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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q/A

(Mark One)

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2001

or

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

For the transition period from  to

Commission File Number: 0-26524

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MACKIE DESIGNS INC.(Exact name of registrant as specified in its charter)

Washington(State or other jurisdiction of incorporation or organization)

91-1432133(I.R.S. Employer Identification No.)


16220 Wood-Red Road, N.E., Woodinville, Washington(Address of principal executive offices)

98072(Zip Code)


(425) 487-4333(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)


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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 / /

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, no par valueClass

12,372,358Number of Shares Outstanding
(as of May 1, 2001)


EXPLANATORY NOTE

This
Quarterly Report on Form 10-Q/A is being filed as Amendment No. 1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, filed on May 15, 2001, to correct the effects of a clerical error related to the elimination of intercompany sales (made at cost) and cost of goods sold from our
condensed consolidated statements of income. As a result of this clerical error, net sales and cost of goods sold as originally reported for the quarter ended March 31, 2001 were overstated by
approximately $1.4 million. The impact of this clerical error resulted in amendments to the following sections: Item 1, Condensed consolidated statements of income; Item 1, Notes to condensed
consolidated financial statements; Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

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MACKIE DESIGNS INC.    FORM 10-Q/A  For the quarter ended March 31, 2001    INDEX

|PART I.    |  | FINANCIAL INFORMATION |  |                                                                                           
|---------- |  | --------------------- |  | ------------------------------------------------------------------------------------------
|           |  |                       |  |                                                                                           
|           |  | Item 1.               |  | Financial Statements (Unaudited)                                                          
|           |  |                       |  |                                                                                           
|           |  |                       |  | Condensed consolidated balance sheetsMarch 31, 2001 and December 31, 2000                
|           |  |                       |  |                                                                                           
|           |  |                       |  | Condensed consolidated statements of incomeThree months ended March 31, 2001 and 2000    
|           |  |                       |  |                                                                                           
|           |  |                       |  | Condensed consolidated statements of cash flowsThree months ended March 31, 2001 and 2000
|           |  |                       |  |                                                                                           
|           |  |                       |  | Notes to condensed consolidated financial statements                                      
|           |  |                       |  |                                                                                           
|           |  | Item 2.               |  | Management's Discussion and Analysis of Financial Condition and Results of Operations     
|           |  |                       |  |                                                                                           
|           |  | Item 3.               |  | Quantitative and Qualitative Disclosures About Market Risk                                
|           |  |                       |  |                                                                                           
|PART II.   |  | OTHER INFORMATION     |  |                                                                                           
|           |  |                       |  |                                                                                           
|           |  | Item 1.               |  | Legal Proceedings                                                                         
|           |  |                       |  |                                                                                           
|           |  | Item 2.               |  | Changes in Securities                                                                     
|           |  |                       |  |                                                                                           
|           |  | Item 3.               |  | Defaults Upon Senior Securities                                                           
|           |  |                       |  |                                                                                           
|           |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                       
|           |  |                       |  |                                                                                           
|           |  | Item 5.               |  | Other Information                                                                         
|           |  |                       |  |                                                                                           
|           |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                          
|           |  |                       |  |                                                                                           
|SIGNATURES |  |                      
|           |  |                       |  |                                                                                           
|EXHIBITS   |  |                      

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MACKIE DESIGNS INC.        CONDENSED CONSOLIDATED BALANCE SHEETS        (Unaudited)

