<PAGE>   1

                                                                       CONFORMED
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

For the quarterly period ended September 30, 1999  Commission File No. 333-27341

                           TELEX COMMUNICATIONS, INC.
             (Exact name of Registrant as specified in its charter)

           DELAWARE                                       38-1853300
           --------                                       ----------
(State or other jurisdiction of                         (IRS Employer
incorporation or organization)                          Identification No.)

             9600 ALDRICH AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55420
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

       Registrant's telephone number, including area code: (612) 884-4051

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

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 SEPTEMBER 30, 1999 THERE WERE 110 SHARES OF TELEX COMMUNICATIONS,
INC., $0.01 PAR VALUE, OUTSTANDING.


                        THIS DOCUMENT CONTAINS 24 PAGES.

================================================================================


<PAGE>   2


PART I.           FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                           TELEX COMMUNICATIONS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                         SEPTEMBER 30,   DECEMBER 31,
                                                                                             1999           1998
                                                                                         -------------   ------------

                                     ASSETS
Current assets:
<S>                                                                                      <C>             <C>
      Cash and cash equivalents                                                          $   2,600       $   3,431
      Accounts receivable, net                                                              66,264          53,926
      Inventories                                                                           73,106          67,758
      Other current assets                                                                  12,189          10,822
                                                                                         ---------       ---------
           Total current assets                                                            154,159         135,937

Property, plant and equipment, net                                                          48,007          48,275
Deferred financing costs, net                                                               10,558          11,586
Intangible and other assets, net                                                            75,486          77,478
                                                                                         ---------       ---------
                                                                                         $ 288,210       $ 273,276
                                                                                         =========       =========


                     LIABILITIES AND SHAREHOLDER'S DEFICIT
Currrent liabilities:
      Revolving lines of credit                                                          $  22,641       $   5,703
      Current maturities of long-term debt                                                   8,732          10,811
      Accounts payable                                                                      29,547          20,920
      Accrued wages and benefits                                                            11,615           9,156
      Accrued interest                                                                       7,229           6,416
      Other accrued liabilities                                                             14,510          14,158
      Income taxes payable                                                                   6,121           5,200
                                                                                         ---------       ---------
           Total current liabilities                                                       100,395          72,364

Long-term debt                                                                             314,578         321,189
Other long-term liabilities                                                                  9,652           9,810
                                                                                         ---------       ---------
           Total liabilities                                                               424,625         403,363
                                                                                         ---------       ---------

Shareholder's deficit:
      Common stock and capital in excess of par                                              3,121           2,980
      Accumulated other comprehensive loss                                                  (2,716)         (1,400)
      Accumulated deficit                                                                 (136,820)       (131,667)
                                                                                         ---------       ---------
           Total shareholder's deficit                                                    (136,415)       (130,087)
                                                                                         ---------       ---------
                                                                                         $ 288,210       $ 273,276
                                                                                         =========       =========
</TABLE>

                                                     See accompanying notes.




                                       2
<PAGE>   3
                           TELEX COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                  QUARTER ENDED                NINE MONTHS ENDED
                                            ----------------------------  -----------------------------
                                            SEPTEMBER 30,   DECEMBER 31,  SEPTEMBER 30,    DECEMBER 31,
                                                1999           1998           1999             1998
                                            -------------   ------------  ------------     ------------

<S>                                           <C>            <C>            <C>             <C>
Net sales                                     $ 88,411       $ 80,062       $ 254,582       $ 246,342
Cost of sales                                   55,781         52,949         160,751         157,266

                                              --------       --------       ---------       ---------
            Gross profit                        32,630         27,113          93,831          89,076

                                              --------       --------       ---------       ---------
Operating expenses:
     Engineering                                 3,759          3,658          11,169          11,214
     Selling, general and administrative        20,909         16,920          59,033          53,678
     Corporate charges                             429            429           1,287           1,287
     Amortization                                  692            735           2,086           2,118

                                              --------       --------       ---------       ---------
                                                25,789         21,742          73,575          68,297

                                              --------       --------       ---------       ---------
            Operating profit                     6,841          5,371          20,256          20,779
Interest expense                                 9,213          8,961          27,343          27,328
Other income                                    (1,049)        (1,087)         (3,101)         (2,719)

                                              --------       --------       ---------       ---------
Loss before income taxes                        (1,323)        (2,503)         (3,986)         (3,830)
Provision for income taxes                         183            667           1,167           1,222

                                              --------       --------       ---------       ---------
            Net loss                          $ (1,506)      $ (3,170)      $  (5,153)      $  (5,052)
                                              ========       ========       =========       =========
</TABLE>

                            See accompanying notes.

                                       3


<PAGE>   4

                           TELEX COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>

                                                                              NINE MONTHS ENDED
                                                                          ---------------------------
                                                                          SEPTEMBER 30,  DECEMBER 31,
                                                                              1999           1998
                                                                          -------------  ------------
OPERATING ACTIVITIES:
<S>                                                                         <C>            <C>
      Net loss                                                              $ (5,153)      $ (5,052)
      Adjustments to reconcile net loss to cash flows from operations:
           Depreciation, amortization and provision for bad debts             11,116          9,785
           Gain on sale of facilities and product lines                         (766)          (946)
           Stock option compensation expense and special charges                 141           (176)
           Change in operating assets and liabilities                        (10,536)        19,449
           Change in long-term liabilities                                       222           (637)
                                                                            --------       --------
      Net cash provided by (used in) operating activities                     (4,976)        22,423
                                                                            --------       --------

INVESTING ACTIVITIES:
      Additions to property, plant and equipment                              (7,648)        (5,060)
      Proceeds from sale of facilities and product lines                       3,384          1,990
      Cash paid for acquisition, net of cash acquired                                          (255)
      Other                                                                                    (126)
                                                                            --------       --------
      Net cash used in investing activities                                   (4,264)        (3,451)
                                                                            --------       --------

