U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1997

                         Commission File Number 0-21630

                       Action Performance Companies, Inc.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)



                  Arizona                                 86-0704792
                  -------                                 ----------
       (State or other jurisdiction of         (IRS Employer Identification No.)
        incorporation or organization)



                        2401 W. 1st St., Tempe, AZ 85281
                        --------------------------------
                    (Address of Principal Executive Offices)

                                 (602) 894-0100
                                 --------------
              (Registrant's telephone number, including area code)




Indicate by check 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  xx     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:  13,713,485  shares of common
stock (as of May 12, 1997).
<PAGE>
PART I, ITEM 1     FINANCIAL STATEMENTS


                       ACTION PERFORMANCE COMPANIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                   As of March 31, 1997 and September 30, 1996
<TABLE>
<CAPTION>

                                                                March 31,                September 30,
                                                                  1997                       1996
                                                              -----------                -------------
                                                              (Unaudited)
<S>                                                           <C>                        <C>        
                                     ASSETS
                                     ------
CURRENT ASSETS:
  Cash..................................................      $ 2,978,623                $ 4,983,382
  Accounts receivable, net of allowance for doubtful
    accounts of $895,140 and $256,324, respectively.....       11,965,253                  7,496,988
  Inventories...........................................       13,810,128                  5,833,812
  Deferred income taxes.................................        1,031,619                  1,031,619
  Prepaid royalties.....................................        3,886,237                  2,295,505
  Prepaid expenses and other assets.....................          784,773                    739,723
                                                              -----------                -----------

    Total current assets................................       34,456,633                 22,381,029

PROPERTY AND EQUIPMENT, at cost less accumulated
  depreciation of $4,783,858 and $3,362,939, respectively      12,451,260                  8,188,441

GOODWILL, net of accumulated amortization of $504,405 and
  $9,519, respectively..................................       33,310,042                     56,370

NOTES RECEIVABLE AND OTHER ASSETS.......................        1,301,021                  1,022,794
                                                              -----------                -----------

                                                              $81,518,956                 $31,648,634
                                                              ===========                 ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
CURRENT LIABILITIES:
  Accounts payable......................................      $ 6,489,336                $ 2,188,343
  Accrued royalties.....................................        2,942,881                  1,180,038
  Line of credit........................................        4,500,000                       -
  Income taxes payable..................................          243,052                    521,547
  Accrued expenses and other............................        1,078,708                    397,529
                                                              -----------                -----------

    Total current liabilities...........................       15,253,977                  4,287,457

LONG TERM DEBT:
  Notes payable.........................................       21,398,183                       -
  Other long term debt..................................          906,516                    364,725
                                                              -----------                -----------

    Total long term debt................................       22,304,699                    364,725

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Preferred stock, no par value, 5,000,000 shares
  authorized, no shares issued and outstanding..........             -                          -
Common stock, $.01 par value, 25,000,000 shares
  authorized; 13,713,485 and 12,609,769 shares,
    respectively, issued and outstanding................          137,135                    126,098
  Additional paid-in capital............................       31,938,922                 18,991,296
  Retained earnings.....................................       11,884,223                  7,879,058
                                                              -----------                -----------
    Total shareholders' equity..........................       43,960,280                 26,996,452
                                                              -----------                -----------

                                                              $81,518,956                $31,648,634
                                                              ===========                ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance sheets
                                       2
<PAGE>
                       ACTION PERFORMANCE COMPANIES, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

        For the Six and Three Month Periods Ended March 31, 1997 and 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                            Six Months Ended          Three Months Ended
                                                March 31                    March 31
                                       ------------------------  -------------------------
                                          1997          1996         1997         1996
                                       ----------    ----------   ----------   -----------
<S>                                   <C>           <C>          <C>           <C>        
Sales:
   Collectibles.....................  $23,521,573   $17,046,904  $13,650,006   $ 9,349,603
   Apparel and souvenirs............   18,333,520       725,328   13,121,088       416,393
   Promotional .....................    1,354,826          -       1,304,666          -
   Other............................      267,759          -         226,716          -
                                      -----------   -----------  -----------   -----------
      Net sales.....................   43,477,678    17,772,232   28,302,476     9,765,996

Cost of sales.......................   26,301,654    10,583,762   17,521,215     5,818,946
                                      -----------   -----------  -----------   -----------
Gross profit........................   17,176,024     7,188,470   10,781,261     3,947,050

Selling, general and
  administrative expenses...........    9,750,462     3,966,700    6,198,741     2,094,966
                                      -----------   -----------  -----------   -----------

Income from operations..............    7,425,562     3,221,770    4,582,520     1,852,084

Other income (expense):
  Interest income and other, net....      166,154       188,424       94,237        86,715
  Interest expense..................     (916,441)      (47,407)    (615,035)      (38,970)
                                      -----------   -----------  -----------   -----------
    Total other income (expense)....     (750,287)      141,017     (520,798)       47,745
                                      -----------   -----------  -----------   -----------

Income before provision for
  income taxes......................    6,675,275     3,362,787    4,061,722     1,899,829

Provision for income taxes..........    2,670,110     1,345,115    1,624,690       759,932
                                      -----------   -----------  -----------   -----------

NET INCOME..........................  $ 4,005,165   $ 2,017,672  $ 2,437,032   $ 1,139,897
                                      ===========   ===========  ===========   ===========

NET INCOME PER COMMON SHARE:
  Primary........................... $       0.29   $      0.16  $      0.17   $      0.09
                                     ============   ===========  ===========   ===========
  Fully Diluted .................... $       0.29   $      0.16  $      0.17   $      0.09
                                     ============   ===========  ===========   ===========

WEIGHTED AVERAGE SHARES OUTSTANDING:
  Primary...........................   13,786,339    12,861,232   14,129,020    12,913,288
                                     ============  ============  ===========   ===========
  Fully Diluted ....................   13,799,126    12,948,412   14,129,067    12,983,544
                                     ============  ============  ===========   ===========
</TABLE>
                   The accompanying notes are an integral part
                   of these consolidated financial statements.
                                       3
<PAGE>
                       ACTION PERFORMANCE COMPANIES, INC.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                     For the Six Months Ended March 31, 1997

