U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

                                    FORM 10-Q

(Mark one)

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

     For the quarterly period ended August 31, 2000 or

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

     For the transition period from __________ to _________.

                         Commission File Number: 0-22889


                              ROYAL PRECISION, INC.
             (Exact Name of Registrant as Specified in Its Charter)


                  Delaware                                        06-1453896
       (State or Other Jurisdiction of                        (I.R.S. Employer
        Incorporation or Organization)                       Identification No.)


15170 North Hayden Road, Suite 1, Scottsdale, AZ                     85260
   (Address of Principal Executive Offices)                       (Zip code)


                                 (480) 627-0200
              (Registrant's Telephone Number, Including Area Code)


             (Former Name, Former Address and Former Fiscal Year if
                           Changed Since Last Report)

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

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

      Title of each class                   Outstanding at October 6, 2000
      -------------------                   -------------------------------

 Common Stock, par value $0.001                    5,678,956 Shares
<PAGE>
                     PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                ROYAL PRECISION, INC. AND SUBSIDIARIES
                 Condensed Consolidated Balance Sheets
                        (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                    AUGUST 31,     MAY 31,
                                                                                      2000          2000
                                                                                    --------      --------
<S>                                                                                <C>            <C>
                                ASSETS
CURRENT ASSETS:
 Cash                                                                              $    470       $     36
 Accounts receivable, net of allowance  for
   doubtful accounts of $313 at August 31, 2000
   and $274 at May 31, 2000, respectively                                             3,031          5,100
 Inventories                                                                          5,688          5,124
 Other current assets                                                                    96            155
 Deferred income taxes                                                                  104            106
                                                                                   --------       --------
       Total current assets                                                           9,389         10,521
                                                                                   --------       --------
PROPERTY, PLANT AND EQUIPMENT:
 Land                                                                                   123            123
 Furniture, fixtures and office equipment                                               546            455
 Buildings and improvements                                                             920            840
 Machinery and equipment                                                              4,414          4,278
 Equipment held for sale                                                                500            500
 Construction in progress                                                             1,102          1,081
                                                                                   --------       --------
                                                                                      7,605          7,277
 Less - Accumulated depreciation                                                     (1,388)        (1,264)
                                                                                   --------       --------
                                                                                      6,217          6,013
                                                                                   --------       --------

GOODWILL, net                                                                         7,519          7,629
                                                                                   --------       --------

DEFERRED INCOME TAXES                                                                   701            701
                                                                                   --------       --------

OTHER ASSETS                                                                             73             78
                                                                                   --------       --------
        Total assets                                                               $ 23,899       $ 24,942
                                                                                   ========       ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Current portion of long-term debt and capital lease obligations                   $    906       $    906
 Accounts payable                                                                     1,248          1,714
 Accrued salaries and benefits                                                          704          1,290
 Accrued pension liability                                                              206            176
 Other accrued expenses                                                                 715            417
                                                                                   --------       --------
        Total current liabilities                                                     3,779          4,503

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, net of current portion                  5,575          6,027
                                                                                   --------       --------
        Total liabilities                                                             9,354         10,530
                                                                                   --------       --------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Preferred stock, $0.001 par value; 1,000,000 shares authorized;
  no shares issued                                                                       --             --
 Common stock, $0.001 par value; 10,000,000 shares authorized;
  5,678,956 shares issued and outstanding at August 31, 2000 and May 31, 2000             6              6
 Additional paid-in capital                                                          13,968         13,940
 Retained earnings                                                                      571            466
                                                                                   --------       --------
       Total stockholders' equity                                                    14,545         14,412
                                                                                   --------       --------
       Total liabilities and stockholders' equity                                  $ 23,899       $ 24,942
                                                                                   ========       ========
</TABLE>
         The accompanying notes are an integral part of these condensed
                          consolidated balance sheets.

                                      -2-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                (dollars in thousands, except per share amounts)

                                                           THREE MONTHS ENDED
                                                       -------------------------
                                                       AUGUST 31,     AUGUST 31,
                                                          2000           1999
                                                       ----------     ----------
NET SALES:
  Golf club shafts                                     $    5,807     $    5,313
  Golf club grips                                           1,171          1,246
                                                       ----------     ----------
                                                            6,978          6,559
                                                       ----------     ----------
COST OF SALES:
  Golf club shafts                                          3,749          3,246
  Golf club grips                                             822            866
                                                       ----------     ----------
                                                            4,571          4,112
                                                       ----------     ----------

      Gross profit                                          2,407          2,447

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                1,997          1,640

AMORTIZATION OF GOODWILL                                      110            121
                                                       ----------     ----------

      Operating income                                        300            686

INTEREST EXPENSE                                              178            151

OTHER INCOME                                                   87             55
                                                       ----------     ----------

      Income before provision for income taxes                209            590

PROVISION FOR INCOME TAXES                                    104            296
                                                       ----------     ----------
      Net income                                       $      105     $      294
                                                       ==========     ==========

BASIC AND DILUTED EARNINGS PER SHARE                   $     0.02     $     0.05
                                                       ==========     ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED
  TO COMPUTE PER SHARE INFORMATION:
    BASIC                                               5,678,956      5,667,555
                                                       ==========     ==========
    DILUTED                                             5,861,306      5,805,795
                                                       ==========     ==========

