<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended December 31, 2000

                         Commission file number 0-21630

                       ACTION PERFORMANCE COMPANIES, INC.

             (Exact Name of Registrant as Specified in Its Charter)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___

As of February 13, 2001, there were outstanding 16,964,029 shares of the
registrant's Common Stock, par value $.01 per share.
<PAGE>   2
                       ACTION PERFORMANCE COMPANIES, INC.

                           CONSOLIDATED BALANCE SHEETS

                 AS OF DECEMBER 31, 2000 AND SEPTEMBER 30, 2000

                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                                December 31,   September 30,
                                                                                    2000            2000
                                                                                ------------   ------------
                                                                                (Unaudited)
<S>                                                                             <C>            <C>
ASSETS

CURRENT ASSETS:

     Cash and cash equivalents ............................................      $  18,232       $  22,758
     Accounts receivable, net of allowance for
       doubtful accounts of  $3,489 and $3,392, respectively ..............         26,674          22,901
     Inventories ..........................................................         28,404          32,017
     Prepaid royalties ....................................................          8,225           7,262
     Estimated income tax receivable ......................................         17,819          14,000
     Deferred tax asset ...................................................          4,623           5,905
     Prepaid expenses and other assets ....................................          1,562           1,942
                                                                                 ---------       ---------
         Total current assets .............................................        105,539         106,785

PROPERTY AND EQUIPMENT, net ...............................................         49,022          48,204

GOODWILL AND OTHER INTANGIBLES, net .......................................         90,595          94,894

LONG-TERM DEFERRED TAX ASSET ..............................................             --           1,423

OTHER ASSETS, net .........................................................          5,174           4,611
                                                                                 ---------       ---------
                                                                                 $ 250,330       $ 255,917
                                                                                 =========       =========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

     Accounts payable .....................................................      $  13,879       $  16,510
     Accrued royalties ....................................................          8,067           9,998
     Accrued expenses and other ...........................................         12,097          14,250
     Current portion of long-term debt ....................................          1,487           1,503
                                                                                 ---------       ---------
         Total current liabilities ........................................         35,530          42,261
                                                                                 ---------       ---------

LONG-TERM DEBT:

     Convertible subordinated notes .......................................        100,000         100,000
     Other long-term debt .................................................          8,277           8,340
                                                                                 ---------       ---------
         Total long-term debt .............................................        108,277         108,340
                                                                                 ---------       ---------

MINORITY INTEREST .........................................................          2,916           2,598
                                                                                 ---------       ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

     Preferred stock, no par value, 5,000,000 shares
        authorized, no shares issued or outstanding .......................             --              --
     Common stock, $.01 par value, 25,000,000 shares authorized, 16,964,029
        and 16,964,029 shares issued, respectively ........................            170             170
     Additional paid-in capital ...........................................        102,805         102,813
     Treasury stock at cost, 772,000 and 592,000 shares, respectively .....         (7,049)         (6,520)
     Accumulated other comprehensive loss .................................         (5,140)         (6,639)
     Retained earnings ....................................................         12,821          12,894
                                                                                 ---------       ---------
         Total shareholders' equity .......................................        103,607         102,718
                                                                                 ---------       ---------
                                                                                 $ 250,330       $ 255,917
                                                                                 =========       =========
</TABLE>


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


                                       2
<PAGE>   3
                       ACTION PERFORMANCE COMPANIES, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

           FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 2000 AND 1999

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                           2000          1999
                                                         --------      --------
<S>                                                      <C>           <C>
Sales:
     Collectibles .................................      $ 30,079      $ 35,843
     Apparel and souvenirs ........................        18,562        26,821
     Other ........................................         1,613         2,117
                                                         --------      --------
         Net sales ................................        50,254        64,781

Cost of sales .....................................        32,172        44,886
                                                         --------      --------

Gross profit ......................................        18,082        19,895

Operating expenses:
     Selling, general and administrative expenses .        14,867        20,347
     Amortization of goodwill and other intangibles         1,753         1,896
                                                         --------      --------
         Total operating expenses .................        16,620        22,243
                                                         --------      --------

Income (loss) from operations .....................         1,462        (2,348)

Other income (expense):
     Minority interests in earnings ...............          (318)         (210)
     Interest income and other, net ...............           178           778
     Interest expense .............................        (1,445)       (1,739)
                                                         --------      --------
         Total other income (expense), net ........        (1,585)       (1,171)
                                                         --------      --------

(Loss) before (benefit) from income taxes .........          (123)       (3,519)

