U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-Q

           [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGEACT OF 1934
                For the quarterly period ended December 26, 1999,

                                       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 0-25866

                        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)


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 [ ]

There were  3,049,445  shares of the  issuer's  common stock  outstanding  as of
January 31, 2000.

                                       1
<PAGE>

                        PHOENIX GOLD INTERNATIONAL, INC.
                FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1999

                                      INDEX
                                      -----
<TABLE>
<CAPTION>


Part I.        FINANCIAL INFORMATION                                                                               Page
                                                                                                                   ----

               <S>         <C>                                                                                      <C>
               Item 1.     Financial Statements

                           Balance Sheets at December 31, 1999
                               and September 30, 1999 (unaudited)                                                    3

                           Statements of Earnings for the Three Months Ended
                               December 31, 1999 and 1998 (unaudited)                                                4

                           Statements of Cash Flows for the Three Months Ended
                               December 31, 1999 and 1998 (unaudited)                                                5

                           Notes to Financial Statements                                                             6

               Item 2.     Management's Discussion and Analysis of Financial Condition
                               and Results of Operations                                                             8


Part II.       OTHER INFORMATION

               Item  6.    Exhibits and Reports on Form 8-K                                                         11


SIGNATURES                                                                                                          12

INDEX TO EXHIBITS                                                                                                   13

</TABLE>

                                       2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS

                        PHOENIX GOLD INTERNATIONAL, INC.
                                 BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              December 31,           September 30,
                                                                                 1999                    1999
                                                                          --------------------    --------------------
<S>                                                                       <C>                      <C>
ASSETS
Current assets:
    Cash and cash equivalents                                              $        677,002        $        868,458
    Accounts receivable, net                                                      4,342,707               4,794,799
    Inventories                                                                   6,283,774               5,620,835
    Prepaid expenses                                                                274,676                 213,677
    Deferred taxes                                                                  315,000                 315,000
                                                                          --------------------    --------------------
        Total current assets                                                     11,893,159              11,812,769

Property and equipment, net                                                         948,555               1,055,531
Goodwill, net                                                                       168,176                 178,081
Deferred taxes                                                                      585,000                 600,000
Other assets                                                                        266,002                 242,058
                                                                          --------------------    --------------------

        Total assets                                                       $     13,860,892        $     13,888,439
                                                                          ====================    ====================


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                       $      1,485,439        $      1,074,881
    Accrued payroll and benefits                                                    312,933                 436,970
    Other accrued expenses                                                          284,667                 379,782
    Income taxes payable                                                            135,644                  81,644
                                                                          --------------------    --------------------
        Total current liabilities                                                 2,218,683               1,973,277

Deferred gain on sale of facility                                                   931,737                 956,256

Shareholders' equity:
    Preferred stock;
        Authorized - 5,000,000 shares; none outstanding                                  -                       -
    Common stock, no par value;
        Authorized - 20,000,000 shares
        Issued and outstanding - 3,078,445 and 3,234,345 shares                   6,695,590               7,155,997
    Retained earnings                                                             4,014,882               3,802,909
                                                                          --------------------    --------------------
        Total shareholders' equity                                               10,710,472              10,958,906
                                                                          --------------------    --------------------

        Total liabilities and shareholders' equity                         $     13,860,892        $     13,888,439
                                                                          ====================    ====================

</TABLE>



                        SEE NOTES TO FINANCIAL STATEMENTS

                                        3
<PAGE>
                        PHOENIX GOLD INTERNATIONAL, INC.
                             STATEMENTS OF EARNINGS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                           December 31,
                                                                           ----------------------------------------
                                                                                 1999                  1998
                                                                           ------------------    ------------------
<S>                                                                         <C>                   <C>
Net sales                                                                   $       6,893,627     $       6,665,935

Cost of sales                                                                       5,092,858             4,944,883
                                                                           ------------------    ------------------

    Gross profit                                                                    1,800,769             1,721,052


Operating expenses:
    Selling                                                                           926,769               781,681
    General and administrative                                                        531,387               542,177
                                                                           ------------------    ------------------

        Total operating expenses                                                    1,458,156             1,328,858
                                                                           ------------------    ------------------

Income from operations                                                                342,613               392,194

Other income (expense):
    Interest expense                                                                       -                (48,858)
    Other income, net                                                                   8,360                    -
                                                                           ------------------    ------------------

        Total other income (expense)                                                    8,360               (48,858)
                                                                           ------------------    ------------------

Earnings before income taxes                                                          350,973               343,336

Income tax expense                                                                   (139,000)             (137,000)
                                                                           ------------------    ------------------