In thousands, except per share data

|                                           |                                           | March 31,
2001 |                            | December 31,
2000 |  
|------------------------------------------ | ----------------------------------------- | -------------- | -------------------------- | ----------------- | -
|ASSETS                                     |                                           |                |                            |                   |  
|Current assets:                            |                                           |                |                            |                   |  
|                                           | Cash and cash equivalents                 |                | $                          | 3,590             |  
|                                           | Available-for-sale securities             |                |                            |                  |  
|                                           | Accounts receivable, net                  |                |                            | 42,239            |  
|                                           | Inventories                               |                |                            | 59,308            |  
|                                           | Prepaid expenses and other current assets |                |                            | 1,753             |  
|                                           | Deferred income taxes                     |                |                            | 3,125             |  
|                                           |                                           |                |                            |                   |  
|                                           |                                           |                | Total current assets       |                   |  
|Property, plant and equipment, net         |                                           |                | 23,860                     |                   |  
|Intangible assets, net                     |                                           |                | 23,592                     |                   |  
|Bonds                                      |                                           |                | 3,688                      |                   |  
|Other assets, net                          |                                           |                | 1,425                      |                   |  
|                                           |                                           |                |                            |                   |  
|Total assets                               |                                           | $              | 162,580                    |                   | $
|                                           |                                           |                |                            |                   |  
|LIABILITIES AND SHAREHOLDERS' EQUITY       |                                           |                |                            |                   |  
|Current liabilities:                       |                                           |                |                            |                   |  
|                                           | Short-term borrowings                     |                | $                          | 30,933            |  
|                                           | Accounts payable                          |                |                            | 20,492            |  
|                                           | Accrued expenses                          |                |                            | 10,329            |  
|                                           | Income taxes payable                      |                |                            | 1,368             |  
|                                           | Current portion of long-term debt         |                |                            | 6,335             |  
|                                           |                                           |                |                            |                   |  
|                                           |                                           |                | Total current liabilities  |                   |  
|Long-term debt, excluding current portion  |                                           |                | 27,929                     |                   |  
|Other long-term liabilities                |                                           |                | 3,572                      |                   |  
|Deferred income taxes                      |                                           |                | 3,891                      |                   |  
|Contingency and subsequent event           |                                           |                |                            |                   |  
|Shareholders' equity:                      |                                           |                |                            |                   |  
|                                           | Common stock                              |                |                            | 27,897            |  
|                                           | Retained earnings                         |                |                            | 32,847            |  
|                                           | Accumulated other comprehensive loss      |                |                            | (3,013            | )
|                                           |                                           |                |                            |                   |  
|                                           |                                           |                | Total shareholders' equity |                   |  
|                                           |                                           |                |                            |                   |  
|Total liabilities and shareholders' equity |                                           | $              | 162,580                    |                   | $
|                                           |                                           |                |                            |                   |  

See accompanying Notes to Condensed Consolidated Financial Statements.

3

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MACKIE DESIGNS INC.        CONDENSED CONSOLIDATED STATEMENTS OF INCOME        (Unaudited)

In thousands, except per share data

|                                                                                            |                                     | Three months ended
March 31, |                         
|------------------------------------------------------------------------------------------- | ----------------------------------- | ---------------------------- | ------------------------
|
|Net sales                                                                                   |                                     | $                            | 57,208                  
|Cost of goods sold                                                                          |                                     |                              | 37,436                  
|                                                                                            |                                     |                              |                         
|Gross profit                                                                                |                                     |                              | 19,772                  
|Operating expenses:                                                                         |                                     |                              |                         
|                                                                                            | Selling, general and administrative |                              |                         
|                                                                                            | Research and development            |                              |                         
|                                                                                            |                                     |                              |                         
|                                                                                            |                                     |                              | Total operating expenses
|Operating income                                                                            |                                     |                              | 3,019                   
|Interest income                                                                             |                                     |                              | 102                     
|Interest expense                                                                            |                                     |                              | (1,458                  
|Other income (expense), net                                                                 |                                     |                              | (103                    
|                                                                                            |                                     |                              |                         
|Income before income taxes                                                                  |                                     |                              | 1,560                   
|Income taxes                                                                                |                                     |                              | 598                     
|                                                                                            |                                     |                              |                         
|Net income                                                                                  |                                     | $                            | 962                     
|                                                                                            |                                     |                              |                         
|Basic and diluted net income per share:                                                     |                                     | $                            | 0.08                    
|Weighted average common and potential common shares used in computing net income per share: |                                     |                              |                         
|                                                                                            | Basic                               |                              |                         
|                                                                                            | Diluted                             |                              |                         

See accompanying Notes to Condensed Consolidated Financial Statements.

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MACKIE DESIGNS INC.        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS        (Unaudited)