                                   (Unaudited)
<TABLE>
<CAPTION>
                                            Common Stock
                                            ------------             Additional
                                       Shares                         Paid-In          Retained
                                       Issued         Amount          Capital          Earnings           Total
                                       ------         ------          -------          --------           -----

<S>                                  <C>             <C>            <C>               <C>              <C>        
BALANCE, September 30, 1996          12,609,769      $126,098       $18,991,296       $ 7,879,058      $26,996,452
                                     ----------      --------       -----------       -----------      -----------


Common stock issued upon
 exercise of options............       169,998          1,700           745,035              -             746,735

Common stock issued upon
 purchase of business...........       746,218          7,462         9,604,636              -           9,612,098

Issuance Of Common Stock .......       187,500          1,875         2,597,955              -           2,599,830

Net Income......................          -              -                 -            4,005,165        4,005,165
                                    ----------       --------       -----------        ----------      -----------

BALANCE, March 31, 1997             13,713,485       $137,135       $31,938,922       $11,884,223      $43,960,280
                                    ==========       ========       ===========       ===========      ===========
</TABLE>
                   The accompanying notes are an integral part
                   of these consolidated financial statements.
                                       4
<PAGE>
                       ACTION PERFORMANCE COMPANIES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                For the Six Months Ended March 31, 1997 and 1996
                                   (Unaudited)


                                                     1997             1996
                                                 ------------      -----------

Cash Flows from Operating Activities:
Net Income ................................      $ 4,005,165       $ 2,017,672
  Adjustments to reconcile net income to
   net cash provided by (used in) operating
   activities:
   Depreciation and amortization ..........        1,915,805           714,760
   Change in assets and liabilities:
     Accounts receivable ..................        1,153,522        (1,213,978)
     Inventories ..........................       (2,794,169)       (1,295,244)
     Prepaid royalties ....................       (1,590,732)       (1,205,751)
     Prepaid expenses and other assets ....         (171,366)         (363,550)
     Accounts payable .....................         (736,421)          321,928
     Income taxes payable .................         (278,495)         (872,228)
     Accrued royalties and other ..........          981,956             4,868
                                                 -----------       -----------
      Net cash provided by (used in)
       operating activities ...............        2,485,265        (1,891,523)

Cash Flows from Investing Activities:
  Acquisition of property and equipment ...       (3,635,416)       (2,377,549)
  Proceeds from sale of equipment .........          110,781              --
  Cash acquired in purchase of business ...        1,140,363              --
                                                 -----------       -----------
    Net cash used in investing activities .       (2,384,272)       (2,377,549)

Cash Flows from Financing Activities:
  Borrowings on line of credit ............        4,378,583         3,235,599
  Payments on line of credit ..............       (5,278,583)       (3,235,599)
  Proceeds from issuance of common stock ..        3,346,565           867,513
  Payments on notes payable ...............       (4,419,984)             --
  Principal payments on capital lease
   obligation and other ...................         (132,333)          (48,828)
                                                 -----------       -----------
    Net cash provided by (used in)
     financing activities .................       (2,105,752)          818,685
                                                 -----------       -----------

  Decrease in Cash ........................       (2,004,759)       (3,450,387)
  Cash, Beginning of Period ...............        4,983,382         6,759,984
                                                 -----------       -----------
  Cash, End of Period .....................      $ 2,978,623       $ 3,309,597
                                                 ===========       ===========

                   The accompanying notes are an integral part
                   of these consolidated financial statements
                                       5
<PAGE>
                       ACTION PERFORMANCE COMPANIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1997


(1)      INTERIM FINANCIAL REPORTING

The  accompanying   unaudited   Consolidated  Financial  Statements  for  Action
Performance Companies, Inc. (the "Company")have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
the  instructions  to  Form  10-Q.  Accordingly,  they  do not  include  all the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the financial  position,  results of  operations  and cash flows for the periods
presented  have been made.  The results of operations  for the six-month  period
ended March 31, 1997 are not  necessarily  indicative of the  operating  results
that may be expected  for the entire year ending  September  30,  1997.  Certain
prior  period  amounts have been  reclassified  to conform to the March 31, 1997
presentation.  These financial statements should be read in conjunction with the
Company's Form 10-KSB for the fiscal year ended September 30, 1996.

(2)      INVENTORIES

Inventories are stated at lower of cost (first-in,  first-out method) or market,
and consist of the following at March 31, 1997:

         Raw materials.............................. $ 1,902,282
         Finished goods.............................  11,907,846
                                                     -----------
                                                     $13,810,128
                                                     ===========

(3)      PROPERTY AND EQUIPMENT

Property  and  equipment  are  recorded  at  cost  and  depreciated   using  the
straight-line  method over the estimated useful lives of the respective  assets,
which range from three to ten years.

Property and equipment consist of the following at March 31, 1997:

         Tooling and molds.......................... $11,167,958
         Furniture, fixtures and equipment..........   3,331,961
         Autos and trucks...........................   1,908,301
         Leasehold improvements.....................     826,898
                                                     -----------
                                                      17,235,118
         Less - accumulated depreciation............   4,783,858
                                                     -----------
                                                     $12,451,260
                                                     ===========

The cost of renewals and betterments that materially  extend the useful lives of
assets or increase their productivity are capitalized.

(4)      NET INCOME PER COMMON SHARE

Net income per common share is computed based on the weighted  average number of
common shares and common share equivalents  outstanding using the treasury stock
method,  except when common share equivalents have an antidilutive  effect.  All
share amounts and per share data have been  restated to reflect the  two-for-one
stock split effected as a stock dividend on May 28, 1996.