(Benefit from) income taxes .......................           (50)       (1,390)
                                                         --------      --------

NET (LOSS) ........................................           (73)       (2,219)
                                                         --------      --------
     Other comprehensive income (loss) - currency
       translation adjustment .....................         1,499        (1,242)
                                                         --------      --------
     Comprehensive income (loss) ..................      $  1,426      $ (3,371)
                                                         ========      ========

NET (LOSS) PER COMMON SHARE:

     Basic ........................................      $  (0.00)     $  (0.13)
                                                         ========      ========
     Diluted ......................................      $  (0.00)     $  (0.13)
                                                         ========      ========

WEIGHTED AVERAGE SHARES OUTSTANDING:

     Basic ........................................        16,243        16,909
                                                         ========      ========
     Diluted ......................................        16,243        16,909
                                                         ========      ========
</TABLE>

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


                                       3
<PAGE>   4
                       ACTION PERFORMANCE COMPANIES, INC.

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        2000           1999
                                                                                      --------       --------
<S>                                                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net  (loss) ....................................................................      $    (73)      $ (2,129)
     Adjustments to reconcile net (loss) to
        net cash (used in) provided by operating activities:

     Deferred income taxes .....................................................         2,704             --
     Depreciation and amortization .............................................         6,216          6,186
     Undistributed earnings to minority shareholders ...........................           318            210
     Change in assets and liabilities, net of businesses acquired:
         Accounts receivable ...................................................        (3,502)         2,226
         Estimated income tax receivable .......................................        (3,819)            --
         Inventories ...........................................................         3,880          3,367
         Prepaid royalties .....................................................          (955)        (2,093)
         Prepaid expenses and other assets .....................................           (89)         1,977
         Accounts payable ......................................................        (3,013)        (9,790)
         Accrued royalties .....................................................        (1,941)        (5,982)
         Accrued expenses and other ............................................          (956)        (4,466)
                                                                                      --------       --------
              Net cash (used in) operating activities ..........................        (1,230)       (10,494)
                                                                                      --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:

     Purchases of property and equipment .......................................        (6,902)        (7,671)
     Proceeds from sale of Fantasy Sports, net .................................         3,950             --
     Acquisition of businesses less cash acquired, and other intangibles .......            --         (3,121)
     Collection notes receivable ...............................................            --            145
                                                                                      --------       --------
              Net cash (used in) investing activities ..........................        (2,952)       (10,647)
                                                                                      --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net proceeds from issuance of common stock
        upon exercise of stock options .........................................            --             89
     Repurchase of common stock for treasury ...................................          (529)        (3,532)
     Payments on long-term debt ................................................           (86)          (278)
                                                                                      --------       --------
              Net cash provided by (used in) financing activities ..............          (615)        (3,721)
                                                                                      --------       --------

     Effect of exchange rate changes on cash and cash equivalents ..............           271            187
                                                                                      --------       --------

     Net change in cash and cash equivalents ...................................        (4,526)       (24,675)
     Cash and cash equivalents, beginning of quarter ...........................        22,758         58,523
                                                                                      --------       --------
     Cash and cash equivalents, end of quarter .................................      $ 18,232       $ 33,848
                                                                                      ========       ========
</TABLE>


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


                                       4
<PAGE>   5
                       ACTION PERFORMANCE COMPANIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


(1)      INTERIM FINANCIAL REPORTING

         The accompanying unaudited consolidated financial statements for Action
Performance Companies, Inc. and subsidiaries (the "Company") have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and the instructions to Form 10-Q. In the
opinion of management, all 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 three-month period ended December
31, 2000 are not necessarily indicative of the operating results that may be
expected for the entire year ending September 30, 2001. Certain immaterial prior
period amounts have been reclassified to conform to the December 31, 2000
presentation. These financial statements should be read in conjunction with the
Company's Form 10-K and Form 10-K/A for the fiscal year ended September 30,
2000.

(2)      SUPPLEMENTAL CASH FLOW INFORMATION

         The supplemental cash flow disclosures and non-cash transactions for
the three-month periods ended December 31, 2000 and 1999 are as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                             2000         1999
                                                                           --------      ------
<S>                                                                        <C>            <C>
Supplemental disclosures:
     Interest paid................................................         $  2,682       1,740
     Income taxes paid............................................              117       3,021
Non-cash transactions:
     Debt and liabilities incurred or assumed in acquisitions.....               --       1,133
</TABLE>

(3)      RECENT ACCOUNTING PRONOUNCEMENTS

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB
101) which addresses certain criteria for revenue recognition. SAB 101, as
amended by SAB 101A and SAB 101B, outlines the criteria that must be met to
recognize revenue and provides guidance for disclosures related to revenue
recognition policies. The Company has implemented the applicable provisions of
SAB 101. The impact of adopting the provisions of SAB 101 was not material to
the accompanying financial statements.