In thousands, except per share data

|                                                 |                                                                                   | Three months ended
March 31,                 |                                          
|------------------------------------------------ | --------------------------------------------------------------------------------- | -------------------------------------------- | -----------------------------------------
|
|Operating activities                             |                                                                                   |                                              |                                          
|                                                 | Net income                                                                        |                                              | $                                        
|                                                 | Adjustments to reconcile net income to net cash provided by operating activities: |                                              |                                          
|                                                 |                                                                                   | Depreciation and amortization                |                                          
|                                                 |                                                                                   | Deferred stock compensation                  |                                          
|                                                 |                                                                                   | Deferred income taxes                        |                                          
|                                                 |                                                                                   | Changes in operating assets and liabilities: |                                          
|                                                 |                                                                                   |                                              | Accounts receivable                      
|                                                 |                                                                                   |                                              | Inventories                              
|                                                 |                                                                                   |                                              | Prepaid expenses and other current assets
|                                                 |                                                                                   |                                              | Other assets                             
|                                                 |                                                                                   |                                              | Accounts payable and accrued expenses    
|                                                 |                                                                                   |                                              | Income taxes payable                     
|                                                 |                                                                                   |                                              | Other long term liabilities              
|                                                 |                                                                                   |                                              |                                          
|                                                 |                                                                                   | Cash provided by operating activities        |                                          
|Investing activities                             |                                                                                   |                                              |                                          
|                                                 | Purchases of available-for-sale securities                                        |                                              |                                          
|                                                 | Proceeds from sales of available-for-sale securities                              |                                              |                                          
|                                                 | Proceeds from maturities of available-for-sale securities                         |                                              |                                          
|                                                 | Purchases of property, plant and equipment                                        |                                              |                                          
|                                                 |                                                                                   |                                              |                                          
|                                                 |                                                                                   | Cash (used)/provided by investing activities |                                          
|Financing activities                             |                                                                                   |                                              |                                          
|                                                 | Proceeds from long-term debt                                                      |                                              |                                          
|                                                 | Payments on long-term debt                                                        |                                              |                                          
|                                                 | Net proceeds on bank line of credit and short-term borrowings                     |                                              |                                          
|                                                 | Proceeds from the exercise of stock options                                       |                                              |                                          
|                                                 |                                                                                   |                                              |                                          
|                                                 |                                                                                   | Cash provided by financing activities        |                                          
|Effect of exchange rate changes on cash          |                                                                                   |                                              | (1,107                                   
|                                                 |                                                                                   |                                              |                                          
|(Decrease)/increase in cash and cash equivalents |                                                                                   |                                              | (248                                     
|Cash and cash equivalents at beginning of period |                                                                                   |                                              | 3,838                                    
|                                                 |                                                                                   |                                              |                                          
|Cash and cash equivalents at end of period       |                                                                                   | $                                            | 3,590                                    
|                                                 |                                                                                   |                                              |                                          
|Supplemental disclosures                         |                                                                                   |                                              |                                          
|Cash paid for income taxes                       |                                                                                   | $                                            | 31                                       
|                                                 |                                                                                   |                                              |                                          
|Cash paid for interest                           |                                                                                   | $                                            | 1,395                                    
|                                                 |                                                                                   |                                              |                                          

See accompanying Notes to Condensed Consolidated Financial Statements.

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MACKIE DESIGNS INC.        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        March 31, 2001        (Unaudited)

In thousands, except per share data

1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Mackie Designs, Inc. (the "Company") in accordance with generally accepted
accounting principles for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments,
consisting of normal recurring items, necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of future financial results.
For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2000 included in the Company's Form 10-K filed
with the Securities and Exchange Commission. Certain amounts reported in previous years have been reclassified to conform to the 2001 presentation.

In
June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as amended, requires that
all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. This statement, as amended, became effective for the Company on
January 1, 2001. The adoption of SFAS No. 133 did not have an impact on the Company's consolidated financial position or results of operations.

2.  Inventories

Inventories consisted of the following:

March 31,
2001

December 31,
2000Raw materials

$
26,344

$
31,579Work in process


6,372


4,831Finished goods


26,592


27,061$
59,308

$
63,471


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3.  Intangible assets

Intangible assets consist of the following:

March 31,
2001

December 31,
2000Goodwill

$
17,473

$
17,974Developed technology


5,200


5,200Assembled workforce


1,660


1,660Trademark


1,380


1,38025,713


26,214Less accumulated amortization


2,121


1,795$
23,592

$
24,419


4.  Net Income per Share

Basic net income per share is based on the weighted-average number of common shares outstanding for the period. Diluted net income per share includes the effect of potential
dilutive common shares outstanding, consisting of stock options using the treasury stock method. The denominators of the diluted net income per share calculations exclude the effect of unexercised
stock options representing the potential rights to 1,705,599 and 1,360,175 shares for the first quarters of 2001 and 2000, respectively, as including the effect of such instruments would be
antidilutive. The following schedule represents a reconciliation of the numerators and denominators of basic and diluted net income per share calculations.