(5)      SUPPLEMENTAL CASH FLOW INFORMATION

Cash  payments  during the six months  ended  March 31,  1997 and 1996  included
interest of $427,629 and $42,758,  respectively,  and income taxes of $2,981,000
and $2,270,000, respectively.
                                       6
<PAGE>
In November  1996,  the Company  purchased  substantially  all of the assets and
assumed  certain   liabilities  of  Sports  Image,  Inc.  ("Sports  Image")  for
approximately  $30,000,000,  consisting  of a  $24,000,000  promissory  note due
January 2, 1997 and 403,361 shares of the Company's  common stock. On January 8,
1997, the Company acquired the business and  substantially all of the assets and
assumed  specified  liabilities  of Motorsport  Traditions  Limited  Partnership
("MTL")  and  acquired  all  of  the  capital  stock  of  Creative  Marketing  &
Promotions,  Inc. ("CMP" and,  together with MTL,  "Motorsport  Traditions") for
approximately  $13,000,000.  The  consideration  paid for Motorsport  Traditions
consisted of (i) cash in the amount of $5,400,000; (ii) a promissory note in the
principal  amount of  $1,600,000  issued  by a wholly  owned  subsidiary  of the
Company; and (iii) an aggregate of 342,857 shares of the Company's Common Stock.
Non-cash financing, investing, and operating activities for the six months ended
March 31, 1997 include (i) a $9,612,098  increase to common stock issued for the
acquisitions;  (ii) a $38,391,771  increase of debt and liabilities  incurred or
assumed in the acquisitions;  and (iii) a $13,114,948 increase of assets, net of
cash acquired in the acquisitions.

Investing  activities for the six-month period ended March 31, 1997 included the
sale of  approximately  $556,000 in equipment for cash proceeds of approximately
$111,000 and notes receivable of approximately $445,000.

(6)      INCOME TAXES

Income taxes for the  six-month  period ended March 31, 1997 were  calculated by
applying  the  estimated  effective  tax rate for the fiscal  year to the income
before taxes.

(7)      BUSINESS COMBINATIONS

In November  1996,  the Company  purchased  substantially  all of the assets and
assumed   certain   liabilities   of  Sports  Image.   The  purchase  price  was
approximately  $30,000,000,  consisting  of a  $24,000,000  promissory  note due
January 2, 1997 and 403,361 shares of the Company's  Common Stock. On January 2,
1997, the Company repaid the $24,000,000  promissory note with the proceeds from
the issuance of senior notes and a portion of the borrowings under the Company's
new credit facility. See Note 8. Sports Image sells and distributes a variety of
licensed motorsports products through wholesale distributor networks,  corporate
sponsors, and mobile trackside stores. Terms of this acquisition were determined
by  arms-length   negotiations  between  representatives  of  Sports  Image  and
representatives  of the Company.  In fiscal 1996, the Company derived 16% of its
net sales from Sports Image, a distributor of the Company's die-cast collectible
products.  Sports  Image  had sales of  approximately  $41,800,000  of  apparel,
die-cast replicas, souvenirs, and other motorsports consumer products during the
period  from  January  1, 1996 to  November  7, 1996  (which  includes  sales of
die-cast  collectibles  purchased  from  the  Company  at an  aggregate  cost of
approximately $5,800,000). This transaction was accounted for as a purchase.

On January 8, 1997, the Company acquired the business and  substantially  all of
the assets and assumed specified  liabilities of Motorsport Traditions from 1995
Nascar  Winston Cup  Champion  driver Jeff Gordon,  Kenneth R.  Barbee,  certain
entities controlled by Mr. Barbee, and certain other persons. The effective date
of the  acquisition  of Motorsport  Traditions is January 1, 1997.  The purchase
price paid by the Company for Motorsport Traditions consisted of (i) cash in the
amount  of  $5,400,000;  (ii) a  promissory  note  in the  principal  amount  of
$1,600,000  issued by a wholly owned  subsidiary  of the  Company;  and (iii) an
aggregate of 342,857 shares of the Company's  Common Stock.  The promissory note
bears  interest at 4% per annum,  matures on  December  31,  1998,  and has been
guaranteed by the Company. The terms of the acquisition, including the valuation
of the assets,  liabilities,  and capital  stock  acquired by the Company,  were
determined by arms-length  negotiations  between  representatives of the sellers
and representatives of the Company.  Motorsport Traditions sells and distributes
licensed  motorsports  products through a network of wholesale  distributors and
mobile  trackside  stores.  Prior  to the  acquisitions,  MTL and  CMP  together
generated  approximately  $33,000,000  in annual  revenues  from  their  design,
manufacturing,  and sales and  distribution  activities.  This  transaction  was
accounted for as a purchase.

Unaudited pro forma income statement data

The  following  unaudited pro forma  combined  financial  information  of Action
Performance Companies, Inc. for the six-month period ended March 31, 1997, gives
effect to the acquisitions of Sports Image and Motorsport 
                                       7
<PAGE>
Traditions, as if they had occurred on October 1, 1996 using the purchase method
of  accounting  for business  combinations.  The  unaudited  pro forma  combined
financial  information  presented  herein does not purport to represent what the
Company's  actual results of operations  would have been had the acquisitions of
Sports Image and Motorsport  Traditions  occurred on that date or to project the
Company's results of operations for any future period.

                                             Six Months Ended
                                              March 31, 1997
                                              --------------
                                                (Unaudited)

         Net Sales                              $54,948,000

         Operating Income                         7,469,000

         Net Income                               3,651,000

         Net Income Per Common Share                  $0.26


(8)      FINANCING ACTIVITIES

Credit Facility

On January 2, 1997, the Company entered into a $16,000,000  credit facility (the
"Credit Facility") with First Union National Bank of North Carolina.  The Credit
Facility  consists of a revolving line of credit for up to  $10,000,000  through
September 30, 1997,  and up to $6,000,000  from  September 30, 1997 to March 31,
1998  (the  "Line  of  Credit")  and  a  $6,000,000  letter  of  credit/bankers'
acceptances  facility (the "Letter of Credit/BA  Facility").  The Line of Credit
bears  interest,  at the  Company's  option,  at a rate  equal to either (i) the
greater  of (a) the  bank's  publicly  announced  prime  rate or (b) a  weighted
average  Federal  Funds  rate plus 0.5%,  or (ii)  LIBOR plus 1.9%.  The Line of
Credit is  guaranteed  by Sports Image and  Motorsport  Traditions.  The Company
utilized $4,000,000 of the Line of Credit to provide part of the cash portion of
the purchase price for Motorsport Traditions and an additional $4,000,000 of the
Line of Credit to repay a portion of the  $24,000,000  promissory note issued in
connection  with the  acquisition  of Sports  Image.  The  Letter  of  Credit/BA
facility is available for  issuances of letters of credit and eligible  bankers'
acceptances  in an aggregate  amount up to  $6,000,000  to enable the Company to
finance  purchases of products from its overseas  vendors.  The Credit  Facility
will mature on March 31, 1998. The Credit Facility  contains certain  provisions
that,  among other  things,  will  require  the  Company to comply with  certain
financial  ratios and net worth  requirements  and will limit the ability of the
Company and its subsidiaries to incur additional  indebtedness or to sell assets
or engage in certain mergers or consolidations.