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

                                      -3-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                                ----------------------------
                                                                 AUGUST 31,       AUGUST 31,
                                                                   2000             1999
                                                                ----------       ----------
<S>                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                      $   105          $   294
 Adjustments to reconcile net income to
   net cash provided by operating activities:
   Depreciation and amortization                                     250              304
   (Gain) loss on retirement or sale of fixed assets                  (3)               7
   Stock based compensation                                           28               --
  Changes in operating assets and liabilities:
    Accounts receivable, net                                       2,069            2,340
    Inventories                                                     (564)            (711)
    Other assets                                                      66              207
    Accounts payable and accrued expenses                           (724)            (596)
                                                                 -------          -------

        Net cash provided by operating activities                  1,227            1,845
                                                                 -------          -------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of machinery and equipment                               (371)            (546)
 Proceeds from sale of fixed assets                                   30               --
                                                                 -------          -------

        Net cash used in investing activities                       (341)            (546)
                                                                 -------          -------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Repayments under lines-of-credit, net                              (225)          (1,036)
 Repayments of long-term debt and capital lease obligations         (227)            (399)
                                                                 -------          -------

        Net cash used in financing activities                       (452)          (1,435)
                                                                 -------          -------

INCREASE (DECREASE) IN CASH                                          434             (136)

CASH, beginning of period                                             36              184
                                                                 -------          -------

CASH, end of period                                              $   470          $    48
                                                                 =======          =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the period for--
  Interest                                                       $   177          $   204
                                                                 =======          =======
  Income taxes                                                   $     1          $    31
                                                                 =======          =======
</TABLE>
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                      -4-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements

1.   OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

     BASIS OF PRESENTATION --

     The condensed  consolidated  financial statements of Royal Precision,  Inc.
     and  subsidiaries  (collectively,  "RP" or the "Company")  presented herein
     have been  prepared  pursuant to the rules of the  Securities  and Exchange
     Commission for quarterly reports on Form 10-Q and do not include all of the
     information  and  note  disclosures   required  by  accounting   principles
     generally  accepted  in the United  States.  These  condensed  consolidated
     financial  statements  should  be read in  conjunction  with the  Company's
     consolidated  financial  statements  and notes  thereto for the fiscal year
     ended May 31, 2000 included in the  Company's  Form 10-K. In the opinion of
     management,  the accompanying  unaudited condensed  consolidated  financial
     statements  include all  adjustments,  consisting of only normal  recurring
     adjustments,   necessary  to  present  fairly  the  consolidated  financial
     position,  results of operations  and cash flows of the Company.  Quarterly
     operating results are not necessarily  indicative of the results that would
     be expected for the full year.

     ORGANIZATION --

     The accompanying  condensed consolidated financial statements include Royal
     Precision, Inc. and its three wholly-owned subsidiaries,  FM Precision Golf
     Manufacturing  Corp.  ("FMP"),  FM Precision Golf Sales Corp. ("FMP Sales")
     and Royal Grip, Inc. ("RG") which has a wholly-owned subsidiary, Royal Grip
     Headwear Company.  All significant  intercompany  balances and transactions
     have been eliminated in consolidation.

     BUSINESS --

     RP is a holding  company which carries on its business  operations  through
     its subsidiaries.  The Company designs,  manufactures and distributes steel
     golf club shafts and designs and  distributes  golf club grips and graphite
     golf club shafts for sale to original equipment  manufacturers ("OEMs") and
     to  distributors  and  retailers  for use in the  replacement  market.  The
     Company's  products  are  sold  throughout  the  United  States  as well as
     internationally,  primarily  in Japan,  Australia,  the United  Kingdom and
     Canada.

     USE OF ESTIMATES --

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally accepted in the United States requires  management to
     make estimates and assumptions  that affect the reported  amounts of assets
     and liabilities and disclosure of contingent  assets and liabilities at the
     date of the  financial  statements  such as the estimate for  impairment of
     long-lived  assets and the reported amounts of revenues and expenses during
     the reporting period. Actual results could differ from those estimates.

2.   EARNINGS PER SHARE:

     The Company  accounts for earnings  per share in  accordance  with SFAS No.
     128,  "Earnings  Per  Share."  Basic  earnings  per  share are based on the
     average  number of common  shares  outstanding  during the period.  Diluted
     earnings per share assumes,  in addition to the above, a dilutive effect of
     common  share  equivalents  during the  period.  Common  share  equivalents
     represent  dilutive  stock  options using the treasury  stock  method.  The
     number of shares used in computing  earnings per share for the three months
     ended August 31, 2000 and August 31, 1999 were as follows (in thousands):

                                      -5-
<PAGE>
                                                            THREE MONTHS ENDED
                                                          ----------------------
                                                          AUGUST 31,  AUGUST 31,
                                                            2000         1999
                                                            -----        -----
     Basic:
       Average common shares outstanding                    5,679        5,668

     Diluted:
       Dilutive effect of stock options                       182          138
                                                            -----        -----
       Average common shares outstanding                    5,861        5,806
                                                            =====        =====

3.   NEW ACCOUNTING PRONOUNCEMENTS:

     During March 2000, the Financial Accounting Standards Board ("FASB") issued
     Interpretation  44,  "Accounting for Certain  Transactions  Involving Stock
     Compensation--an  Interpretation  of APB Opinion No. 25" ("FIN 44"),  which
     among other issues,  addresses  repricing and other  modifications  made to
     previously  issued  stock  options.  The Company  adopted FIN 44 during the
     quarter  ended  August  31,  2000.  As  of  August  31,  2000,  there  were
     outstanding  options to purchase  170,583  shares at an  exercise  price of
     $3.19 per share which are subject to variable  plan  accounting  until they
     are  exercised  or expire in  January  2004.  No  compensation  costs  were
     recognized  during  the  quarter  ended  August 31,  2000  related to these
     options.