Three months ended
March 31,2001

2000Numerator:Numerator for basic and diluted net income per sharenet income

$
962

$
2,419Denominator:Denominator for basic net income per shareweighted average common shares


12,372


12,110Effect of dilutive stock options


423


228Denominator for diluted net income per share


12,795


12,338Basic net income per share

$
0.08

$
0.20Diluted net income per share

$
0.08

$
0.20


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5.  Comprehensive Income (Loss)

Comprehensive income (loss) for the three-month period ended March 31, 2001 and 2000, is detailed below:

Three months ended
March 31,2001

2000Net income

$
962

$
2,419Other comprehensive loss:Foreign currency translation adjustments, net of tax


(1,178
)

(649
)Comprehensive income (loss)

$
(216
)
$
1,770


6.  Segment Information

The Company identifies its business segments based on management responsibility using a combination of products and geographic factors. The Company has three reportable
segments: Mackie Designs, Inc. ("Mackie"), its Italian subsidiary, Mackie Designs (Italy) S.p.A. ("Mackie Italy"), and its U.S. subsidiary, Eastern Acoustic Works, Inc. ("EAW"). The
Mackie segment offers audio mixers and other professional audio equipment. The Mackie Italy segment offers loudspeakers, loudspeaker components and Mackie product offerings. The EAW segment offers
loudspeakers targeted at the mid to high-end of the installed and touring sound markets. A summary of key financial data by segment is as follows:

|                                   |                                  | Mackie |   | Mackie
Italy |  | EAW |        | Elimination of
intercompany
amounts |   | Total 
|---------------------------------- | -------------------------------- | ------ | - | ------------ |  | --- | ------ | ----------------------------------- | - | ------
|Three months ended March 31, 2001: |                                  |        |   |              |  |     |        |                                     |   |       
|                                   | Net sales, to external customers |        | $ | 30,379       |  | $   | 18,061 |                                     | $ | 8,768 
|                                   | Net sales, intersegment          |        |   | 5,010        |  |     | 7,413  |                                     |   | 2,083 
|                                   | Operating income                 |        |   | 2,343        |  |     | 488    |                                     |   | 38    
|                                   | Total assets                     |        |   | 118,102      |  |     | 81,455 |                                     |   | 36,306
|Three months ended March 31, 2000: |                                  |        |   |              |  |     |        |                                     |   |       
|                                   | Net sales, to external customers |        | $ | 26,865       |  | $   | 18,326 |                                     | $ |      
|                                   | Net sales, intersegment          |        |   | 3,723        |  |     | 1,880  |                                     |   |      
|                                   | Operating income                 |        |   | 3,695        |  |     | 1,356  |                                     |   |      
|                                   | Total assets                     |        |   | 79,254       |  |     | 71,120 |                                     |   |      

The
net assets of foreign operations of the Company were approximately $13.8 million at March 31, 2001.

7.  Contingency

EAW has subrogated claims asserted against it from insurance companies who paid claims made by EAW's landlord and other tenants in the building who were affected by a fire
started by a loaned employee in a portion of the building occupied by EAW in 1996. The insurance company for the landlord alleges that EAW is liable for up to $2.1 million for damages to the
building. The Company

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believes that these losses are not attributable to it under Massachusetts law. The Company is vigorously defending these claims. The claims of the other tenants have been covered by EAW's insurance
carrier. The ultimate resolution of this matter is not known at this time. No provision has been made in the Company's consolidated financial statements related to these claims.

8.  Financing Arrangements

In March 2001, the Company received approval for the restructuring of its U.S. long-term debt and its U.S. line of credit. Under the terms of the amended
agreements, the Company will receive additional long-term funding of $2.5 million for the acquisition of Sydec (See Note 9 of Notes to Condensed Consolidated Financial
Statements). Interest and principal payments on the loan will be payable in
monthly installments of $0.5 million. The new line of credit provides up to $15.0 million of short-term borrowing subject to certain limitations and expires April 30,
2002.

9.  Subsequent Event

In January 2001, the Company entered into an agreement to acquire all the outstanding shares of Sydec NV ("Sydec") for a total of approximately $4.5 million in
cash. The transaction closed in early April 2001. Based in Belgium, Sydec is recognized as a leading developer of products and services in the area of embedded electronics & software,
networking, digital signal processing and Windows 95/98/NT/2000 driver and application development.