Net earnings                                                                $         211,973     $         206,336
                                                                           ==================    ==================

Earnings per share - basic and diluted                                      $            0.07     $            0.06
                                                                           ==================    ==================

Average shares outstanding - basic and diluted                                      3,156,721             3,436,261
                                                                           ==================    ==================

</TABLE>

                        SEE NOTES TO FINANCIAL STATEMENTS

                                       4
<PAGE>
                        PHOENIX GOLD INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                        December 31,

                                                                              ----------------------------------
                                                                                   1999               1998
                                                                              ---------------    ---------------
<S>                                                                             <C>                <C>
Cash flows from operating activities:
    Net earnings                                                                $   211,973        $   206,336
    Adjustments to reconcile net earnings to
     net cash provided by (used in) operating activities:
        Depreciation and amortization                                               160,981            245,825
        Deferred taxes                                                               15,000             10,000
        Changes in operating assets and liabilities:
            Accounts receivable                                                     452,092           (306,495)
            Inventories                                                            (662,939)           565,208
            Prepaid expenses                                                        (60,999)           (84,817)
            Other assets                                                            (36,944)                -
            Accounts payable                                                        410,558           (583,986)
            Accrued expenses                                                       (165,152)          (226,414)
                                                                              --------------     ---------------

    Net cash provided by (used in) operating activities                             324,570           (174,343)

Cash flows from investing activities:
    Capital expenditures, net                                                       (55,619)           (22,240)
                                                                              ---------------    ---------------

    Net cash used in investing activities                                           (55,619)           (22,240)

Cash flows from financing activities:
    Line of credit, net                                                                  -             608,189
    Repayment of long-term obligations                                                   -             (55,209)
    Purchase of common stock                                                       (460,407)          (356,400)
                                                                              ---------------    ---------------

    Net cash provided by (used in) financing activities                            (460,407)           196,580
                                                                              ---------------    ---------------
Decrease in cash and cash equivalents                                              (191,456)                (3)

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

Cash and cash equivalents, end of period                                        $   677,002        $     2,599
                                                                              ===============    ===============

Supplemental disclosure:
    Cash paid for interest                                                      $         -        $    50,000
    Cash paid for income taxes
                                                                                     70,000                 -


</TABLE>


                        SEE NOTES TO FINANCIAL STATEMENTS

                                       5
<PAGE>
                        PHOENIX GOLD INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - UNAUDITED FINANCIAL STATEMENTS

      Certain  information and note disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted from these  unaudited  financial  statements.  These unaudited
financial statements should be read in conjunction with the financial statements
and notes  included  in the  Company's  Annual  Report on Form 10-K for the year
ended September 30, 1999 filed with the Securities and Exchange Commission.  The
results of operations for the three-month period ended December 31, 1999 are not
necessarily  indicative  of the  operating  results  for the full  year.  In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
accruals,  have been made to present fairly the Company's  financial position at
December 31, 1999 and the results of its  operations  and its cash flows for the
three-month periods ended December 31, 1999 and 1998.

NOTE 2 - REPORTING PERIODS

      The Company's fiscal year is the 52-week or 53-week period ending the last
Sunday in  September.  Fiscal  2000 and fiscal  1999 are  52-week  years and all
quarters are 13-week  periods.  For  presentation  convenience,  the Company has
indicated in these financial  statements that its fiscal year ended on September
30 and that the three months presented ended on December 31.

NOTE 3 - PROSPECTIVE ACCOUNTING CHANGE

      In June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards 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.
Management  has not yet completed an evaluation of the effect this standard will
have on the Company's financial statements.

NOTE 4 - INVENTORIES

      Inventories  are stated at the lower of cost or market and  consist of the
following:
<TABLE>
<CAPTION>

                                              December 31,            September 30,
                                                  1999                     1999
                                          ---------------------    ---------------------
      <S>                                   <C>                       <C>

      Raw materials and work-in-process     $      2,700,594          $     2,531,260
      Finished goods and supplies                  3,583,180                3,089,575
                                          ---------------------    ---------------------
          Total inventories                 $      6,283,774          $     5,620,835
                                          =====================    =====================
</TABLE>
                                       6
<PAGE>

NOTE 5 - PROPERTY AND EQUIPMENT

      Property and equipment consist of the following:
<TABLE>
<CAPTION>

                                                  December 31,            September 30,
                                                     1999                     1999
                                             ---------------------    ---------------------
      <S>                                      <C>                       <C>
      Machinery, equipment and vehicles        $     4,748,414           $     4,717,198
      Leasehold improvements                            28,232                     3,829
                                             ---------------------    ---------------------
                                                     4,776,646                 4,721,027
      Less accumulated depreciation
        and amortization                            (3,828,091)               (3,665,496)
                                             ---------------------    ---------------------
          Total property and equipment, net    $       948,555           $     1,055,531
                                             =====================    =====================