         In September 2000, the Emerging Issues Task Force reached a consensus
on Issue 00-10, Accounting for Shipping and Handling Fees and Costs (Issue
00-10). Issue 00-10, requires that all amounts billed to customers related to
shipping and handling should be classified as revenues. In addition, Issue
00-10, specifies that the classification of shipping and handling cost is an
accounting policy decision that should be disclosed pursuant to APB 22,
Disclosure of Accounting Policies. A company may adopt a policy of including
shipping and handling costs in cost of sales. If shipping and handling costs are
not included in costs of sales, a company should disclose both the amount of
such cost and the line item in the statement of operations which includes those
costs. Issue 00-10 will be effective for the Company no later than the fourth
quarter of the fiscal year ending September 30, 2001. The Company has yet to
quantify the impact of adopting Issue 00-10 on Net Sales and on Cost of Sales.

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 133 "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in the Company's contracts)
be recorded in the balance sheet as either an asset or liability measured at its
fair value. The statement requires that changes in the derivative's fair value
be recognized currently in income unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows derivative gains and losses
to offset related results on the hedged item in the statement of operations and
require that the Company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. SFAS No. 133, as
amended by SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities Deferral of the Effective Date of FASB Statement No. 133," shall be
effective for all fiscal quarters of the Company's September 30, 2001 fiscal
year. SFAS No. 133 cannot be applied retroactively. The Company does not expect
that the adoption of this statement will have a material impact on its financial
position or results of operations.


                                       5
<PAGE>   6
(4)      SALE OF FANTASY SPORTS ENTERPRISES, INC.

         On October 15, 1999, the Company acquired substantially all of the
assets and assumed certain liabilities of Fantasy Sports Enterprises, Inc.
("Fantasy Sports") for approximately $3.5 million in cash. Fantasy Sports
operates Fantasy Cup Auto Racing through its Web site at www.fantasycup.com. In
connection with the acquisition, the Company recorded goodwill of approximately
$4.0 million, to be amortized straight-line over a 15 year life. This
transaction was accounted for as a purchase. On November 16, 2000, Fantasy
Sports was sold to Leisure Holdings LTD. for an aggregate sale price of $4.2
million. This transaction resulted in net proceeds to the Company of
approximately $4.0 million, which approximated Fantasy Sports' recorded book
value of net assets.

(5)      SEGMENT REPORTING

         The Company has two reportable segments based on geographic points of
distribution: Domestic and Foreign. The Company's reportable segments are based
on operating divisions operating geographically within the continental United
States as "Domestic" and abroad as "Foreign." The Company evaluates performance
and allocates resources based on segment profits. Segment profits are comprised
of segment net revenues less cost of goods sold and selling, general and
administrative expenses. Excluded from segment profits, however, are
non-recurring costs, interest income, and interest expense. Financial
information for the Company's reportable segments and reconciliation of such
information to the Company's financial statements is as follows:

<TABLE>
<CAPTION>
                                                                   Domestic       Foreign       Total
                                                                   ---------     ---------    ---------
<S>                                                                <C>           <C>          <C>
FOR THE THREE MONTHS ENDED DECEMBER 31, 2000 (IN THOUSANDS)
  Collectibles...................................................  $  23,686     $   6,393    $  30,079
  Apparel and souvenirs..........................................     16,856         1,706       18,562
  Other..........................................................      1,609             4        1,613
                                                                   ---------     ---------    ---------
   Total segment revenue ........................................     42,151         8,103       50,254
   Segment profit ...............................................        787           675        1,462
   Depreciation & amortization included
     in segment profit ..........................................      5,300           916        6,216

FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 (IN THOUSANDS)
  Collectibles...................................................  $  30,944     $   4,899    $  35,843
  Apparel and souvenirs..........................................     25,921           900       26,821
  Other..........................................................      2,117            --        2,117
                                                                   ---------     ---------    ---------
   Total segment revenue ........................................     58,982         5,799       64,781
   Segment profit (loss).........................................     (2,568)          220       (2,348)
   Depreciation & amortization included
     in segment profit (loss)....................................      5,936           250        6,186
</TABLE>