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

General

The following information contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking
statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words "believe," "anticipate,"
"expect," "estimate," "project," "will be," "will continue," "will likely result," or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties, which may cause
actual results to differ materially from the forward-looking statements.

The
following discussions, including but not limited to, the sections entitled "Cautionary Factors That May Affect Future Results" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," describe some, but not all, of the factors that could cause the actual results to differ materially from the forward-looking statements. These factors include, among others,
the following: international, national and local general economic and market conditions; the size and growth of the professional audio equipment market; competition with other marketers, distributors
and sellers of professional audio equipment; the Company's ability to develop and introduce new products; the Company's ability to sustain, manage or forecast its growth and inventories; the Company's
ability to integrate the operations of companies acquired; the Company's ability to secure and protect trademarks, patents, and other intellectual property; the performance and reliability of the
Company's products; customer service; the loss of significant customers or suppliers; dependence on distributors; management of increased costs of freight and transportation; the Company's ability to
meet delivery deadlines; general risks associated with doing business in foreign countries, including, without limitation, import duties, tariffs, foreign currency fluctuations, and political and
economic instability; changes in government regulations; its ability to attract and retain qualified employees; liability and other claims asserted against the Company; and other factors referenced or
incorporated by reference in this report and other reports filed with the Securities and Exchange Commission.

The
risks included above are not exhaustive. The Company operates in a very competitive environment and new risk factors may emerge from time to time. Management cannot predict all such risk factors,
nor can it assess the impact of all such risk factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The
Company derives its operating revenue from worldwide sales of digital and analog audio mixers, speakers, amplifiers and other professional audio equipment. A significant portion of the Company's
total sales is to customers outside the U.S. International sales volumes have historically been affected by foreign currency fluctuations relative to the U.S. Dollar. When weaknesses of local
currencies have made the Company's products more expensive, sales in those countries have declined.

The
Company's gross margins are also affected by its international sales. Typically, gross margins from products exported by Mackie are lower than those sold in the U.S. due to discounts offered to
its international distributors. Mackie Italy does not offer discounts to its distributors. The discounts offered by Mackie are given because the international distributors typically incur certain
expenses, including technical support, product service and in-country advertising that the Company normally incurs for domestic sales. The Company offered its international distributors a
weighted-average discount of approximately 4.4% in the first three months of 2001 and 3.7% for the corresponding period in 2000. The increase in discounts in 2000 relates to higher international
discounts granted by EAW.

The
Company will continue to introduce new products and product revisions as it has in the past. Some anticipated new products will require the implementation of manufacturing practices for which the

10

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Company is not familiar. This could result in lower margins as the Company becomes more familiar with new manufacturing procedures.

Results of Operations

Quarter Ended March 31, 2001 as Compared with Quarter Ended March 31, 2000

Net sales increased 26.6% to $57.2 million in the first quarter of 2001 from $45.2 million in the first quarter of 2000. Of the $12.0 million increase,
$8.8 million was attributable to the addition of EAW. New product offerings in the digital product families as well as the speaker product family accounted for an additional $6.3 million
of the growth. These increases were partially offset by an unfavorable foreign exchange effect of $1.3 million and lower sales in the compact mixer and power amplifier markets of
$2.3 million. Sales outside the U.S. decreased to 39.6% of the Company's total net sales in the first quarter of 2001 from 48.0% in the first quarter of 2000. The decrease was due mainly to the
inclusion of sales by EAW whose sales outside of the U.S. comprised only 31% of its total net sales for the first quarter of 2001 as well as the unfavorable impact of foreign exchange rates.

Gross
margin decreased to 34.6% in the first quarter of 2001 from 35.8% in the first quarter of 2000. This decline was primarily due to reduced sales in the higher margin compact mixer market and
higher sales in the lower margin speaker market along with an unfavorable foreign currency exchange effect of approximately 0.8%. These declines were offset partially by increased sales in the high
margin digital product market and declines in the lower margin amplifier market. Gross profit increased to $19.8 million in the first quarter of 2001 from $16.2 million in the
corresponding period of 2000 for the same reasons affecting net sales noted above.