Sale of Senior Notes

On January 2, 1997,  the Company  issued an aggregate of  $20,000,000  principal
amount of senior notes (the "Senior  Notes") to three insurance  companies.  The
Senior  Notes  bear  interest  at the  rate of  8.05%  per  annum,  provide  for
semi-annual  payments of accrued  interest,  and will mature on January 2, 1999.
The  Company  may not prepay the Senior  Notes  prior to  maturity,  but will be
required  to offer to redeem  the  Senior  Notes in the  event of a  "Change  of
Control"  of the  Company,  as  defined in the Senior  Notes.  The Senior  Notes
contain certain provisions that, among other things, will require the Company to
comply with certain  financial ratios and net worth  requirements and will limit
the ability of the Company and its subsidiaries to incur additional indebtedness
or to sell  assets or engage in certain  mergers or  consolidations.  The Senior
Notes are  guaranteed  by Sports Image and  Motorsport  Traditions.  The Company
utilized  the  proceeds  from the  Senior  Notes to repay the  remainder  of the
promissory note issued in connection with the acquisition of Sports Image.

(9) COMMITMENTS AND CONTINGENCIES

The Company is subject to certain asserted and unasserted claims  encountered in
the normal course of business.  In the opinion of management,  the resolution of
these matters will not have a material adverse effect on the Company's financial
position or result of operations. 
                                       8
<PAGE>
ITEM 2          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
                RESULTS OF OPERATIONS


Overview

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

   The  Company  was  incorporated  in Arizona  in May 1992 and began  marketing
die-cast collectibles in July 1992. In August 1994, the Company acquired certain
assets  and  liabilities  of Fan  Fueler,  Inc.  and  began  marketing  licensed
motorsports  consumer  products.  During fiscal 1994, the Company also conducted
the  business of staging  M-Car(TM)  Grand Prix Races for  charitable  and other
organizations,   in   which   participating   sponsors   purchased   specialized
gas-powered,  one-third  scale racing  vehicles  from the Company.  In September
1994,  the  Company  sold the assets and  liabilities  related to its  M-Car(TM)
operations and  discontinued  its M-Car(TM) Grand Prix Race  operations.  During
fiscal 1994 and the first two quarters of fiscal 1995, the Company  designed and
marketed pedal, electric, and gas-powered mini vehicles,  primarily as specialty
promotional  items.  The  Company  sold the assets  related to its mini  vehicle
operations in March 1995.

   In November 1996, the Company  acquired  Sports Image and in January 1997 the
Company  acquired  Motorsport  Traditions,  both of which market and  distribute
licensed   motorsports  apparel  and  other  souvenir  items.   Following  these
acquisitions,  the Company took a number of actions  intended to  integrate  the
operations of the acquired companies with the Company's existing  operations and
to reduce overall selling,  general, and administrative expenses associated with
the acquired  entities.  These actions included  consolidating the operations of
Motorsport  Traditions with Sports Image's  existing  operations and facility in
Charlotte,  North Carolina;  reducing the total number of employees in Charlotte
from  201  in  January  1997  to 120 as of May 15,  1997;  and  integrating  the
management  information systems of the acquired companies.  The Company believes
that these  efforts will have a meaningful  impact on the  Company's  results of
operations beginning in the third quarter of fiscal 1997.

   In addition to the anticipated cost savings described above, the Company also
believes that the acquisitions of Sports Image and Motorsport Traditions provide
the potential for enhanced  revenue  opportunities  as a result of the synergies
created by expanded product offerings and additional  distribution channels. For
example,  the  Company  intends to  develop  new lines of  licensed  motorsports
apparel and souvenirs for exclusive  sales  through its  collectors'  club.  The
Company also believes that Sports Image and Motorsport  Traditions  will provide
opportunities  for additional  sales growth of the Company's  die-cast  products
through trackside sales, promotional programs, and fan clubs.

   Prior to the  acquisitions  of Sports Image and  Motorsport  Traditions,  the
Company's revenue consisted primarily of sales of die-cast  collectibles,  while
the revenue of Sports Image and  Motorsport  Traditions  consisted  primarily of
sales of licensed  motorsports apparel and souvenirs.  The Company believes that
the increased sales of licensed apparel and souvenirs following the acquisitions
of Sports Image and  Motorsport  Traditions  will result in lower  overall gross
margins  as a result of lower  gross  margins  generally  associated  with these
acquired product lines. The Company believes,  however, that the effect of these
lower gross margins will be mitigated at least to some extent by cost reductions
and  other  operational  efficiencies  associated  with the  combination  of the
acquired  entities.  The Company also  believes  that gross and net margins will
increase in the future as a result of the license  agreement with Hasbro,  which
provides  the Company with the  opportunity  to  recognize  significant  license
royalties without any significant related cost of sales and without committing
                                       9
<PAGE>
substantial capital for manufacturing and marketing activities. In addition, the
Company believes that its new license arrangement with NASCAR will enhance sales
of its  existing  products  as well as  provide  a number of  opportunities  for
developing new corporate promotional programs and one or more new fan clubs.