</TABLE>

NOTE 6 - LINE OF CREDIT

      During December 1999, the Company renewed its revolving  operating line of
credit through December 2000. The new agreement provides for borrowings of up to
$5.0 million subject to eligible accounts receivable and inventories and certain
additional  limits.  Interest  on the  borrowings  is equal to the bank's  prime
lending rate (8.5% at December 31, 1999) or LIBOR plus 1.75%.  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 tangible net worth.
As of December 31, 1999,  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.

NOTE 7 - SHAREHOLDERS' EQUITY

      The Board of Directors has  authorized  the Company to purchase up to $1.0
million of Company  common  stock.  During the three months  ended  December 31,
1999, the Company acquired 155,900 shares of its common stock for $460,000. From
the inception of the stock repurchase program, the Company has acquired $850,000
of Company common stock.

                                       7
<PAGE>

PART I:    FINANCIAL INFORMATION
ITEM 2:    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
---------------------

      Net sales  increased  $228,000,  or 3.4%,  to $6.9  million  for the three
months  ended  December  31, 1999  compared to $6.7 million for the three months
ended December 31, 1998 due principally to increased  domestic  sales.  Domestic
sales  increased  $310,000,  or 6.4%, to $5.1 million for the three months ended
December 31, 1999  compared to $4.8 million for the three months ended  December
31, 1998.  International sales decreased 4.5% to $1,762,000 for the three months
ended  December  31,  1999,  from  $1,845,000  in the  comparable  1998  period.
International  sales  represented  25.6%  and  27.7% of net  sales for the three
months ended December 31, 1999 and 1998, respectively.  Sales of electronics and
speakers  increased  9.3% and 60.0%,  respectively  for the three  months  ended
December 31, 1999 compared to the corresponding quarter in fiscal 1999. Sales of
accessories  decreased  23.3% for the  three  months  ended  December  31,  1999
compared to the three  months  ended  December  31,  1998.  The Company  expects
international  sales for fiscal 2000 to remain at levels lower than historically
achieved.

      Gross  profit  increased  to 26.1%  from  25.8% of net sales for the three
months  ended  December  31,  1999  and  1998,  respectively,  primarily  due to
increased  sales  volume which  caused  manufacturing  overhead to decrease as a
percentage of sales.

      Operating   expenses  consist  of  selling,   general  and  administrative
expenses.  Total operating expenses increased  $129,000,  or 9.7%, to $1,458,000
for the three months  ended  December 31, 1999  compared to  $1,329,000  for the
three months ended December 31, 1998. Operating expenses were 21.2% and 19.9% of
net sales in the respective three-month periods.

      Selling expenses increased  $140,000,  or 17.8%, to $927,000 for the three
months ended  December 31, 1999  compared to $787,000  for the  comparable  1998
period.  Selling  expenses  were 13.4% and 11.8% of net sales in the  respective
three-month periods. The increased selling expenses in dollar amount were due to
higher  payroll costs as a result of additional  sales and marketing  personnel,
increased salaries and wages and increased sales incentive programs.

      General  and  administrative  expenses  decreased  $11,000,  or  2.0%,  to
$531,000 for the three months ended  December 31, 1999  compared to $542,000 for
the comparable fiscal 1999 period. General and administrative expenses were 7.7%
and 8.1% of net  sales in the  respective  three-month  periods.  The  decreased
general and administrative  expenses were due to decreased  engineering expenses
offset in part by higher  payroll  costs as a result of  increased  salaries and
wages.

      Interest  expense  decreased  by $49,000 to $0 for the three  months ended
December 31, 1999  compared to $49,000 for the three  months ended  December 31,
1998.  The  decrease  in  interest  expense  was due to  repayment  of short and
long-term borrowings in fiscal 1999.

      Net earnings were $212,000,  or $0.07 per share - basic and diluted (based
on 3.16 million  shares  outstanding),  for the three months ended  December 31,
1999,  compared  to net  earnings  of  $206,000,  or $0.06 per share - basic and
diluted  (based on 3.44 million shares  outstanding)  for the three months ended
December 31, 1998.  The increase in net earnings in the first quarter

                                       8
 <PAGE>

of fiscal 2000 compared to the  corresponding  quarter in fiscal 1999 was due to
increased sales, improved gross margin and reduced interest expense.

