  been  presented  in these
financial statements as years ended September 30.

    ESTIMATES.  The  preparation  of financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
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 reported  amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

    CASH AND CASH  EQUIVALENTS.  Cash and cash  equivalents  include  all highly
liquid  investments  with  maturities  of  three  months  or less  from  date of
purchase.  The Company's cash  equivalents  are generally  commercial  paper and
money market accounts.

    INVENTORIES.  Inventories are stated at the lower of cost or market. Cost is
determined  by the average  cost method.  Raw  materials  inventories  generally
consist of  component  parts.  Finished  goods and  work-in-process  inventories
include materials, labor and manufacturing overhead.

    PROPERTY  AND  EQUIPMENT.  Property  and  equipment  are  recorded  at cost.
Depreciation  is provided  using the  straight-line  method  over the  estimated
useful lives (generally  three to seven years) of the related assets.  Leasehold
improvements  are amortized over the estimated useful lives of the assets or the
terms of the lease, whichever is shorter.

    GOODWILL.  Goodwill  is  amortized  using  the  straight-line  method over a
period  of five to twenty  years.  Accumulated  amortization  was  $248,000  and
$209,000 as of September 30, 2000 and 1999.

    FINANCIAL  INSTRUMENTS AND FAIR VALUES. The carrying amounts reported in the
balance  sheet  for cash and cash  equivalents,  accounts  receivable,  accounts
payable and accrued expenses  approximate fair value because of the immediate or
short-term maturity of these financial instruments.

    REVENUE  RECOGNITION. Revenue  is recognized upon  shipment of the  product,
net of related discounts.


                                       24
<PAGE>


    ADVERTISING.  Phoenix Gold expenses  advertising  as incurred.   Advertising
expense for the years ended September 30, 2000, 1999 and 1998 was  approximately
$144,000,  $124,000 and $275,000.

    STOCK OPTIONS. Accounting  Principles Board (APB) Opinion No. 25, ACCOUNTING
FOR STOCK  ISSUED TO  EMPLOYEES,  is followed to account for stock  options.  No
compensation cost is recognized because the option exercise price is equal to or
greater than the market price of the underlying stock on the date of grant.

    INCOME  TAXES.  Certain  items of income and expense are not reported in tax
returns and financial  statements in the same year. The tax effects of temporary
differences are reported as deferred taxes. Deferred tax assets are reduced by a
valuation  allowance  when it is more likely  than not that some  portion of the
deferred tax assets will not be realized.

    EARNINGS  (LOSS) PER SHARE.  Basic earnings (loss) per share is based on the
average number of common shares outstanding during each period. Diluted earnings
per share reflects the potential  shares  issuable upon assumed  exercise of the
outstanding stock options and warrants based on the treasury stock method.

    COMPREHENSIVE  INCOME. There were no differences between net earnings (loss)
and comprehensive income (loss) for the years ended September 30, 2000, 1999 and
1998.

    SEGMENT  INFORMATION.  Phoenix Gold operates in  a single  industry  segment
as described in Note 10.

    PROSPECTIVE  ACCOUNTING   CHANGE.  In June 1998,  the  Financial  Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 133, ACCOUNTING FOR DERIVATIVE  INSTRUMENTS AND HEDGING ACTIVITIES.  The new
statement  will  require  recognition  of all  derivatives  as either  assets or
liabilities  on the balance sheet at fair value.  The new statement is effective
for the year ending September 30, 2001, as deferred by SFAS No. 137,  ACCOUNTING
FOR DERIVATIVE  INSTRUMENTS  AND HEDGING  ACTIVITIES - DEFERRAL OF THE EFFECTIVE
DATE OF FASB  STATEMENT  NO. 133. The Company  does not expect  adoption of this
statement  to have a material  impact on its  financial  position  or results of
operations.