   The  Company's  cost of sales  consists  primarily  of the  cost of  products
procured from  third-party  manufacturers,  royalty  payments to licensors,  and
depreciation of tooling and dies.  Significant  factors  affecting the Company's
cost of sales as a percentage of net sales include (i) the overall percentage of
net sales represented by sales of die-cast collectible products, which typically
carry  higher  gross  margins  than  the  Company's  other  products,  (ii)  the
percentage  of sales  of  die-cast  collectible  products  represented  by sales
through the  collectors'  club,  which typically carry higher gross margins than
sales of such products through wholesale  distributors,  and (iii) the effect of
amortizing the fixed cost components of cost of sales, primarily depreciation of
tooling  and dies,  over  varying  levels of net sales.  Selling,  general,  and
administrative  expenses include general corporate  expenses as well as goodwill
amortization.  The Company recorded  goodwill of approximately  $33.7 million in
connection with the acquisition of Sports Image and Motorsport  Traditions.  The
goodwill is being  amortized at the rate of $1.4 million per year over 25 years.
As described above,  the Company  anticipates that it will achieve a significant
reduction in selling,  general,  and administrative  expenses as a percentage of
sales as a result of the cost-reduction efforts taken following the acquisitions
of Sports Image and Motorsport Traditions.

Results of Operations

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

<TABLE>
<CAPTION>
                                          Six Months Ended       Three Months Ended
                                              March 31,               March 31,
                                          ------------------     -------------------
                                           1997        1996       1997         1996
                                           ----        ----       ----         ----
<S>                                       <C>         <C>        <C>          <C>
Sales:
        Collectibles ..................    54.1%       95.9%      48.2%        95.7%
        Apparel and souvenirs .........    42.2%        4.1%      46.4%         4.3%
        Promotional ...................     3.1%        0.0%       4.6%         0.0%
        Other .........................     0.6%        0.0%        .8%         0.0%
                                          ------      ------     ------       ------
          Net sales ...................   100.0%      100.0%     100.0%       100.0%
Cost of sales .........................    60.5%       59.6%      61.9%        59.6%
                                          ------      ------     ------       ------
Gross Profit ..........................    39.5%       40.4%      38.1%        40.4%
Selling, general and administrative 
 expenses .............................    22.4%       22.3%      21.9%        21.5%
                                          ------      ------     ------       ------
Income from operations ................    17.1%       18.1%      16.2%        18.9%
Interest income (expense) and other,net    (1.7%)       0.8%      (1.8%)         .5%
                                          ------      ------     ------       ------
Income before benefit from
 (provision for) income taxes .........    15.4%       18.9%      14.4%        19.4%
Benefit from (provision for)
          income taxes ................    (6.2%)      (7.5%)     (5.8%)       (7.7%)
                                          ------      ------     ------       ------
Net income ............................     9.2%       11.4%       8.6%        11.7%

</TABLE>

Three  Months  Ended March 31, 1997  Compared  with Three Months Ended March 31,
1996

         Net sales increased  189.8% to $28.3 million for the three months ended
March 31, 1997 from $9.8 million for the three months ended March 31, 1996.  The
Company  attributes the improvement in sales during the second quarter of fiscal
1997  primarily  to  (i)  additional  revenue  streams  from  Sports  Image  and
Motorsport  Traditions,  which were acquired by the Company during the first and
second quarters of fiscal 1997,  respectively;  (ii) the continued  expansion of
the die-cast  collectible  market and the Company's  ability to produce and sell
increased quantities of collectibles;  and (iii) an increase in collectors' club
membership.  The  number of  members  in the  collectors'  club  increased  from
approximately  56,000 members to approximately  86,000 members at March 31, 1996
and March 31, 1997, respectively.

         Gross  profit  increased  to $10.8  million for the three  months ended
March 31,  1997,  from $3.9  million for the three  months ended March 31, 1996,
representing 38.1% and 40.4% of net sales,  respectively.  The decrease in gross
profit percentage for the three-month  period ended March 31, 1997 resulted from
the increased  sales of apparel and  souvenirs,  which  typically  provide lower
margins  than sales of the  Company's  collectible  products.  The  decrease was
partially  offset by improved  gross  margins  related to sales of the Company's
die-cast collectibles. 
                                       10
<PAGE>
   Selling, general and adminstrative expenses increased to $6.2 million for the
three-month  period ended March 31, 1997 from $2.1 million for the  three months
ended March 31, 1996,  representing 21.9% and 21.5% of net sales,  respectively.
The increase in such expenses resulted primarily from (i) the operating expenses
of Sports Image and  Motorsport  Traditions,  which the Company  acquired in the
first and second  quarters of fiscal 1997;  (ii)  increased  sales and marketing
expenditures,  particularly  increased advertising consistent with the Company's
strategy to increase  collectors'  club  memberships and distributor  sales; and
(iii) an  increase of $340,000  in  goodwill  amortization  associated  with the
acquisition of Sports Image and Motorsport Traditions.

   The change in  interest  income  (expense)  and  other,  net,  was  primarily
attributable  to an  increase in  interest  expense of $576,000  related to debt
incurred in  connection  with the  acquisitions  of Sports Image and  Motorsport
Traditions.

Six Months Ended March 31, 1997 Compared with Six Months Ended March 31, 1996

   Net sales  increased  144.4% to $43.5  million for the six months ended March
31, 1997 from $17.8 million for the six months ended March 31, 1996. The Company
attributes  the  improvement in sales during the first six months of fiscal 1997
primarily to (i)  additional  revenue  streams from Sports Image and  Motorsport
Traditions,  which  were  acquired  by the  Company  during the first and second
quarters of fiscal  1997,  respectively;  (ii) the  continued  expansion  of the
die-cast  collectible  market and the  Company's  ability  to  produce  and sell
increased quantities of collectibles;  and (iii) an increase in collectors' club
membership.  The  number of  members  in the  collectors'  club  increased  from
approximately  56,000 members to approximately  86,000 members at March 31, 1996
and March 31, 1997, respectively.