     In December 1999, the  Securities  and Exchange  Commission  ("SEC") issued
     Staff  Accounting  Bulletin  ("SAB")  No.  101,  "Revenue   Recognition  in
     Financial  Statements," which was subsequently updated by SAB 101B. SAB 101
     summarizes  certain of the SEC's  views in applying  accounting  principles
     generally accepted in the United States to revenue recognition in financial
     statements.  The  Company  is  required  to adopt SAB 101 no later than the
     fourth  quarter of its fiscal  year  ending May 31,  2001.  The  Company is
     currently  evaluating  the impact of the adoption of SAB 101 on its results
     of operations and financial position.

     In July 2000,  the  Emerging  Issues  Task Force  ("EITF")  reached a final
     consensus on Issue No.  00-10,  "Accounting  for Shipping and Handling Fees
     and Costs" ("EITF No. 00-10").  When adopted,  EITF No. 00-10 requires that
     all amounts  billed to customers in sale  transactions  related to shipping
     and handling be classified as revenue. In addition, EITF No. 00-10 requires
     that shipping and handling fees and costs in financial statements for prior
     periods presented for comparative purposes be reclassified.  EITF No. 00-10
     must be adopted prior to, or concurrent  with, the adoption of SAB 101. The
     Company has elected to early adopt EITF No. 00-10 during its quarter  ended
     August  31,  2000.  As  such,  the  condensed   consolidated  statement  of
     operations  for the three months ended August 31, 1999 has been restated to
     reflect the adoption of EITF No. 00-10.

     In June 1998, the FASB issued Statement of Financial  Accounting  Standards
     ("SFAS") No. 133 (as amended by SFAS No. 138),  "Accounting  for Derivative
     Instruments  and  Hedging   Activities,"  which  requires  that  an  entity
     recognize all  derivatives as either assets or liabilities in the statement
     of financial  position and measure those instruments at fair value. In June
     1999,  the FASB issued SFAS No. 137 which  deferred the  effective  date of
     SFAS No. 133. The Company will be required to adopt SFAS No. 133 during the
     fiscal  year  ending May 31,  2002.  The Company  does not  anticipate  any
     material impact resulting from the adoption of SFAS No. 133.

4.   INVENTORIES:

     Inventories  are valued at the lower of cost or market.  Cost is determined
     on the first-in,  first-out  method.  Inventories as of August 31, 2000 and
     May 31, 2000 consisted of the following (in thousands):

                                                 AUGUST 31, 2000    MAY 31, 2000
                                                 ---------------    ------------
     Raw materials                                    $  495           $  525
     Work-in-process                                   2,255            1,655
     Finished goods                                    2,938            2,944
                                                      ------           ------

                                                      $5,688           $5,124
                                                      ======           ======

                                      -6-
<PAGE>
5.   BORROWING ARRANGEMENTS:

     FMP  has a  credit  facility  consisting  of a term  loan  and a  revolving
     line-of-credit. The FMP term loan of $2.5 million at August 31, 2000 is due
     in  monthly  principal  installments  of  $65,000  until  its  maturity  in
     September  2002. The amount  available for  borrowings  under the revolving
     line-of-credit is based upon the levels of eligible FMP accounts receivable
     and  inventories,  as  defined,  subject  to a  maximum  borrowing  of $4.5
     million.  As of August 31, 2000, FMP had $3.3 million outstanding under its
     revolving   line-of-credit   and  $0.6  million  available  for  additional
     borrowings. The FMP line-of-credit expires in September 2002.

     RG  has a  credit  facility  consisting  of a  term  loan  and a  revolving
     line-of-credit.  The RG term loan of $0.4 million at August 31, 2000 is due
     in  monthly  principal  installments  of  $10,500  until  its  maturity  in
     September  2002. The amount  available for  borrowings  under the revolving
     line-of-credit is based upon the levels of eligible RG accounts  receivable
     and  inventories,  as  defined,  subject  to a  maximum  borrowing  of $1.5
     million.  As of August 31, 2000, RG had $0.3 million  outstanding under its
     revolving   line-of-credit   and  $0.5  million  available  for  additional
     borrowings. The RG line-of-credit expires in September 2002.

     Borrowings  under the term  loans  and  revolving  lines-of-credit  of both
     credit facilities bear interest at a rate per annum equal to the prime rate
     (9.5% at August  31,  2000) plus  0.75% and  0.25%,  respectively,  and are
     secured by substantially all of the Company's assets.