Reconciliation of segment profit (loss) to consolidated income (loss) before
taxes, is as follows: (in thousands)

<TABLE>
<CAPTION>
                                                2000          1999
                                              -------       -------
<S>                                           <C>           <C>
FOR THE THREE MONTHS ENDED DECEMBER 31,
  Segment profits (loss) ...............      $ 1,462       $(2,348)
  Total other income (expense), net ....       (1,585)       (1,171)
                                              -------       -------
  Consolidated (loss) before taxes .....      $  (123)      $(3,519)
                                              =======       =======
</TABLE>


(6)      COMMITMENTS AND CONTINGENCIES

         The Company is a defendant in various lawsuits, including a securities
class action lawsuit filed in November 1999. See "Managements Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources" and Part II, Item 1, "Legal Proceedings." The Company also is subject
to certain asserted and unasserted claims encountered in the normal course of
business. The Company believes that the resolution of these matters will not
have a material adverse effect on the Company's financial position or results of
operations.


                                       6
<PAGE>   7
(7)      RESTRUCTURING CHARGES

         During fiscal year 2000, the company recorded significant charges from
restructuring and other activities. The charges included provisions for the
write-off of goodwill and other assets, endorsements, sponsorship commitments,
employee severance and termination costs, and the withdrawal of the initial
public offering of goracing.com. The initial cash charge of $5.8 million
relating to these restructuring activities have been paid down to $0.7 million
and $0.5 million as of September 30, 2000 and December 31, 2000 respectively.


                                       7
<PAGE>   8
ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                RESULTS OF OPERATIONS

OVERVIEW

         We design and market licensed motorsports products, including die-cast
scaled replicas of motorsports vehicles ("collectible products"), apparel, and
souvenirs. Our vehicles are replicas of cars driven by individual drivers and
are principally NASCAR and NHRA replicas although such vehicles also include
sprint car, CART and Formula One replicas. Third parties manufacture all of our
motorsports vehicles and most of our apparel and souvenirs, generally utilizing
our designs, tools, and dies. We screen print and embroider a portion of the
apparel that we sell in our Atlanta facility. Formula One vehicles and apparel
are designed and marketed in our subsidiaries in Germany and the United Kingdom.

         Sales of collectible products represented approximately 59% and 63% of
net sales in fiscal 2000 and 1999 and sales of apparel and souvenirs represented
approximately 39% and 35% of net sales in such periods.

         Revenue is impacted positively and negatively by: the popularity and
performance of drivers and teams under license, the popularity of motorsports
and NASCAR in particular, and the general demand for licensed sports
merchandise.

         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 our cost of sales as a
percentage of net sales include

         -        the overall percentage of net sales represented by sales of
                  die-cast collectible products, which typically carry higher
                  gross margins than our other products,

         -        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

         -        the effect of amortizing the fixed cost components of cost of
                  sales, primarily depreciation of tooling and dies, over
                  varying levels of net sales.

         -        freight charges.

         -        additional charges related to lower than minimum order
                  quantities, cancellation of specific purchase orders, and
                  discounted sales.


                                       8
<PAGE>   9
 RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                        DECEMBER 31,
                                                                                 ------------------------
                                                                                   2000            1999
                                                                                 -------         --------
<S>                                                                              <C>             <C>
Sales:
     Collectibles sales, net......................................                  59.9%            55.3%
     Apparel and souvenir sales, net..............................                  36.9             41.4
     Other sales, net.............................................                   3.2              3.3
                                                                                 -------         --------
         Net sales................................................                 100.0            100.0
Cost of sales.....................................................                  64.0             69.3
                                                                                 -------         --------
Gross profit......................................................                  36.0             30.7
Selling, general and administrative expenses......................                  29.6             31.4
Amortization of goodwill and other intangibles....................                   3.5              2.9
                                                                                 -------         --------
Income (loss) from operations.....................................                   2.9             (3.6)
Minority interest in earnings.....................................                  (0.6)            (0.1)
Interest income (expense) and other, net..........................                  (2.5)            (1.8)
                                                                                 -------         --------
Income (loss) before (provision) benefit for income taxes.........                  (0.2)            (5.5)
(Provision) benefit for income taxes..............................                   0.1              2.2
                                                                                 -------         --------
Net income (loss).................................................                  (0.1)%           (3.3)%
                                                                                 =======         ========
</TABLE>

THREE MONTHS ENDED DECEMBER 31, 2000 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 1999

         Because the auto racing season is concentrated between the months of
February and November, the second and third calendar quarters of each year (our
third and fourth fiscal quarters) generally are characterized by higher sales of
motorsports products and the first quarter is characterized by lower sales.