   Gross profit  increased  to $17.2  million for the six months ended March 31,
1997 from $7.2  million for the six months  ended March 31,  1996,  representing
39.5% and 40.5% of net sales, respectively.  The decrease in the gross profit as
a percentage of net sales for the six-month period ended March 31, 1997 resulted
from increased  sales of apparel and souvenirs,  which  typically  provide lower
margins  than sales of the  Company's  collectible  products.  The  decrease was
partially  offset by improved  gross  margins  related to sales of the Company's
die-cast collectibles.

   Selling, general and adminstrative expenses increased to $9.8 million for the
six-month period ended March 31, 1997 from $4.0 million for the six-months ended
March 31, 1996,  representing  22.4% and 22.3% of net sales,  respectively.  The
increase in such expenses resulted  primarily from (i) the operating expenses of
Sports Image and Motorsport Traditions,  which the Company acquired in the first
and  second  quarters  of  fiscal  1997;  (ii)  increased  sales  and  marketing
expenditures,  particularly  increased advertising consistent with the Company's
strategy to increase  collectors'  club  memberships and distributor  sales; and
(iii) an  increase of $493,000  in  goodwill  amortization  associated  with the
acquisition of Sports Image and Motorsport Traditions.

   The change in  interest  income  (expense)  and  other,  net,  was  primarily
attributable  to an  increase in  interest  expense of $869,000  related to debt
incurred in  connection  with the  acquisitions  of Sports Image and  Motorsport
Traditions.

Pro Forma Results of Operations

        The Company had pro forma net income for the six months  ended March 31,
1997 of $3.7  million,  or $0.26 per share,  compared  with actual net income of
$4.0 million,  or $0.29 per share. The difference in earnings per share on a pro
forma basis for the six months ended March 31, 1997 is primarily attributable to
lower gross margins as a result of the  liquidation  of inventory  following the
end of the 1996  racing  season by the  acquired  entities  prior to the date of
acquisition.  The  Company  intends to improve  the  management  and  control of
inventories  of the acquired  companies in order to reduce the need for seasonal
adjustments to inventory. The pro forma results of operations for the six months
ended  March 31, 1997  reflect the  amortization  of goodwill  arising  from the
acquisitions  of Sports Image and Motorsport  Traditions and include  additional
interest expense  associated with the financing of these  acquisitions.  The pro
forma results do not account for efficiencies  gained upon the  consolidation of
operations,  including the elimination of duplicative functions and reduction of
salaries expense and other related costs.

Seasonality

   Because the auto racing season is concentrated between the months of February
and November, the second and third calendar quarters of each year (the Company's
third and fourth fiscal quarters) generally are characterized by higher sales of
motorsports products.  The Company believes,  however, that holiday sales of its
products are increasing,  which has the effect of reducing seasonal fluctuations
in its sales. 

Liquidity and Capital Resources

        The Company's  working  capital  position  increased to $19.2 million at
March 31, 1997 from $18.1  million at September  30, 1996.  The increase of $1.1
million is primarily  attributable  to the Company's  results of operations  and
working  capital  acquired  from the  purchase of Sports  Image and  Motorsports
Tradition by the Company.

        Capital  expenditures  for the six months  ended March 31, 1997  totaled
approximately $3.6 million, of which approximately $3.0 million was utilized for
the Company's continued investment in tooling.
                                       11
<PAGE>
        On January 16, 1997,  the Company sold an aggregate of 187,500 shares of
Common Stock to Hasbro,  Inc. at a price of $14.50 per share,  with net proceeds
to the Company of  approximately  $2.6 million.  The Company has agreed that, in
the event that  Hasbro  sells such shares at a price lower than $14.50 per share
during the one-year  period ending on April 16, 1998, the Company will reimburse
Hasbro for the amount of such loss, plus interest.

        During the six months ended March 31, 1997,  the Company  issued 169,998
shares of Common Stock upon the exercise of employee stock options, resulting in
total proceeds to the Company of approximately $747,000.

        In November 1996, the Company purchased  substantially all of the assets
and assumed  certain  liabilities  of Sports Image,  Inc. The purchase price was
approximately  $30.0 million,  consisting of a $24.0 million promissory note due
January 2, 1997 and 403,361 shares of the Company's  Common Stock. On January 2,
1997, the Company repaid the promissory note with the proceeds from the issuance
of senior  notes and a  portion  of the  borrowings  under the  credit  facility
described  below.  The terms of this  acquisition were determined by arms-length
negotiations between  representatives of Sports Image and representatives of the
Company. In fiscal 1996, the Company derived  approximately 16% of its net sales
from Sports Image, a distributor of the Company's die-cast collectible products.

         In January 1997, the Company acquired  substantially  all of the assets
and assumed certain liabilities of Motorsport Traditions Limited Partnership and
acquired all of the capital stock of Creative  Marketing & Promotions,  Inc. for
approximately $13.0 million, consisting of cash in the amount of $5.4 million, a
promissory  note in the principal  amount of $1.6  million,  and an aggregate of
342,857 shares of the Company's Common Stock. The terms of the acquisitions were
determined by arms-length  negotiations  between  representatives of the sellers
and representatives of the Company.