NOTE 2 - NON-RECURRING CHARGES

    Non-recurring charges consist of the following:

                                      2000            1999            1998
                                  -------------   -------------   -------------

    Impairment of product line    $          -    $          -    $   913,147
    Restructuring of operations              -               -        198,000
                                  -------------   -------------  -------------
        Total non-recurring
        charges                              -               -      1,111,147
    Less inventory write-down
    included in cost of sales                -               -       (233,000)
                                  -------------   -------------  -------------
        Total non-recurring
        charges                   $          -    $          -   $    878,147
                                  =============   =============  =============


                                       25
<PAGE>


    In 1998, Phoenix Gold took one-time,  non-recurring  charges of $1.1 million
related to implementation  of a restructuring  plan which included the phase-out
of a product  line and actions to reduce  future  operating  costs.  The Company
determined  that an impairment of tooling and royalty costs  associated with the
product line resulted  from the phase-out of the product line. In addition,  the
impairment of the product line required a write-down  of  inventories,  which is
included  in cost of sales in the  Statement  of  Operations  for the year ended
September  30, 1998.  The  restructuring  plan also  included  the  write-off of
leasehold improvements in connection with the early termination of a lease on an
adjacent building and the separation of certain employees.  During 1999, Phoenix
Gold completed its restructuring plan. Cash payments were not material.


NOTE 3 - ACCOUNTS RECEIVABLE

    Accounts receivable consist of the following:

                                                   2000             1999
                                              --------------   --------------

    Accounts receivable                       $  4,455,885     $  5,069,799
    Allowance for doubtful accounts               (285,000)        (275,000)
                                              --------------   --------------
        Total accounts receivable, net        $  4,170,885     $  4,794,799
                                              ==============   ==============


NOTE 4 - INVENTORIES

    Inventories consist of the following:

                                                   2000             1999
                                              --------------   --------------

    Raw materials and work-in-process         $  2,598,709     $  2,531,260
    Finished goods                               3,146,151        3,089,575
                                              --------------   --------------
        Total inventories                     $  5,744,860     $  5,620,835
                                              ==============   ==============


NOTE 5 - PROPERTY AND EQUIPMENT

    Property and equipment consist of the following:

                                                   2000             1999
                                              --------------   --------------

    Machinery and equipment                   $  3,205,936     $  3,114,553
    Office equipment and furniture               1,638,315        1,602,645
    Leasehold improvements                          75,266            3,829
                                              --------------   --------------
                                                 4,919,517        4,721,027
    Less accumulated depreciation
      and amortization                          (4,112,378)      (3,665,496)
                                              --------------   --------------
        Total property and equipment, net     $    807,139     $  1,055,531
                                              ==============   ==============


                                       26
<PAGE>


    During  1999,  Phoenix  Gold  purchased  its leased  office,  warehouse  and
manufacturing  facility for $3,132,000  from its landlord.  On the same day, the
Company sold the facility and the existing  improvements,  with a remaining  net
book value of $924,000, for a net sales price of $5,037,000, and then leased the
facility  from the  purchaser.  The  resulting  gain of $981,000  was  deferred.
Phoenix Gold will  recognize the deferred gain over the ten-year lease term as a
reduction in rent expense.  The net cash proceeds were used to repay $990,000 in
remaining long-term obligations.


NOTE 6 - FINANCING AGREEMENTS

    A $5.0  million  revolving  operating  line of credit is  available  through
December  31,  2000.  Interest on the  borrowings  is equal to the bank's  prime
lending rate (9.50% at September 30, 2000) or LIBOR plus 1.75%. Borrowings under
the line of credit are limited to eligible  accounts  receivable and inventories
and certain additional  limits.  Borrowings under the line of credit are secured
by cash and cash equivalents,  accounts receivable and inventories.  The line of
credit contains covenants which require a minimum level of tangible net worth, a
minimum ratio of current  assets to current  liabilities  and a maximum ratio of
interest  bearing  debt to net tangible  net worth.  As of  September  30, 2000,
Phoenix Gold was eligible to borrow $5.0  million  under the line of credit.  No
borrowings  were  outstanding  under the line of credit as of September 30, 2000
and 1999.

    During  July 1998,  the  Company  completed  a  $1,125,000  five-year  lease
financing at an interest rate of 8.25%, which financing was repaid in July 1999.


NOTE 7 - COMMITMENTS

    Phoenix Gold leases its office, warehouse and manufacturing facility under a
ten-year  operating  lease  agreement.  Terms of the lease  include an option to
extend the length of the lease for ten additional years.

    Minimum  future rentals under  operating  leases having initial or remaining
terms of one year or more are as follows:

    September 30,
      2001                                                  $   537,000
      2002                                                      551,000
      2003                                                      564,000
      2004                                                      578,000
      2005                                                      593,000
      Thereafter                                              2,357,000
                                                            ---------------
        Total                                               $ 5,180,000
                                                            ===============

    Rent expense under operating  leases for the years ended September 30, 2000,
1999 and 1998 was $288,000, $255,000 and $365,000.