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
during  the first  quarter of fiscal  2000 from cash  generated  from  operating
activities. Net cash provided by operating activities was $325,000 for the three
months ended  December 31, 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 from operations exceeded current needs, the Company paid
down in part the  balance  owing on its  operating  line of credit  rather  than
investing  and  accumulating  excess cash which  resulted in low  reported  cash
balances in periods prior to September 30, 1999.

      Cash and cash  equivalents  decreased by $191,000  during the three months
ended  December 31, 1999 due  principally  to purchases of Company common stock.
Accounts  receivable  decreased by $452,000  during the first  quarter of fiscal
2000 due to a decrease in sales in the first  quarter of fiscal 2000 as compared
to the fourth  quarter of fiscal  1999.  Inventories  increased  by $663,000 and
accounts payable increased  $411,000 during the first quarter of fiscal 2000 due
to  management's   efforts  to  increase  certain   electronics,   speakers  and
accessories  inventories.  Prepaid expenses  increased  $61,000 during the three
months  ended  December  31,  1999  primarily  due to trade  show  deposits  and
insurance costs incurred at the beginning of the Company's fiscal year.  Accrued
expenses  decreased  $165,000  due to lower  accrued  payroll  and  benefits  at
December 31, 1999.  Overall,  net working capital decreased  $165,000 during the
first quarter of fiscal 1999 due to the Company  acquiring 155,900 shares of its
common stock for $460,000.

      The Company made capital expenditures of $56,000 in the three months ended
December  31,  1999.   Management   anticipates   that   discretionary   capital
expenditures  for the remainder of fiscal 2000 will not exceed  $400,000.  These
anticipated  expenditures  will be financed from available  cash,  cash provided
from operations and, if necessary, proceeds from the line of credit.

      During December 1999, the Company renewed its revolving  operating line of
credit through December 2000. The new agreement provides for borrowings of up to
$5.0 million subject to eligible accounts receivable and inventories and certain
additional  limits.  Interest  on the  borrowings  is equal to the bank's  prime
lending rate (8.5% at December 31, 1999) or LIBOR plus 1.75%.  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 tangible net worth.
As of December 31, 1999,  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 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 December 31, 1999, the Company had cash and cash equivalents of
$677,000  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  does not invest in  derivative
securities.

                                       9
<PAGE>

YEAR 2000 CONVERSION
--------------------

      The Company has completed  the process of preparing  its computer  systems
and  applications  for  the  Year  2000  date  conversion.  Information  systems
determined not to be Year 2000  compliant  were  modified,  upgraded or replaced
through  acquisition and  implementation of "off the shelf" upgrades to existing
information  systems  software.  The  upgrades  were  acquired  from third party
vendors  at a cost of less  than  $20,000.  As of the  date  of  filing  of this
Quarterly  Report on Form 10-Q, the Company believes the effect of the Year 2000
conversion on its business was not and will not be material.

      There can be no assurance,  however,  because of the existence of numerous
systems and related  components  within the Company and the  interdependency  of
these systems,  that undetected Year 2000 issues could not materially  adversely
affect our business in the future.

FORWARD-LOOKING STATEMENTS
--------------------------

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; 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;  costs or  expenditures
associated  with  remediating  potential  Year 2000 issues;  and,  environmental
regulation as well as other  factors  discussed in Exhibit 99.1 to the Company's
1999 Annual Report on Form 10-K 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.

                                       10
<PAGE>


PART II.   OTHER INFORMATION
ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

          (a) Exhibits

                    3(ii)(a)  Amended Restated Bylaws dated December 1, 1999

                    10.18     Loan Agreement dated December 1, 1999 between the
                              Company and U.S. National Bank Association

                    10.19     Promissory Note dated December 1, 1999 made by the
                              Company in favor of U.S. National Bank Association

                    27        Financial Data Schedule

          (b) Reports on Form 8-K

                                None.


                                       11
<PAGE>

                                   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.

                                    PHOENIX GOLD INTERNATIONAL, INC.



                                    /s/ Joseph K. O'Brien
                                    -------------------------------------
                                    Joseph K. O'Brien
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

Dated:  February 7, 2000


                                       12
<PAGE>

                                INDEX TO EXHIBITS
<TABLE>
        <S>                                                                                               <C>
        EXHIBIT                                                                                          PAGE
        -------                                                                                          ----

        3(ii)(a)    Amended Restated Bylaws dated December 1, 1999                                        14

        10.18       Loan Agreement dated December 1, 1999 between the Company
                    and U.S. National Bank Association                                                    38

        10.19       Promissory Note dated December 1, 1999 made by the Company
                    in favor of U.S. National Bank Association                                            44

        27          Financial Data Schedule                                                               53
</TABLE>

                                       13