         On January 2, 1997,  the Company  entered into the $16.0 million credit
facility  (the  "Credit  Facility")  with  First  Union  National  Bank of North
Carolina.  The Credit Facility consists of a revolving line of credit (the "Line
of Credit") for up to $10.0  million  through  September 30, 1997 and up to $6.0
million from  September 30, 1997 to March 31, 1998, and a $6.0 million letter of
credit/bankers'  acceptances facility (the "Letter of Credit/BA Facility").  The
Line of Credit  bears  interest,  at the  Company's  option,  at a rate equal to
either (i) the greater of (a) the bank's publicly  announced prime rate or (b) a
weighted average Federal Funds rate plus 0.5%, or (ii) LIBOR plus 1.9%. The Line
of Credit is guaranteed by Sports Image and Motorsport  Traditions.  The Company
utilized  $4.0 million of the Line of Credit to provide part of the cash portion
of the purchase price for Motorsport  Traditions and an additional  $4.0 million
of the Line of Credit to repay a portion of the $24.0  million  promissory  note
issued in  connection  with the  acquisition  of  Sports  Image.  The  Letter of
Credit/BA  Facility is available for issuances of letters of credit and eligible
bankers'  acceptances  in an  aggregate  amount up to $6.0 million to enable the
Company to finance purchases of products from its overseas vendors.  The Company
had outstanding  purchase  commitments of  approximately  $5.4 million under the
Letter of Credit/BA  Facility as of March 31,  1997.  The Credit  Facility  will
mature on March 31, 1998. The Credit Facility contains certain  provisions that,
among other  things,  will require the Company to comply with certain  financial
ratios and net worth  requirements and will limit the ability of the Company and
its subsidiaries to incur additional indebtedness or to sell assets or engage in
certain mergers or consolidations.
                                       12
<PAGE>
         On January 2, 1997,  the Company  issued an aggregate of $20.0  million
principal  amount  of senior  notes  (the  "Senior  Notes")  to three  insurance
companies.  The  Senior  Notes  bear  interest  at the rate of 8.05% per  annum,
provide for semi-annual payments of accrued interest, and will mature on January
2, 1999. The Company may not prepay the Senior Notes prior to maturity, but will
be  required  to offer to redeem the  Senior  Notes in the event of a "Change of
Control"  of the  Company,  as  defined in the Senior  Notes.  The Senior  Notes
contain certain provisions that, among other things, will require the Company to
comply with certain  financial ratios and net worth  requirements and will limit
the ability of the Company and its subsidiaries to incur additional indebtedness
or to sell  assets or engage in certain  mergers or  consolidations.  The Senior
Notes are  guaranteed  by Sports Image and  Motorsport  Traditions.  The Company
utilized  the  proceeds  from the  Senior  Notes to repay the  remainder  of the
promissory note issued in connection with the acquisition of Sports Image.

        The Company is a defendant in various lawsuits.  The Company has made no
provision  in its  financial  statements  with  respect  to these  matters.  The
imposition of damages in one or more of the cases against the Company could have
a material adverse effect on the Company's financial position.

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

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

         This report contains forward-looking  statements,  including statements
regarding the Company's business  strategies,  the Company's  business,  and the
industry in which the Company  operates.  These  forward-looking  statements are
based  primarily on the  Company's  expectations  and are subject to a number of
risks and uncertainties,  some of which are beyond the Company's control. Actual
results could differ materially from the forward-looking  statements as a result
of numerous factors,  including those set forth in the Company's Form 10-KSB for
the year ended  September  30, 1996, as filed with the  Securities  and Exchange
Commission.
                                       13
<PAGE>
         PART II - OTHER INFORMATION

         ITEM 1.  Legal Proceedings

         Litigation and Environmental Matters


                  On May 17, 1993, the state of Arizona (the "State") instituted
                  a lawsuit  against the Company and 29 other  defendants in the
                  United States district Court for the District of Arizona.  The
                  State seeks  recovery of certain  clean-up costs under federal
                  and state  environmental laws.  Specifically,  the State seeks
                  recovery  of  expenses  that it has  incurred  to date  for an
                  environmental  investigation and clean-up of property formerly
                  used as a site  for  recycling  hazardous  wastes.  The  State
                  alleges that the property has been contaminated with hazardous
                  substances.   In  addition,  the  State  seeks  a  declaratory
                  judgment that the Company and the other defendants are jointly
                  and  severally  liable for all future  costs  incurred  by the
                  State for investigative and remedial  activities,  and seeks a
                  mandatory  permanent   injunction  requiring  the  Company  to
                  undertake  appropriate  assessment and remedial  action at the
                  property.  The State has not specified the amounts it seeks to
                  collect from the Company.  The State alleges that F.W. Leisure
                  Industries,   Inc.   and/or  F.W.  &  Associates,   Inc.  were
                  predecessors of the Company that produced and arranged for the
                  transportation  of  hazardardous  substances  to the  property
                  involved in the lawsuit. The Company is defending this lawsuit
                  on various bases including that F.W. Leisure Industries,  Inc.
                  and/or F.W. & Associates,  Inc. were not  predecessors  of the
                  Company and that  neither the Company nor any  predecessor  of
                  the  Company  has  ever  produced  or  transported   hazardous
                  substances  as alleged by the State.  The State has  settled a
                  portion of its claims  with  respect to a large  number of the
                  other defendants to the lawsuit. The Company is not a party to
                  that  settlement.  On  February  1,  1995,  a  number  of  the
                  defendants  that agreed to the settlement  with the State were
                  granted leave to file, and subsequently did file a cross-claim
                  against the company  seeking  indemnity from the Company based
                  on the  same  predecessor  liability  theory  asserted  by the
                  State.  The parties have  conducted  discovery  limited to the
                  issue of any  defendant's  status as a  responsible  party and
                  regarding  the  Company's  status  as a successor corporation.
                  On  March  25,  1997,  the  Court  ruled  that  under  federal
                  environmental   law  the  Company  would  be  treated  as  the
                  successor  to F.W. &  Associates,  Inc.,  and/or F.W.  Leisure
                  Industries,  Inc.  The  Company  may appeal this ruling at the
                  appropriate time.  Discovery is now ongoing with regard to the
                  merits of the underlying  environmental  claims and the amount
                  of those claims. The Company currently estimates the potential
                  range of loss to be between $400,000 and $800,000 in the event
                  that its defense proves unsuccessful.  The Company has made no
                  provision  in its  financial  statements  with respect to this
                  matter.

                  On March 4, 1997, two class action lawsuits were filed against
                  the  Company  and  approximately  28 other  defendants  in the
                  United  States  District  Court for the  Northern  District of
                  Georgia    (Civil    Action    Nos.    1:97-CV-0569-RCF    and
                  1:97-CV-0570-RCF).  The  lawsuits  allege that the  defendants
                  engaged in price fixing and other anti-competitive  activities
                  in violation of federal  anti-trust laws. The Company has been
                  named as a defendant  based upon actions  alleged to have been
                  taken  by  Sports  Image,   Inc.  and  Creative   Marketing  &
                  Promotions,  Inc. prior to the Company's acquisitions of those
                  entities.  The plaintiffs have requested injunctive relief and
                  monetary  damages  of three  times an  unspecified  amount  of
                  damages that the plaintiffs claim to have actually suffered. A
                  motion  to  consolidate  these  lawsuits  into one  action  is
                  pending.  The  Company  intends  to  vigorously  defend  these
                  lawsuits.