                                       27
<PAGE>


NOTE 8 - TAXES

    Income tax benefit (expense):

                                   2000             1999             1998
                               --------------   --------------   --------------
    Current:
      Federal                  $  (550,000)     $  (412,000)     $   47,000
      State                       (118,000)         (53,000)          6,000
                               --------------   --------------   --------------
        Total current             (668,000)        (465,000)         53,000

    Deferred:
      Federal                        9,000          (87,000)        368,000
      State                          1,000          (11,000)         34,000
                               --------------   --------------   --------------
        Total deferred              10,000          (98,000)        402,000
                               --------------   --------------   --------------
          Total                $  (658,000)        (563,000)        455,000
                               ==============   ==============   ==============

    Effective income tax rates are as follows:

                                   2000             1999             1998
                               --------------   --------------   --------------
    Taxes at statutory
       Federal income tax rate     (34.0%)           (34.0%)         34.0%
    State taxes, net of
      Federal benefit               (4.4)            (4.4)            4.4
    Other, net                      (1.3)            (1.3)           (1.3)
                               --------------   --------------   --------------
        Total                      (39.7%)          (39.7%)          37.1%
                               ==============   ==============   ==============

    The tax effects of  temporary  differences  which give rise to deferred  tax
assets and deferred tax liabilities are as follows:

                                                    2000             1999
                                                --------------   --------------

    Deferred tax liability - depreciation       $   (64,000)     $   (133,000)

    Deferred tax assets:
      Accrued expenses                              170,000           138,000
      Deferred gain on sale of facility             330,000           367,000
      Goodwill and other intangibles                344,000           366,000
      Inventory valuation                           145,000           177,000
                                                --------------   --------------
        Total deferred tax assets                   989,000         1,048,000
                                                --------------   --------------
          Net deferred taxes                    $   925,000      $    915,000
                                                ==============   ==============

    Current deferred tax asset                  $   315,000      $    315,000
    Long-term deferred tax asset                    610,000           600,000
                                                --------------   --------------
          Net deferred taxes                    $   925,000           915,000
                                                ==============   ==============


                                       28
<PAGE>


NOTE 9 - SHAREHOLDERS' EQUITY AND STOCK OPTION PLAN

    Phoenix  Gold's Board of Directors and  shareholders  adopted and approved a
stock option plan (the "Stock Option Plan") on January 27, 1995. Under the Stock
Option Plan, the Board of Directors may grant incentive and nonqualified options
to employees,  directors  and  consultants  to purchase up to 315,000  shares of
common stock.  On July 16, 1996, the Stock Option Plan was amended to reserve an
additional 200,000 shares for issuance.

    In general, options to purchase common stock may not be granted at less than
fair market value at the date of grant.  Options  generally  become  exercisable
ratably  over a three to five year period and expire five to ten years after the
date of grant.  The Stock Option Plan expires in 2005. The Stock Option Plan can
also be  terminated  by the Board of Directors  at any time without  shareholder
approval  with  respect to shares of common  stock not  subject  to  outstanding
options.

    Information  relating to option  activity  for the Stock  Option Plan is set
forth below:

                                   Outstanding Options        Exercisable
                                   ---------------------  --------------------
                         Shares      Number    Weighted     Number    Weighted
                       Available      of       Average       of       Average
                          for        Shares    Exercise     Shares    Exercise
                        Option                  Price                  Price
                       ----------  ---------- ----------  ---------- ---------

  September 30, 1997     8,915      492,100   $   5.10      221,615  $   4.97

  Granted              (11,550)      11,550       4.00
  Exercised                  -       (5,760)      4.68
  Canceled             128,575     (128,575)      5.74
                       ----------  ----------

  September 30, 1998   125,940      369,315       4.85      258,383      4.86

  Granted               (2,800)       2,800       3.125
  Exercised                  -            -
  Canceled              42,340      (42,340)      4.72
                       ----------  ----------

  September 30, 1999   165,480      329,775       4.85      271,508      4.87

  Granted               (2,800)       2,800       3.375
  Exercised                  -            -
  Canceled              22,200      (22,200)      4.79
                       ----------  ----------

  September 30, 2000   184,880      310,375   $   4.85      278,809  $   4.87
                       ==========  ==========