     The FMP and RG  credit  facilities  contain  certain  financial  and  other
     covenants which, among other things,  limit annual capital expenditures and
     dividends  and require the  maintenance  of minimum  monthly and  quarterly
     earnings and minimum  quarterly debt service coverage  ratios,  as defined.
     The Company was in compliance  with all financial  loan covenants at August
     31, 2000.

6.   INFORMATION ON SEGMENTS:

     The Company  has two  reportable  segments:  golf club shafts and golf club
     grips.  The  accounting  policies  of the  segments  are the  same as those
     described in the summary of  significant  accounting  policies in Form 10-K
     for the  fiscal  year  ended  May  31,  2000.  The  Company  evaluates  the
     performance of these segments based on segment operating income or loss and
     cash  flows.  The  Company  allocates  certain  administrative  expenses to
     segments.  The amounts in this illustration are the amounts in reports used
     by the chief operating officer (in thousands):

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED AUGUST 31, 2000
                                                    -------------------------------------
                                                    GOLF CLUB      GOLF CLUB
                                                     SHAFTS          GRIPS         TOTAL
                                                    --------       --------      --------
<S>                                                 <C>            <C>           <C>
     Net sales                                      $  5,807       $  1,171      $  6,978
     Operating income                                    239             61           300
     Depreciation and amortization                       128            122           250

     Total assets for reportable segments           $ 12,925       $ 16,990      $ 29,915
     Elimination of investment in subsidiaries                                     (6,016)
                                                                                 --------
     Consolidated total assets                                                   $ 23,899
                                                                                 ========
</TABLE>

                                      -7-
<PAGE>
<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED AUGUST 31, 1999
                                                    -------------------------------------
                                                    GOLF CLUB      GOLF CLUB
                                                     SHAFTS          GRIPS         TOTAL
                                                    --------       --------      --------
<S>                                                 <C>            <C>           <C>
     Net sales                                      $  5,313       $  1,246      $  6,559
     Operating income                                    603             83           686
     Depreciation and amortization                        87            217           304

     Total assets for reportable segments           $ 10,922       $ 18,144      $ 29,066
     Elimination of investment in subsidiaries                                     (6,193)
                                                                                 --------
     Consolidated total assets                                                   $ 22,873
                                                                                 ========
</TABLE>

7.   ENVIRONMENTAL MATTERS:

     In May 1996, the Company acquired  substantially all the assets of the golf
     club shaft manufacturing  business of Brunswick Corporation (the "Brunswick
     Acquisition").  Included in the acquired  assets were land,  buildings  and
     equipment at the Company's Torrington,  Connecticut  manufacturing facility
     (the "FMP plant"). In conjunction with the Brunswick Acquisition, Brunswick
     Corporation  agreed to  indemnify  the  Company  from  potential  liability
     arising  from  certain  environmental  matters  and  to  remediate  certain
     environmental  conditions  which  existed  at the FMP  plant on the date of
     acquisition.  Brunswick Corporation has engaged an environmental consulting
     firm  to  perform  testing  at the  FMP  plant  and is in  the  process  of
     developing  a plan of  remediation.  Failure of  Brunswick  Corporation  to
     fulfill its  obligations  under the asset  purchase  contract  could have a
     material adverse effect on the Company's financial condition and results of
     operations.

     The  Company  received  a notice  of  violation  ("NOV")  from the State of
     Connecticut   Department  of  Environmental   Protection  ("DEP")  alleging
     violation of certain  provisions  of a permit  related to the  discharge of
     treated  wastewater at the FMP plant. This permit was issued to the Company
     in February 1997 based on an application prepared by Brunswick  Corporation
     in April 1996. In April 2000,  the Company  reached a settlement  agreement
     with DEP  discharging  the Company from any civil liability with respect to
     the  allegations in the NOV,  subject to completion and approval of certain
     remedial measures at the FMP plant. The Company incurred approximately $0.2
     million in capital  expenditure to complete these remedial  measures during
     the  fiscal  year  ended  May 31,  2000  and,  in  June  2000,  obtained  a
     certification  from DEP that the  work was  satisfactorily  completed.  The
     Company is seeking reimbursement from Brunswick Corporation for the cost of
     remediation and legal fees incurred in conjunction with this matter.

     In April 2000, the Company received a request for information from the U.S.
     Environmental  Protection  Agency ("EPA") related to disposal and treatment
     of waste  materials  from the FMP plant  during a period from 1982 to 1997.
     The EPA is  currently  conducting  an  investigation  regarding  the former
     National Oil  Services,  Inc.  Superfund  site in West Haven,  Connecticut.
     National Oil Services, Inc. was, prior to its bankruptcy, a contractor used
     by  the  Company  and  Brunswick   Corporation  to  treat  and  dispose  of
     non-hazardous waste oils from the FMP plant. EPA has not issued any demands
     for  reimbursement or performance of work from the Company relating to this
     matter and there is not  sufficient  information  at this time to determine
     what, if any, action EPA may pursue and what, if any, effect it may have on
     the Company's financial condition and results of operations.