Selling,
general and administrative expense increased to $13.8 million in the first quarter of 2001 from $9.8 million in the corresponding period of 2000. Of the $4.0 million
increase, $2.7 million is attributable to the inclusion of EAW. Costs related to increased headcount and the non-capitalized portion of the Oracle implementation made up the
remainder of the increase. These costs were partially offset by a $0.5 million favorable impact of foreign exchange. As a percentage of net sales, selling, general and administrative expenses
increased to 24.1% in the first quarter of 2001 from 21.8% in the corresponding period in 2000. This increase is primarily due to incremental headcount costs associated with the build-up
of corporate infrastructure that began during the second half 2000 as well as non-capitalized costs related to the Oracle implementation.

Research
and development (R&D) expense increased to $2.9 million in the first quarter of 2001 from $1.9 million in the corresponding period of 2000. Of the $1.0 million increase,
$0.8 million is attributable to the inclusion of EAW. As a percentage of net sales, these expenses increased to 5.2% in the first quarter of 2001 from 4.3% in the corresponding period of 2000.
The increase is primarily due to EAW's higher R&D expense as a percentage of its sales.

Interest
income decreased to $0.1 million in the first quarter of 2001 compared with $0.2 million in the first quarter of 2000 due to a decrease in invested cash during the corresponding
periods. Interest expense increased to $1.5 million in the first quarter of 2001 from $0.6 million in the corresponding period of 2000. The increase was primarily attributable to the
increase in borrowings due to the purchase of EAW and to higher levels of short-term borrowing.

Income
tax expense for the first quarter of 2001 was $0.6 million representing an overall effective rate of 38.3% compared to $1.6 million and 39.3% for the same period of 2000,
respectively.

Liquidity and Capital Resources

During the first three months of 2001, the Company's operating activities provided $2.3 million in cash. Net cash provided by operating activities was primarily
attributable to net income, decreases in inventory and other assets and an increase in taxes payable offset partially by an increase in accounts

11

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receivable. The increase in accounts receivable was attributable to the increased revenues realized by the Company during the first quarter of 2001. The decline in inventory is also related to the
high sales volume above the Company's build plan as well as a concerted effort by the Company to reduce its inventory levels. Net cash used by investing activities totaled $2.2 million in the
first three months of 2001, due principally to acquisition of property, plant and equipment offset partially by sales of available-for-sale securities. The large increase in
property, plant and equipment acquisitions over the corresponding period in 2000 relates primarily to the capitalization of elements of the Company's Oracle software implementation and strengthening
of its computer and communications infrastructure. Net cash provided by financing activities in the first three months of 2001 was $0.8 million, due principally to net proceeds from
short-term borrowings offset partially by payments on long-term debt.

In
March 2001, the Company received approval for the restructuring of its U.S. long-term debt. Under the terms of the amended agreement, the Company will receive additional funding
of $2.5 million for the acquisition of Sydec (See Note 9 of Notes to Condensed Consolidated Financial Statements). Interest and principal payments on the loan will be payable in monthly
installments of $0.5 million. The outstanding balance on this debt at March 31, 2001 was $27.7 million, which includes $8.7 million outstanding on the Mackie Italy
acquisition loan and $19.0 million outstanding on the EAW acquisition loan. The loan, which is secured by all of the Company's assets, bears interest at the bank's prime rate, or at a specified
LIBOR rate plus a specified margin, whichever the Company chooses.

In
March 2001, the Company also received approval for the restructuring of its U.S. line of credit. The new line provides up to $15.0 million of short-term borrowing subject
to certain limitations. This line of credit is secured by all of the Company's U.S. based assets. At March 31, 2001 there was $11.6 million outstanding on the line of credit, as well as
a $1.5 million guarantee on debt of Mackie Italy, leaving an available balance on the line of $1.9 million. This credit facility expires April 30, 2002.

Under
the terms of the U.S. credit agreements, the Company must maintain certain financial ratios and tangible net worth. The agreements also provide, among other matters, restrictions on additional
financing, dividends, mergers, acquisitions, and an annual capital expenditure limit of $10.0 million. The Company was in compliance with all covenants at March 31, 2001.

Mackie
Italy also has agreements with several banks in Italy that provide short-term credit facilities totaling approximately $25.2 million. At March 31, 2001, there was
approximately $18.6 million outstanding under these facilities. The majority of these credit facilities are secured by Mackie Italy's receivables. Interest rates on these credit facilities
range from 4.8% to 13.5%.

Mackie
Italy also has various long-term loans outstanding at March 31, 2001, totaling approximately $6.2 million, which bear interest at rates from 6.3% to 8.9%. These loans,
certain of which are secured by specific assets of Mackie Italy, mature at varying dates up to 2013.