         ITEM 2.  Changes in Securities

                  On January 8, 1997,  the Company issued an aggregate of 57,143
                  shares  of  Common  Stock  to  Motorsport  Traditions  Limited
                  Partnership ("MTL") and certain affiliates of MTL as a portion
                  of the consideration  paid by the Company for the business and
                  assets of MTL acquired by the Company. On January 8, 1997, the
                  Company also issued an  aggregate of 285,714  shares of Common
                  Stock  valued at an  aggregate  of  $5,000,000  to  Jeffery M.
                  Gordon  and  Kenneth  R.  Barbee  in  exchange  for all of the
                  outstanding   capital   stock  of   Creative   Marketing   and
                  Promotions, Inc. On January 16, 1997, the Company sold 187,500
                  shares of Common  Stock to Hasbro,  Inc.  at a price of $14.50
                  per share.  The shares of Common  Stock  were  issued  without
                  registration in reliance on the exemption  provided by Section
                  4(2) under the Securities Act of 1933, as amended.

         ITEM 3.  Defaults Upon Securities

                  Not applicable

         ITEM 4.  Submissions of Matters to a Vote of Security Holders

                  Not applicable

         ITEM 5.  Other Information

                  Not applicable
                                       14
<PAGE>
         ITEM 6.  Exhibits and Reports on Form 8-K

                  (a)   Exhibits

                        10.4.2     1993  Stock  Option  Plan,   as  amended  and
                                   restated through January 17, 1997
                        10.39      Asset Purchase  Agreement dated as of January
                                   1, 1997, among Action Performance  Companies,
                                   Inc.,  MTL  Acquisition,   Inc.,   Motorsport
                                   Traditions   Limited   Partnership,   Midland
                                   Leasing,   Inc.,  and  Motorsports  By  Mail,
                                   Inc.(1)
                        10.40      Exchange  Agreement  dated as of  January  1,
                                   1997,  among  Action  Performance  Companies,
                                   Inc.,  Kenneth  R.  Barbee,  and  Jeffery  M.
                                   Gordon(1)
                        10.41      Promissory Note dated January 1, 1997, in the
                                   principal amount of $1,600,000  issued by MTL
                                   Acquisition,  Inc.,  as Maker,  to Motorsport
                                   Traditions  Limited  Partnership,  as  Payee,
                                   together with Guarantee of Action Performance
                                   Companies, Inc.(1)
                        10.42      Note Purchase  Agreement  dated as of January
                                   2, 1997, among Action Performance  Companies,
                                   Inc., Jefferson-Pilot Life Insurance Company,
                                   Alexander  Hamilton Life Insurance Company of
                                   America,  and First  Alexander  Hamilton Life
                                   Insurance  Company,  together  with  form  of
                                   Note, form of Subsidiary  Guaranty,  and form
                                   of Subsidiary Joinder
                        10.43      Credit Agreement dated as of January 2, 1997,
                                   among  Action  Performance  Companies,  Inc.,
                                   Sports Image,  Inc., MTL  Acquisition,  Inc.,
                                   and  First  Union   National  Bank  of  North
                                   Carolina
                        10.44      Registration Agreement dated as of January 1,
                                   1997,  among  Action  Performance  Companies,
                                   Inc.,     Motorsport    Traditions    Limited
                                   Partnership,   Midland  Leasing,   Inc.,  and
                                   Motorsports By Mail, Inc.(1)
                        10.45      Registration Agreement dated as of January 1,
                                   1997,  among  Action  Performance  Companies,
                                   Inc.,  Kenneth  R.  Barbee,  and  Jeffery  M.
                                   Gordon(1)
                        10.46      Employment  Agreement  dated as of January 1,
                                   1997, between Action  Performance  Companies,
                                   Inc. and Kenneth R. Barbee(1)
                        10.47      Consulting  Agreement  dated as of January 1,
                                   1997, between Action  Performance  Companies,
                                   Inc. and John Bickford(1)
                        10.48      Common Stock Purchase Agreement dated January
                                   16,  1997,  between  Hasbro,  Inc. and Action
                                   Performance Companies, Inc.(2)
                        11.1       Computation of Primary Earnings Per Share
                        11.2       Computation  of  Fully  Diluted  Earnings Per
                                   Share
                         27        Financial Data Schedule

                        --------------
                        (1) Incorporated by reference to the  Registrant's  Form
                        8-K dated January 8, 1997  filed with the Securities and
                        Exchange Commission on January 23, 1997,  as amended  by
                        Form 8-K/A  filed on February 24, 1997.

                        (2)   Incorporated  by  reference  to  the  Registrant's
                        Registration  Statement  on Form S-3  (Registration  No.
                        333-22943) as  filed with  the  Securities  and Exchange
                        Commission on  March 7, 1997  and declared  effective on
                        March 12, 1997.

                 (b)Reports on Form 8-K 
                        On January 23, 1997,  the Company filed a Current Report
                        on Form 8-K dated  January 8,  1997,  as amended by Form
                        8-K/A  filed  on  February  24,  1997,   reporting   the
                        acquisition of Motorsport Traditions Limited Partnership
                        and Creative Marketing and Promotions, Inc.
                                       15
<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.

                       ACTION PERFORMANCE COMPANIES, INC.


<TABLE>
<CAPTION>
Signature                                  Capacity                                     Date


<S>                           <C>                                                       <C> 
/s/ Fred W. Wagenhals         Chairman of the Board, President, and                     May 14, 1997
---------------------         Chief Executive Officer      
Fred W. Wagenhals             (Principal Executive Officer)        
                                      


/s/ Christopher S. Besing     Vice President, Chief Financial Officer,                  May 14, 1997
-------------------------     Treasurer, and Director (Principal
Christopher S. Besing         Financial and Accounting Officer)         
</TABLE>