8.   ACQUISITION LETTER OF INTENT:

     On September 18, 2000,  the Company signed a letter of intent to acquire PH
     Group Inc.  ("PHG"),  a  manufacturer  of hydraulic  presses and  injection
     molding  machines.  Under the terms of the  transaction,  PHG  shareholders
     would receive $1.00 worth of Royal  Precision,  Inc.  common stock for each
     share of PHG common stock they own. The proposed  acquisition is subject to
     a number of  conditions  including the execution and delivery of definitive
     agreements  acceptable  to both  parties,  approval  of the  boards  of the
     Company and PHG, and the approval of PHG  shareholders.  In connection with
     the execution of the letter of intent, PHG granted the Company an option to
     acquire  500,000  shares of PHG common stock at an exercise  price of $0.50
     per share.

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

FORWARD LOOKING STATEMENTS --

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking  statements. The Company has made forward-looking statements
within the meaning of the Litigation  Reform Act in this Form 10-Q which reflect
the  Company's  current  views  with  respect  to future  events  and  financial
performance.  These forward-looking  statements are subject to uncertainties and
other  factors that could cause actual  results to differ  materially  from such
statements.  These uncertainties and other factors include,  but are not limited
to,  uncertainties  relating  to  international,  national,  and local  economic
conditions,   the  Company's  dependence  on  discretionary  consumer  spending,
customer  concentration and their plans and commitments,  the Company's cost and
available  supply of raw  materials,  the  competitive  environment in which the
Company  operates,  the  timeliness  and market  acceptance of the Company's new
product  introductions,  the Company's limited operating history,  the Company's
ability to protect  its  intellectual  property  rights,  seasonality  of sales,
fluctuations in operating results, and changes in the financial markets relating
to the Company's capital structure and cost of capital.  Statements in this Form
10-Q,  including the Notes to the Condensed  Consolidated  Financial  Statements
("Financial  Statements") and Management's  Discussion and Analysis of Financial
Condition and Results of Operations  describe factors,  among others, that could
contribute  to or cause such  differences.  Additional  factors that could cause
actual results to differ materially from those expressed in such forward-looking
statements are detailed in the Company's Form 10-K for the fiscal year ended May
31,  2000  (refer to  Exhibit  99.1  therein).  The words  "believe,"  "expect,"
"anticipate,"   "project,"  and  similar  expressions  identify  forward-looking
statements, which speak only as of the date the statement was made.

OVERVIEW --

Royal Precision, Inc. ("RP" or the "Company") is a holding company which carries
on its business operations through its three wholly-owned subsidiaries which are
FM Precision Golf  Manufacturing  Corp.  ("FMP"),  FM Precision Golf Sales Corp.
("FMP Sales"), and Royal Grip, Inc. ("RG") which has a wholly-owned  subsidiary,
Royal Grip Headwear Company.

The Company  designs,  manufactures  and distributes  steel golf club shafts and
designs and  distributes  golf club grips and graphite golf club shafts for sale
to original equipment  manufacturers  ("OEMs") and to distributors and retailers
for use in the replacement  market.  The Company's  products are sold throughout
the United States as well as internationally, primarily in Japan, Australia, the
United Kingdom and Canada.

The  Company  principally  operates  in the golf  equipment  industry  which has
historically  been seasonal in nature with consumer demand for product being the
strongest during the spring and summer months.

THREE MONTHS ENDED AUGUST 31, 2000 COMPARED TO THE THREE MONTHS ENDED AUGUST 31,
1999--

NET  SALES.  Net sales for the three  months  ended  August  31,  2000 were $7.0
million, an increase of $0.4 million or 6% over net sales of $6.6 million during
the  corresponding  period in 1999.  Net sales of golf club shafts  increased by
$0.5  million  or 9% and net sales of golf club grips  were  consistent  at $1.2
million.

COST OF SALES. Cost of goods sold for the three months ended August 31, 2000 was
$4.6 million, an increase of $0.5 million or 11% over cost of goods sold of $4.1
million  during the  corresponding  period in 1999. The cost of golf club shafts
sold  increased by $0.5 million or 16% as a result of higher total net sales and
a change in the mix of products  sold during the two  periods.  The cost of golf
club grips sold was consistent at $822,000 and $866,000  during the  three-month
periods ended August 31, 2000 and 1999, respectively.

                                      -9-
<PAGE>
GROSS  PROFIT.  Gross profit for the three months ended August 31, 2000 and 1999
was consistent at $2.4 million.  Gross profit from sales of golf club shafts was
consistent at $2.1 million.  As a percentage of sales, the gross profit on sales
of golf club  shafts  decreased  from 39% to 35% due  principally  to the mix of
products sold during the two periods.  Sales of a pro grade shaft,  which is not
subject to the Company's Frequency Coefficient Matching ("FCM") technology,  and
is sold at a lower price and a lower profit margin than the Company's  other pro
grade products totaled  approximately $1.0 million,  or 18% of total shaft sales
during the three months ended August 31, 2000.  Sales of this product during the
corresponding  period in 1999 were  approximately  $0.4 million,  or 7% of total
shaft  sales.  Gross  profit  from  sales of golf club grips was  consistent  at
$349,000 and $380,000 during the  three-month  periods ended August 31, 2000 and
1999, respectively.  As a percentage of sales, the gross profit on sales of golf
club grips was consistent at 30%.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative  expenses  for the three  months  ended August 31, 2000 were $2.0
million, an increase of 22% over selling, general and administrative expenses of
$1.6 million during the  corresponding  period in 1999. The $357,000 increase is
primarily  due to costs  associated  with a  television  commercial  advertising
campaign  which  commenced  in January  2000.  Costs of  purchased  airtime  and
development  of  commercials  totaled  approximately  $219,000  during the three
months ended August 31, 2000 compared to $0 during the  corresponding  period in
1999.