The
Company believes that its existing cash, cash equivalents and credit facilities will be sufficient to provide adequate working capital to fund operations over the next twelve months. However,
there can be no assurance that the Company will not be required to seek other financing or that such financing, if required, will be available on terms satisfactory to the Company. The Company may
also utilize cash to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies (see Note 9 of Notes to Condensed Consolidated Financial
Statements).

Euro Conversion

European business systems are being forced to handle currencies in a new way with the introduction of the Euro. Mackie Italy's computer system does not support the Euro, and
reprogramming the system is not an economically viable option. Although the date for mandatory Euro compliance is January 1, 2002, it is believed that the existing system can be utilized until
early in the fourth quarter 2001 after which time the transition to the new system would need to begin. The Company has acquired an

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Oracle based software system and the related computer hardware to run a single system for all worldwide operations. Implementation procedures related to the system began during the third quarter of
2000. This system will be Euro compliant and is scheduled to be in place in Italy during the second half of 2001. The cost of this system is preliminarily estimated to be in the range of $6.0 to
$8.0 million dollars.

New Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133,
as amended, requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. This statement, as amended, became effective
for the Company on January 1, 2001. The adoption of SFAS No. 133 did not have an impact on the Company's consolidated financial position or results of operations.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company did not have any derivative financial instruments as of March 31, 2001. However, the Company is exposed to interest rate risk. The Company's interest income
and expense are most sensitive to changes in the general level of U.S. and European interest rates. In this regard, changes in U.S. and European interest rates affect the interest earned on the
Company's cash equivalents as well as interest paid on debt.

At
March 31, 2001, the Company had cash and cash equivalents, and bonds of $7.3 million and short-term borrowings of $30.9 million, all subject to variable
short-term interest rates. A hypothetical change in the interest rate of 10% (for example from 8% to 8.8%) would not have had a material effect on the Company's earnings for the quarter.

Foreign Currency Risk

The Company operates foreign subsidiaries in Canada, Italy, the United Kingdom, Germany, France, the Netherlands, China and the Czech Republic. The Company's business and
financial condition are, therefore, sensitive to currency exchange rates or any other restrictions imposed on their currencies. Sales and expenses incurred by foreign subsidiaries are denominated in
the subsidiary's local currency and translated into U.S. Dollar amounts at average rates during the period. The Company does not employ any derivative based hedging strategies, however, it may do so
in the future. The Company also has a significant natural hedge in the form of Italian based manufacturing and European based operating, interest and tax expenses.

Foreign
exchange rate sensitivity analysis can be quantified by estimating the impact on the Company's earnings as a result of hypothetical changes in the value of the U.S. Dollar, the Company's
functional currency, relative to the other currencies in which the Company transacts business. All other things being equal, an average 10% increase in the value of the U.S. Dollar, throughout the
three-month period ended March 31, 2001, would not have had a material effect on the Company's earnings for the quarter.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

EAW has subrogated claims asserted against it from insurance companies who paid claims made by EAW's landlord and other tenants in the building who were
affected by a fire started by a loaned employee in a portion of the building occupied by EAW in 1996. The insurance company for the landlord alleges that EAW is liable for up to $2.1 million
for damages to the building. The Company believes that these losses are not attributable to it under Massachusetts law. The Company is vigorously defending these claims. The claims of the other
tenants have been covered by EAW's insurance carrier. The ultimate resolution of this matter is not known at this time. No provision has been made in the Company's consolidated financial statements
related to these claims.

The
Company is also involved in various legal proceedings and claims that arise in the ordinary course of business. Management currently believes that these matters will not have a material adverse
impact on the Company's financial position, liquidity or results of operations.

Item 2.  Changes in Securities

None.

Item 3.  Defaults upon Senior Securities

None.

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

None.

Item 5.  Other Information

None.

Item 6.  Exhibits and Reports on Form 8-K

None.

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SIGNATURES

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

|                          |  |     |  | Mackie Designs Inc.(Registrant)                                                                                                        
|------------------------- |  | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|                          |  |     |  |                                                                                                                                        
|Dated: September 14, 2001 |  | By: |  | /s/WILLIAM A. GARRARDWilliam A. Garrard Vice President, Finance and
Chief Financial Officer(Principal Financial and Accounting Officer)

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