
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                    Form 8-K




                Current Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934




       Date of Report (Date of earliest event reported): November 7, 1996




                       ACTION PERFORMANCE COMPANIES, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)





         ARIZONA                       0-21630                  86-0704792
------------------------------   ---------------------     ---------------------
     (State or other             (Commission File No.)     (IRS Employer ID No.)
jurisdiction of incorporation)




                  2401 West First Street, Tempe, Arizona 85281
                  --------------------------------------------
               (Address of principal executive office) (Zip Code)




       Registrant's telephone number, including area code: (602) 894-0100
<PAGE>
                       ACTION PERFORMANCE COMPANIES, INC.

                                CURRENT REPORT ON

                                    FORM 8-K



ITEM 2.           ACQUISITION OR DISPOSITION OF ASSETS.

Acquisition of Sports Image, Inc.

         On  November  7,  1996,  Action   Performance   Companies,   Inc.  (the
"Company"),  through SII Acquisition,  Inc. ("SII"),  a wholly owned subsidiary,
acquired the business and  substantially all of the assets and assumed specified
liabilities of Sports Image, Inc. ("Seller" or "Sports Image"), a North Carolina
corporation  owned  by  seven-time  Nascar  Winston  Cup  Champion  driver  Dale
Earnhardt and his wife. Following the acquisition, SII Acquisition, Inc. changed
its name to Sports Image,  Inc.  Sports Image markets and  distributes  licensed
motorsports  products,  including  apparel and other souvenir  items,  through a
network of wholesale distributors,  trackside events, and fan clubs. The Company
intends to continue to operate the  business of Seller  through its wholly owned
subsidiary.

         The  purchase  price  paid by the  Company  for the  assets  of  Seller
consisted  of (i) a  promissory  note issued by SII in the  principal  amount of
$24.0  million (the  "Purchase  Price  Note"),  and (ii)  403,361  shares of the
Company's  Common Stock (the  "Shares")  valued at $14.875 per share,  which was
slightly less than the closing price per share of the Company's  Common Stock on
November  6, 1996.  The  Purchase  Price Note  bears  interest  at 8% per annum,
matures on January 2, 1997, and is secured by all of the  transferred  assets as
well as the Company's guaranty of SII's obligation under the note. In connection
with the  issuance  of the  Shares,  the  Company  entered  into a  registration
agreement  with  Seller,   Mr.   Earnhardt,   and  Mr.   Earnhardt's  wife  (the
"Registration Agreement").  The Registration Agreement grants the holders of the
Shares  the  right  to  one  "demand"   registration   as  well  as  "piggyback"
registration rights.

         The Company and Mr.  Earnhardt  also entered  into a license  agreement
(the "License  Agreement") pursuant to which the Company has the right to market
licensed motorsports products utilizing the likeness of Dale Earnhardt. Pursuant
to the License  Agreement,  Mr.  Earnhardt also granted the Company the right of
first refusal to make,  have made,  use,  sell, or otherwise  distribute any new
licensable  products  that  Mr.  Earnhardt  becomes  aware of and  approves  for
marketing.  The term of the License  Agreement is 15 years and from year to year
thereafter unless terminated by either party.

         In connection with the acquisition of the assets of Seller, the Company
entered into a three-year employment agreement (the "Employment Agreement") with
Joe Mattes, the principal operating officer of Seller.  Pursuant to the terms of
the  Employment  Agreement,  Mr.  Mattes will serve as the President of SII at a
salary of $225,000 per year. In addition, Mr. Mattes will be eligible to receive
an annual  bonus of up to  $67,500,  as  determined  by the  Company's  Board of
Directors  based upon  factors that it deems  relevant,  including  Mr.  Mattes'
performance. The Company also granted to Mr. Mattes five-year options to acquire
50,000 shares of the Company's  Common Stock at an exercise price of $14.875 per
share. Of the options  granted,  options to acquire 30,000 shares were vested at
the date of grant,  options to acquire  10,000  shares  will vest on November 7,
1997,  and options to acquire the remaining  10,000 shares will vest on November
7, 1998.
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<PAGE>
ITEM 7.           FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
                  EXHIBITS.

         (a)      Financial Statements of Businesses Acquired.

         As  of  the  date  of  filing  of  this  Report  on  Form  8-K,  it  is
impracticable for the Registrant to provide the financial statements required by
this Item 7(a).  In  accordance  with Item 7(a)(4) of Form 8-K,  such  financial
statements  shall be filed by  amendment  to this Form 8-K no later than January
21, 1997.

         (b)      Pro Forma Financial Information.

         As of the date of filing  of this  Current  Report  on Form 8-K,  it is
impracticable for the Registrant to provide the pro forma financial  information
required  by this Item  7(b).  In  accordance  with Item 7(b) of Form 8-K,  such
financial  statements shall be filed by amendment to this Form 8-K no later than
January 21, 1997.

         (c)      Exhibits.


<TABLE>
<CAPTION>
Exhibit No.                                   Description of Exhibit
-----------                                   ----------------------
<S>                    <C>
      10.33            Asset Purchase Agreement dated as of November 7, 1996, among Action Performance
                       Companies, Inc., SII Acquisition, Inc., Sports Image, Inc., and R. Dale Earnhardt and
                       Teresa H. Earnhardt.
      10.34            Promissory Note dated November 7, 1996, in the principal amount of $24,000,000 issued
                       by SII Acquisition, Inc., as Maker, to Sports Image, Inc., as Payee, together with Guarantee 
                       of Action Performance Companies, Inc.
      10.35            Security Agreement dated November 7, 1996, between Sports Image, Inc. and SII
                       Acquisition, Inc.
      10.36            Registration Agreement dated as of November 7, 1996, among Action Performance
                       Companies, Inc., Sports Image, Inc., and R. Dale Earnhardt and Teresa H. Earnhardt.
      10.37            License Agreement dated as of November 7, 1996, among SII Acquisition, Inc., Dale
                       Earnhardt, and Action Performance Companies, Inc.
      10.38            Employment Agreement dated as of November 7, 1996, between Action Performance
                       Companies, Inc. and Joe Mattes.
      21.1             List of Subsidiaries of Action Performance Companies, Inc.
</TABLE>
                                        3
<PAGE>
        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 hereunto duly authorized.

November 21, 1996         ACTION PERFORMANCE COMPANIES, INC.



                          By:/s/ Christopher Besing
                             ---------------------------------------------------
                          Christopher S. Besing
                          Vice President, Chief Financial Officer, and Treasurer
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