         Net sales decreased 22.4% to $50.3 million for the three months ended
December 31, 2000 from $64.8 million for the three months ended December 31,
1999. The decrease in sales was primarily related to a continued softness in
sports licensed merchandise sales, when compared with prior year sales. However,
sales were 10% less than fourth quarter sales which is more consistent with
historical patterns.

         Gross profit decreased to $18.1 million in the first quarter of fiscal
2001 from $19.9 million in the first quarter of fiscal 2000, but increased to
36% from 30.7% of net sales, respectively. The increase in gross profit as a
percentage of net sales resulted from, reduced freight costs and change orders
and increased sales of collectibles which typically provide higher margins than
sales of our apparel and souvenir products.

         Selling, general and administrative expenses decreased to $14.9 million
in the three-month period ended December 31, 2000 from $20.3 million in the
three-month period ended December 31, 1999, and represents 29.6% and 31.4% of
net sales, respectively. Such amounts included severance costs of $0.4 million
in 2001 and costs related to the goracing initial public offering of $2.3
million in fiscal 2000. After considering these specific items, the decrease in
such expenses as a percentage of sales resulted primarily from management and
restructuring changes made in the fourth quarter of fiscal 2000 resulting in
realized costs reductions.

         Amortization of goodwill and other intangibles decreased to $1.8
million for the three-month period ended December 31, 2000 from $1.9 million for
the three-month period ended December 31, 1999. The decrease is related to the
elimination of goodwill and related amortization from the sale of Fantasy
Sports.


                                       9
<PAGE>   10
LIQUIDITY AND CAPITAL RESOURCES


         Our working capital position increased to $70.0 million at December 31,
2000 from $64.5 million at September 30, 2000. The increase of $6.3 million is
primarily attributable to cash provided in operations, and our sale of Fantasy
Sports and capital expenditures.


         Capital expenditures for the three-month period ended December 31, 2000
totaled approximately $6.9 million, related to our continued investment in
tooling of which $3.1 million was applicable to our German subsidiary. We
anticipate that our capital expenditures in fiscal 2001 will principally relate
to expenditures for tooling. Our capital expenditures are not anticipated to
exceed $17 million.

         On January 11, 1999, we acquired all of the outstanding stock of
Goodsports, Holdings, Pty. Ltd., an Australian-based marketer of Formula
One-related apparel and other merchandise. The consideration paid by our company
consisted of the assumption of certain liabilities and contingent payments of up
to $3.6 million to be paid over a four-year period based upon the attainment of
certain performance objectives. We do not believe that any amount will be paid
under these contingent payment commitments.

         On March 28, 2000, we signed a series of sublease agreements whereby a
third-party assumed responsibility for all long-term lease obligations related
to a physical facility and all related computer equipment related to our
discontinued goracing.com operations. We remain the guarantor under the terms of
the original agreement.

         During March 2000, we entered into an agreement with a third party to
provide web-hosting environments for our company. The agreement provides for a
three-year term, however, we terminated the agreement pursuant to its terms
prior to December 2000. Monthly fees under this agreement were $87,000. Also
during March 2000, we entered into a service agreement with our web hosting
provider under which we are committed to purchase $2.0 million worth of normal
business services over a two-year period. As of December 31, 2000, we had
fulfilled approximately $0.9 million of our $2.0 million purchase commitment.

         In December 1999, our Board of Directors approved a program in which we
may repurchase up to $40.0 million of our common stock in the open market or in
privately negotiated transactions. The initial term of the repurchase program
was for one year, subject to extension by the Board of Directors depending on
market conditions.

         We are a defendant in various lawsuits, including a securities class
action lawsuit filed in November 1999. We have not made provisions in the
financial statements with respect to the securities class action lawsuit we are
defending. The settlement of the securities class action lawsuit or the
imposition of any damages in that lawsuit could have a material adverse effect
on our results of operations and financial position.

         From time to time, we also are subject to certain asserted and
unasserted claims encountered in the normal course of business. We believe that
the resolution of these matters will not have a material adverse effect on our
financial position or results of operations. We cannot provide assurance,
however, that damages that result in a material adverse effect on our financial
position or results of operation will not be imposed in these matters.