                                       29
<PAGE>


    The following table summarizes  information about stock options  outstanding
under the Stock Option Plan at September 30, 2000:

                                Outstanding                     Exercisable
                    ------------------------------------   ---------------------
                                 Weighted
                                 Average      Weighted                  Weighted
    Range of                    Remaining     Average                   Average
    Exercise          Number    Contractual   Exercise       Number     Exercise
     Prices         of Shares      Life        Price       of Shares     Price
-----------------   ----------- -----------  -----------   ----------- ---------

$ 3.125 - $ 3.375      5,600       3.9       $   3.25           934    $   3.125
$ 4.00  - $ 4.75     218,375       4.8           4.66       198,275        4.67
$ 5.15  - $ 5.50      85,000       5.1           5.30        78,200        5.29
          $11.75       1,400       0.3          11.75         1,400       11.75
                    ----------- -----------  -----------   ----------- ---------
                     310,375       4.8       $   4.85       278,809    $   4.87
                    =========== ===========  ===========   =========== =========

    At September  30, 1999,  there were  outstanding  warrants to purchase up to
110,000 shares of common stock at $8.10 per share.  Such warrants expired on May
3, 2000.

    At September  30,  2000,  nonqualified  options to purchase  7,800 shares of
common stock were  outstanding  at exercise  prices ranging from $3.125 to $4.63
per share. Such options become exercisable  ratably over a three-year period and
expire from 2004 to 2007.  At  September  30,  2000,  Phoenix  Gold has reserved
503,055 shares of common stock for issuance upon exercise of the stock options.

    Phoenix Gold has elected to continue to account for stock options  according
to APB Opinion No. 25.  However,  as  required by SFAS No. 123,  ACCOUNTING  FOR
STOCK-BASED  COMPENSATION,  the Company has  computed  for pro forma  disclosure
purposes the value of options granted during the years ended September 30, 2000,
1999 and 1998 using the Black-Scholes option pricing model. The weighted average
estimated fair value of options  granted  during 2000,  1999 and 1998 was $2.35,
$2.09 and $2.45 per  share.  The  weighted  average  assumptions  used for stock
option  grants during the years ended  September 30, 2000,  1999 and 1998 were a
risk free interest rate of 6.75%, 5.00% and 5.75%, an expected dividend yield of
0%, 0% and 0%, an  expected  life of 5.0  years,  5.0 years and 5.0 years and an
expected volatility of 81.8%, 79.0% and 67.8%.

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective assumptions,  including the expected stock price volatility.  Because
the Company's options have characteristics significantly different from those of
traded  options and because  changes in the  subjective  input  assumptions  can
materially  affect the fair value  estimate,  in the opinion of management,  the
existing models do not necessarily provide a reliable single measure of the fair
value of its options.


                                       30
<PAGE>


    For purposes of the pro forma  disclosures,  the estimated fair value of the
stock-based  awards is amortized over the vesting period. Pro forma net earnings
(loss) and earnings (loss) per share is as follows:

                                          2000         1999         1998
                                      ------------- ------------ ------------

    Pro forma net earnings (loss)     $   938,000   $   789,000  $  (781,000)
    Pro forma earnings (loss) per
    share                                    0.31          0.24        (0.23)

    The effects of applying SFAS No. 123 to provide pro forma disclosure are not
likely to represent net earnings (loss) and earnings (loss) per share for future
years  since  SFAS No.  123 does not apply to grants  prior to  October 1, 1995,
options vest over several  years,  additional  awards are  anticipated in future
years and assumptions  used for any additional  awards may vary from the current
assumptions.

    During  1999,  Phoenix  Gold began  acquiring  shares of its common stock in
connection  with a stock  repurchase  program  announced in November 1998.  That
program  authorized  the Company to purchase up to $1.0  million of common stock
from time to time on the open market or pursuant to negotiated  transactions  at
price levels the Company  deems  attractive.  In 1999,  Phoenix  Gold  purchased
230,400  shares of common stock for $392,825.  In 2000,  Phoenix Gold  purchased
207,400 shares of common stock for $605,069.