AMORTIZATION  OF  GOODWILL.  Amortization  of goodwill  was  consistent  at $0.1
million during the three-month periods ended August 31, 2000 and 1999.

INTEREST  EXPENSE.  Interest  expense  increased from $151,000  during the three
months  ended  August 31, 1999 to $178,000  during the three months ended August
31, 2000 primarily due to a 1.25% increase in the prime lending rate.

OTHER  INCOME.  Other  income of $87,000 and $55,000 for the three  months ended
August 31, 2000 and 1999,  respectively,  is principally  comprised of royalties
earned  on sales  of  headwear  products  as well as  royalty  fees  from  other
contracts which license certain Company technology and products.

PROVISION  FOR INCOME  TAXES.  Provisions  of $0.1 million and $0.3 million were
recorded for income taxes during the  three-month  periods ended August 31, 2000
and 1999, respectively.  Taxes are provided based on the estimated effective tax
rate  for  the  year  which  considers  the  effect  of  nondeductible  goodwill
amortization.

LIQUIDITY AND CAPITAL RESOURCES--

At August 31, 2000,  RP had working  capital of $5.6 million and a current ratio
of 2.5 to 1 as compared to working  capital of $6.0 million and a current  ratio
of 2.3 to 1 at May 31, 2000.

FMP  has  a  credit  facility   consisting  of  a  term  loan  and  a  revolving
line-of-credit.  The FMP term loan of $2.5  million at August 31, 2000 is due in
monthly principal  installments of $65,000 until its maturity in September 2002.
The amount available for borrowings under the revolving  line-of-credit is based
upon the levels of eligible FMP accounts receivable and inventories, as defined,
subject to a maximum  borrowing of $4.5 million.  As of August 31, 2000, FMP had
$3.3 million  outstanding  under its revolving  line-of-credit  and $0.6 million
available for additional borrowings. The FMP line-of-credit expires in September
2002.

RG  has  a  credit   facility   consisting  of  a  term  loan  and  a  revolving
line-of-credit.  The RG term loan of $0.4  million at August 31,  2000 is due in
monthly principal  installments of $10,500 until its maturity in September 2002.
The amount available for borrowings under the revolving  line-of-credit is based
upon the levels of eligible RG accounts receivable and inventories,  as defined,
subject to a maximum  borrowing of $1.5  million.  As of August 31, 2000, RG had
$0.3 million  outstanding  under its revolving  line-of-credit  and $0.5 million
available for additional borrowings.  The RG line-of-credit expires in September
2002.

Borrowings  under the term loans and  revolving  lines-of-credit  of both credit
facilities  bear  interest  at a rate per annum equal to the prime rate (9.5% at
August  31,  2000)  plus  0.75% and  0.25%,  respectively,  and are  secured  by
substantially all of the Company's assets.

                                      -10-
<PAGE>
The FMP and RG credit  facilities  contain certain financial and other covenants
which, among other things,  limit annual capital  expenditures and dividends and
require the  maintenance of minimum  monthly and quarterly  earnings and minimum
quarterly  debt  service  coverage  ratios,  as  defined.  The  Company  was  in
compliance with all financial loan covenants at August 31, 2000.

The Company  believes  that its  existing  capital  resources  and credit  lines
available are  sufficient to fund its  operations  and capital  requirements  of
current business segments as presently planned over the next twelve months.

During the three months ended  August 31, 2000,  net cash  provided by operating
activities  was $1.2 million  which  primarily  resulted from net income of $0.1
million,  depreciation  and amortization of $0.3 million and a net collection of
accounts receivable of $2.1 million.  Cash provided by operating  activities was
reduced by an increase in inventories of $0.6 million and a decrease in accounts
payable and accrued expenses of $0.7 million.

Net cash used in investing activities for the three months ended August 31, 2000
was $0.3 million  primarily  for the purchase of machinery  and  equipment.  The
Company  estimates that capital  expenditures for the fiscal year ending May 31,
2001 will be approximately $1.6 million. The Company is assessing its steel golf
club shaft  manufacturing  capacities  compared to the  current and  anticipated
future volume of customer  orders.  Based on this  assessment and the success of
ongoing  projects to increase  production  volumes,  significant  future capital
expenditures  may be  required  at the FMP  manufacturing  facility  to increase
production capacity for pro grade steel golf club shafts.

Net cash used in  financing  activities  for the three  months  ended August 31,
2000, was $0.5 million  resulting from  repayments of long term debt and capital
lease  obligations of $0.2 million and net repayments under  lines-of-credit  of
$0.2  million.  The  Company is  investigating  certain  potential  acquisitions
including  the  acquisition  of PH  Group  Inc.  (see  Note  8).  Any  potential
acquisitions  may require the use of existing capital  resources,  assumption of
debt or  issuance  of new  debt  instruments,  any of  which  could  impact  the
Company's liquidity and capital resources.