         On September 29, 2000, we entered into a loan and security agreement
with a subsidiary of Bank One, providing for borrowings of up to $30.0 million,
subject to the limitation of a calculated borrowing base. The loan agreement
replaced our previous credit agreement with First Union National Bank of North
Carolina. The loan agreement consists of a $30.0 million revolving line of
credit, which includes up to $15.0 million of stand-by letters of credit. The
line of credit bears interest at a base rate plus 50 basis points, or LIBOR plus
250 basis points. A commitment fee of 0.5% of the average unused line of credit
and 1.75-2.5% of the average unused letters of credit is payable annually on the
loan. The loan agreement matures December 2002. We had outstanding letters of
credit of approximately $3.9 million as of December 31, 2000 and $4.6 million as
of September 30, 2000. The loan is secured principally by our inventory,
receivables, and equipment and restricts the payment of dividends. The agreement
contains covenants that require us to meet certain financial tests principally
related to tangible net worth and EBITDA. Following our fourth quarter loss, we
were in violation of these covenants. We have received a waiver of these
covenant violations, and an amendment that reduces the assets available to be
included in the calculated borrowing base by $5.0 million. As a result of this
reduction and our intention of reducing outstanding receivables, we believe that
the calculated borrowing base will generally be less than $30.0 million. We
believe that the revised borrowing base will be adequate to cover our letter of
credit and other liquidity needs for the next 12 months after considering
anticipated cash flow from operations and the Federal Tax refund discussed
above. An adverse change in economic conditions could materially affect our
anticipated cash flow from operations.

         We filed a federal income tax return claim in January 2001 of
approximately $17.8 million. We received the tax refund in February 2001.


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<PAGE>   11
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         This report contains forward-looking statements, including statements
regarding our business strategies, our business, and the industry in which we
operate. These forward-looking statements are based primarily on our
expectations and are subject to a number of risks and uncertainties, some of
which are beyond our control. Actual results could differ materially from the
forward-looking statements as a result of numerous factors, including those set
forth in our Form 10-K and Form 10-K/A for the year ended September 30, 2000, as
filed with the Securities and Exchange Commission.


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<PAGE>   12
ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Our exposure to market risk is limited to interest rate risk associated
with our credit instruments and foreign currency exchange rate risk associated
with our foreign operations. We do not currently use and we have not
historically used derivative financial instruments to manage or reduce market
risk.

         At December 30, 2000, we had $100 million outstanding under our
convertible subordinated notes at an interest rate of 4.75%, and approximately
$9.8 million of debt outstanding at various rates and terms, principally under
promissory notes and capital leases. Interest rates on these credit instruments
are fixed and comparable to, or below, current market rates.

         The functional currency for our foreign operations are the Deutschmark,
Australian Dollar and British pound sterling. As such, changes in exchange rates
between those currencies and the U.S. dollar could adversely affect our future
earnings. Given the level of income we currently derive from our foreign
operations, we consider this exposure to be minimal.

           PART II - OTHER INFORMATION

           ITEM 1.  LEGAL PROCEEDINGS

                  On November 30, 1999, a class action lawsuit was filed against
                  our company in the United States District Court for the
                  District of Arizona, case No. CIV'99 2106 PHXROS. Fred W.
                  Wagenhals and Tod J. Wagenhals, directors and officers of our
                  company, and Christopher S. Besing, a former director and
                  officer of our company, also were named as defendants. The
                  lawsuit alleges that our company and the other defendants
                  violated the Securities Exchange Act of 1934 by (a) making
                  allegedly false statements about the state of our business and
                  shipment of certain products to a customer, or (b)
                  participating in a fraudulent scheme that was intended to
                  inflate the price of our common stock. The alleged class of
                  plaintiffs consists of all persons who purchased our publicly
                  traded securities between July 27, 1999 and December 16, 1999.
                  The plaintiffs are requesting an unspecified amount of
                  monetary damages. We have filed a motion to dismiss this
                  lawsuit, which is scheduled to be heard by the court during
                  April 2001. We intend to vigorously defend this lawsuit.

           ITEM 2.  CHANGES IN SECURITIES

                  Not applicable

           ITEM 3.  DEFAULTS UPON SECURITIES

                  Not applicable

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

                  Not applicable

           ITEM 5.  OTHER INFORMATION

                  Not applicable

           ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

                 Not applicable

(b)      Reports on Form 8-K

                 Not applicable


                                       12

<PAGE>   13
                                   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              February 13, 2001
------------------------    Chief Executive Officer
Fred W. Wagenhals          (Principal Executive Officer)


/s/ R. David Martin         Chief Financial Officer, Director                  February 13, 2001
------------------------   (Principal Financial and Accounting Officer)
R. David Martin
</TABLE>


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