NOTE 10 - SALES AND MAJOR CUSTOMERS

    Phoenix Gold operates in a single industry segment: the design,  manufacture
and sales of electronics,  accessories and speakers for use in the audio market.
Net sales by geographic region are as follows:

                                   2000             1999             1998
                               --------------   --------------   --------------

    United States              $  20,294,371    $  20,078,164    $  17,903,217
    International:
      Europe                       2,707,278        3,746,786        4,624,273
      Asia                         1,382,724        1,157,670          945,600
      Other                        2,955,176        2,555,529        3,011,625
                               --------------   --------------   --------------
        Total international        7,045,178        7,459,985        8,581,498
                               --------------   --------------   --------------
          Net sales            $  27,339,549    $  27,538,149     $ 26,484,715
                               ==============   ==============   ==============

    One customer  accounted for 10.8% of the Company's net sales during the year
ended September 30, 2000. No customer accounted for 10% or more of the Company's
net sales during the years ended  September  30, 1999 and 1998.  As of September
30, 2000 and 1999, one customer  accounted for approximately  22.2% and 15.0% of
net accounts receivable.  As of September 30, 2000 and 1999, approximately 37.1%
and 42.1% of net accounts receivable is attributable to export sales.


                                       31
<PAGE>


NOTE 11 - BENEFIT PLAN

    Phoenix Gold adopted a profit  sharing and 401(k)  savings plan in September
1997 which covers substantially all employees. Participating employees may defer
up to 15% of their compensation,  subject to certain regulatory limitations. The
Company matches 100% of employee  contributions up to $750 of each participating
employee's compensation.  The matching contribution expense was $58,000, $63,000
and $77,000 for the years ended September 30, 2000, 1999 and 1998.

    The profit  sharing and 401(k) savings plan also permits the Company to make
discretionary  profit  sharing  contributions  to all  employees.  Discretionary
profit sharing  contributions are determined annually by the Board of Directors.
No profit sharing  expense was approved for the years ended  September 30, 2000,
1999 and 1998.


QUARTERLY FINANCIAL DATA (UNAUDITED)

    The  following  is a summary of  operating  results by quarter for the years
ended September 30, 2000 and 1999:

2000 QUARTER ENDED  DECEMBER 31  MARCH 31    JUNE 30     SEPTEMBER     TOTAL
                                                            30
                    ----------- ---------- ----------- ------------- -----------

Net sales           $6,893,627  $6,511,208  $7,056,124  $6,878,590   $27,339,549
Gross profit         1,800,769   1,883,631   2,075,526   1,800,362     7,560,288
Net earnings           211,973     240,610     363,504     184,524     1,000,611
Earnings per share        0.07        0.08        0.12        0.06          0.33

1999 QUARTER ENDED

Net sales           $6,665,935  $6,200,066  $7,454,978   $7,217,170  $27,538,149
Gross profit         1,721,052   1,673,617   2,055,526    1,672,687    7,122,882
Net earnings           206,336     159,719     335,901      152,173      854,129
Earnings per share        0.06        0.05        0.10         0.05         0.26













                                       32
<PAGE>


                                   SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  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.


                                 PHOENIX GOLD INTERNATIONAL, INC.


                                 By:    /s/ Keith A. Peterson
                                        --------------------------------
                                        Keith A. Peterson
                                        Chairman, President and
                                        Chief Executive Officer

                                 Date: December 14, 2000


    Pursuant to requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


    Signature                       Capacity                         Date


/s/ Keith A. Peterson         Chairman, President and          December 14, 2000
-------------------------     Chief Executive Officer
Keith A. Peterson             (Principal Executive Officer)


/s/ Timothy G. Johnson        Executive Vice President,        December 14, 2000
-------------------------     Chief Operating Officer and
Timothy G. Johnson            Director


/s/ Joseph K. O'Brien         Chief Financial Officer and      December 14, 2000
-------------------------     Secretary (Principal Financial
Joseph K. O'Brien             and Accounting Officer)


/s/ Robert A. Brown           Director                         December 14, 2000
-------------------------
Robert A. Brown


/s/ Edward A. Foehl           Director                         December 14, 2000
-------------------------
Edward A. Foehl


/s/ Frank G. Magdlen          Director                         December 14, 2000
-------------------------
Frank G. Magdlen


                                       33
<PAGE>


                                  EXHIBIT INDEX



  Exhibit                            Description                           Page
  -------                            -----------                           ----

   23.1      Consent of Deloitte & Touche LLP, Independent Auditors         35

   27        Financial Data Schedule                                        36

   99.1      Certain Factors to Consider in Connection with
             Forward-Looking Statements                                     37
























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