ENVIRONMENTAL MATTERS --

In May 1996, the Company acquired  substantially all the assets of the golf club
shaft   manufacturing   business  of  Brunswick   Corporation   (the  "Brunswick
Acquisition").  Included  in  the  acquired  assets  were  land,  buildings  and
equipment at the Company's Torrington,  Connecticut  manufacturing facility (the
"FMP  plant").  In  conjunction  with  the  Brunswick   Acquisition,   Brunswick
Corporation  agreed to indemnify the Company from  potential  liability  arising
from  certain  environmental  matters  and to  remediate  certain  environmental
conditions which existed at the FMP plant on the date of acquisition.  Brunswick
Corporation has engaged an  environmental  consulting firm to perform testing at
the FMP plant and is in the process of developing a plan of remediation. Failure
of Brunswick  Corporation  to fulfill its  obligations  under the asset purchase
contract  could  have a  material  adverse  effect  on the  Company's  financial
condition and results of operations.

The Company received a notice of violation ("NOV") from the State of Connecticut
Department of Environmental  Protection  ("DEP")  alleging  violation of certain
provisions of a permit related to the discharge of treated wastewater at the FMP
plant.  This  permit was  issued to the  Company  in  February  1997 based on an
application prepared by Brunswick  Corporation in April 1996. In April 2000, the
Company reached a settlement agreement with DEP discharging the Company from any
civil  liability  with  respect  to the  allegations  in  the  NOV,  subject  to
completion  and  approval of certain  remedial  measures  at the FMP plant.  The
Company incurred  approximately $0.2 million in capital  expenditure to complete
these remedial  measures  during the fiscal year ended May 31, 2000 and, in June
2000,  obtained  a  certification  from DEP  that  the  work was  satisfactorily
completed.  The Company is seeking  reimbursement from Brunswick Corporation for
the cost of remediation and legal fees incurred in conjunction with this matter.

In April 2000,  the Company  received a request  for  information  from the U.S.
Environmental  Protection  Agency  ("EPA")  related to disposal and treatment of
waste materials from the FMP plant during a period from 1982 to 1997. The EPA is
currently  conducting  an  investigation   regarding  the  former  National  Oil
Services, Inc. Superfund site in West Haven, Connecticut. National Oil Services,
Inc.  was,  prior  to its  bankruptcy,  a  contractor  used by the  Company  and

                                      -11-
<PAGE>
Brunswick  Corporation to treat and dispose of non-hazardous waste oils from the
FMP plant.  EPA has not issued any demands for  reimbursement  or performance of
work from the  Company  relating  to this  matter  and  there is not  sufficient
information  at this time to determine  what, if any,  action EPA may pursue and
what, if any, effect it may have on the Company's financial condition or results
of operations.

ACQUISITION LETTER OF INTENT --

On September 18, 2000, the Company signed a letter of intent to acquire PH Group
Inc.  ("PHG"),  a  manufacturer  of  hydraulic  presses  and  injection  molding
machines.  Under the terms of the transaction,  PHG  shareholders  would receive
$1.00 worth of Royal  Precision  common stock for each share of PHG common stock
they  own.  The  proposed  acquisition  is  subject  to a number  of  conditions
including the execution and delivery of definitive agreements acceptable to both
parties,  approval of the boards of the Company and PHG, and the approval of PHG
shareholders.  In  connection  with the  execution of the letter of intent,  PHG
granted the Company an option to acquire  500,000  shares of PHG common stock at
an exercise price of $0.50 per share.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DERIVATIVE FINANCIAL INSTRUMENTS,  OTHER FINANCIAL  INSTRUMENTS,  AND DERIVATIVE
COMMODITY INSTRUMENTS.

At August 31, 2000, the Company did not participate in any derivative  financial
instruments or other  financial and commodity  instruments  for which fair value
disclosure would be required under Statement of Financial  Accounting  Standards
No.  107.  The  Company  holds  no  investment  securities  that  would  require
disclosure of market risk.

PRIMARY MARKET RISK EXPOSURE.

The Company's  primary  market risk  exposure  relates to its variable rate debt
obligations that are described in note 5 to the condensed consolidated financial
statements. A one- percent change in the prime lending rate would have an effect
of  approximately  $17,000 on interest expense for the three months ended August
31, 2000.

The  Company  has  entered  into a contract  of  approximately  $0.4  million to
purchase certain manufacturing equipment. This contract is denominated in German
Deutsche Marks.  The Company expects to take delivery of this equipment and make
final  payment under the contract in November  2000.  The Company has not hedged
this transaction as of August 31, 2000 and, accordingly, will be impacted by any
change  in the  exchange  rate  prior  to the  ultimate  settlement  date of the
contract.

                                      -12-
<PAGE>
                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     On November 2, 1999, R. R. Donnelley & Sons Company,  Plaintiff,  vs. Royal
Precision,  Inc.,  Defendant,  was filed in  Superior  Court,  Maricopa  County,
Arizona.  In the matter,  R. R. Donnelley & Sons Company  ("Donnelley")  alleged
that the Company is liable under breach of contract for  approximately  $280,000
in   printing   costs   arising   from  the   preparation   of  a  Joint   Proxy
Statement/Prospectus  related to a proposed merger agreement between the Company
and Coyote Sports,  Inc. which was terminated prior to the effective date of the
merger.  On April 17, 2000,  the court granted the  Company's  motion to dismiss
this suit.  On August 14, 2000, a court  judgment was signed which  provided for
the Company to receive  reimbursement  from Donnelley for its legal fees related
to the suit. In September 2000, the Company  received  payment of  approximately
$24,000 from  Donnelley  and on September 14, 2000,  the appeal period  expired,
bringing a close to this matter.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

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

     (a) The annual meeting of stockholders was held on September 26, 2000.

     (b) Raymond J. Minella and Danny Edwards were elected as directors, each to
serve a term of three years and Richard P. Johnston was elected as a director to
serve for a term of one year.  Other directors  whose terms of office  continued
after the annual  meeting are Charles S. Mechem,  Jr.,  David E.  Johnston,  and
Thomas A. Schneider.

     (c) The only  matters  voted on at the annual  meeting were the election of
directors and approval of an amendment to the Royal  Precision Stock Option Plan
to increase the  aggregate  number of shares in respect to which  options may be
granted under the Plan from 750,000 to 1,500,000.  Results of the voting were as
follows:

     Total  number of shares  entitled  to vote  present or  represented  at the
annual meeting: 3,408,956

     Election of Directors:

                                                 For         Authority Withheld
                                                 ---         ------------------
             Raymond J. Minella               3,342,426            66,530
             Danny Edwards                    3,342,426            66,530
             Richard P. Johnston              3,342,426            66,530

     Approval of amendment to Royal Precision, Inc. Stock Option Plan:

                For           Against           Abstain          Not Voted
                ---           -------           -------          ---------
             2,630,206         85,652             767             692,331

ITEM 5. OTHER INFORMATION.

     None.

                                      -13-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

     (3) Certificate of Incorporation and Bylaws

          Exhibit 3.1.  Amended and Restated  Certificate  of  Incorporation  of
     Royal  Precision,  Inc.  (restated  to  reflect  amendment  filed  with the
     Secretary  of State of  Delaware  on October  19,  1999)  (incorporated  by
     reference  to Exhibit 3.1 of the  Company's  Form 10-Q for the period ended
     November 30, 1999).

          Exhibit  3.2.  Bylaws  of  Royal  Precision,   Inc.  (incorporated  by
     reference to Annex IV to the Company's  Form S-4; No.  333-28841 (the "Form
     S-4")).

     (4) Instruments Defining the Rights of Security Holders

          Exhibit 4. 1. See  Articles  FOUR,  FIVE and SEVEN of the  Amended and
     Restated Certificate of Incorporation at Exhibit 3.1.

          Exhibit  4.2.  See Article I,  Sections  2.1 and 2.2 of Article II and
     Section  7.3  of  Article  VII of  the  Bylaws  of  Royal  Precision,  Inc.
     (incorporated by reference to Exhibit 3.2 to the Form S-4).

     (10) Material Contracts

          Exhibit 10.1.  Royal  Precision,  Inc.  Stock Option Plan (restated to
     reflect amendment adopted by the stockholders on September 26, 2000).

     Exhibit 27.

          Financial Data Schedule (submitted  electronically for SEC information
     only)

(b) Reports on Form 8-K.

     There  were no  reports  on Form 8-K  filed by the  Registrant  during  the
quarter ended August 31, 2000.

                                      -14-
<PAGE>
                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        ROYAL PRECISION, INC.

Date October 6, 2000                    By /s/ Thomas A. Schneider
                                           -------------------------------------
                                           Thomas A. Schneider, President
                                           (duly authorized officer)



                                        By /s/ Kevin L. Neill
                                           -------------------------------------
                                           Kevin L. Neill, Vice President -
                                           Finance (chief financial officer)

                                      -15-
<PAGE>
                                  EXHIBIT INDEX

                                                                       PAGE IN
                                                                    SEQUENTIALLY
                                                                      NUMBERED
EXHIBIT                                                                 COPY
-------                                                                 ----
  3.1      Amended and Restated  Certificate of  Incorporation  of
           Royal Precision,  Inc.  (restated to reflect  amendment
           filed  with  the  Secretary  of State  of  Delaware  on
           October 19, 1999) (incorporated by reference to Exhibit
           3.1  of  the Company's  Form 10-Q for the quarter ended
           November 30, 1999).                                            *

  3.2      Bylaws  of  Royal  Precision,   Inc.  (incorporated  by
           reference  to Annex IV to the  Company's  Form S-4; No.
           333-28841 (the "Form S-4)).                                    *

  4.1      See  Articles  FOUR,  FIVE and SEVEN of the Amended and
           Restated Certificate of Incorporation of the registrant
           at Exhibit 3.1.                                                *

  4.2      See Article I,  Sections  2.1 and 2.2 of Article II and
           Section  7.3 of  Article  VII of the  Bylaws  of  Royal
           Precision,  Inc.  (incorporated by reference to Exhibit
           3.2 to the Form S-4).                                          *

  10.1     Royal  Precision,  Inc.  Stock Option Plan (restated to
           reflect   amendment  adopted  by  the  stockholders  on
           September 26, 2000).                                          17

  27.      Financial Data Schedule  (submitted  electronically for
           SEC information only).                                        38

--------
* Incorporated by reference

                                 -16-