FINANCING ACTIVITIES:
      Borrowings (payments) under revolving lines of credit, net              17,093         (9,964)
      Repayment of long-term debt                                             (8,691)        (6,125)
      Payments for deferred financing costs                                                    (784)
                                                                            --------       --------
      Net cash provided by (used in) financing activities                      8,402        (16,873)
                                                                            --------       --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS:                      7           (892)
                                                                            --------       --------

CASH AND CASH EQUIVALENTS:
      Net increase (decrease)                                                   (831)         1,207
      Beginning of period                                                      3,431          2,224
                                                                            --------       --------
      End of period                                                         $  2,600       $  3,431
                                                                            ========       ========

SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
      Interest                                                              $ 25,648       $ 27,896
                                                                            ========       ========
      Income taxes (refunds), net                                           $    697       $ (7,017)
                                                                            ========       ========
</TABLE>

                            See accompanying notes.



                                       4

<PAGE>   5



                           TELEX COMMUNICATIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.   Telex Communications, Inc., formerly known as EV International, Inc.
     ("Telex" or the "Company"), a Delaware corporation, is a wholly owned
     subsidiary of Telex Communications Group, Inc. ("Holdings"). As used in
     these consolidated financial statements, unless otherwise indicated or the
     context otherwise requires, references to (i) "Holdings" shall mean Telex
     Communications Group, Inc., a Delaware corporation and the corporate parent
     of the Company; (ii) "Old Telex" shall refer to the Delaware corporation
     formerly named Telex Communications, Inc., a wholly owned subsidiary of
     Holdings, and its subsidiaries with respect to periods prior to the Mergers
     (as defined in Item 2); (iii) the "Company" or "Telex" shall mean Telex
     Communications, Inc., a Delaware corporation formerly named EV
     International, Inc. ("EVI") and successor by merger to Old Telex, and its
     subsidiaries and includes, as the context may require, predecessor and
     successor companies; and (iv) "Old EVI" shall mean EVI and its subsidiaries
     with respect to periods prior to the Mergers and includes any predecessor
     companies.

     The condensed consolidated balance sheet as of September 30, 1999 and the
     condensed consolidated statements of operations and cash flows for the
     quarters and nine months ended September 30, 1999 and December 31, 1998
     have been prepared by the Company without being audited, pursuant to the
     rules and regulations of the Securities and Exchange Commission ("SEC").
     Effective December 31, 1998 the Company changed its fiscal year end to
     December 31 from March 31. The management's discussion and analysis that
     follows compares the results, which are not materially affected by seasonal
     fluctuations, for the third quarter ended September 30, 1999 with the prior
     year's third fiscal quarter ended December 31, 1998. The results for the
     prior year's nine months ended September 30, 1998 contain certain
     Merger-related costs and expenses, some of which are not easily
     quantifiable. Therefore, the Company believes that for purposes of
     management's discussion and analysis, a comparison of the financial results
     for the third quarter and nine months ended September 30, 1999 with the
     results for the third fiscal quarter and nine months ended December 31,
     1998 is more meaningful than a comparison with the results for the quarter
     and nine months ended September 30, 1998, which includes a similar calendar
     quarter from two prior fiscal years ago.

     In the opinion of management, these financial statements reflect all
     adjustments (which include only normal recurring accruals) necessary to
     present fairly the financial position of Telex at September 30, 1999 and
     the results of its operations and cash flows for all periods presented.

     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted. Therefore, these statements
     should be read in conjunction with the more detailed information, risk
     factors and financial statements, including the related notes, included in
     the Registration Statements on Form S-4 filed by Old Telex and Old EVI with
     the SEC on September 5, 1997 and July 30, 1997, respectively, and the Form
     10-K for the transition period from April 1, 1998 to December 31, 1998
     filed by Telex with the SEC on March 31, 1999 (the "Form 10-K"). Unless
     otherwise defined herein, capitalized terms shall have the meaning set
     forth in the Form 10-K.

     The results of operations for interim periods are not necessarily
     indicative of results which will be realized for the full fiscal year.


                                       5
<PAGE>   6


2.   Inventories consist of the following, in thousands (unaudited):

                                September 30,       December 31,
                                    1999               1998
                                    ----               ----

     Raw materials and parts      $33,272             $32,667
     Work in process               11,885              10,690
     Finished products             27,949              24,401
                                  -------             -------
                                  $73,106             $67,758
                                  =======             =======

3.   Telex's tax provision is calculated on a separate company basis, and
     Telex's taxable income is included in the consolidated federal income tax
     return of Holdings. The Company has recorded a liability to Holdings for
     the tax benefit Telex received from Holdings which is included in other
     long-term liabilities.

4.   The Company recorded an income tax provision of $0.2 million and $1.2
     million on pre-tax losses of $1.3 million and $4.0 million for the quarter
     and nine months ended September 30, 1999, respectively. The income tax
     provision for the nine months ended September 30,1999 is comprised of a
     U.S. Federal income tax benefit of $2.3 million which is offset by a
     deferred tax valuation allowance of $2.3 million and an income tax
     provision of $1.2 million attributed to income of certain foreign
     subsidiaries for the nine months ended September 30, 1999.

     The Company has a net deferred tax valuation allowance of $18.0 million at
     September 30, 1999 due to the uncertainty of the realization of future tax
     benefits. Included in this valuation allowance is $2.3 million charged to
     the income tax provision for the nine months ended September 30, 1999. The
     realization of the future tax benefits related to the deferred tax assets
     is dependent on many factors, including the Company's ability to generate
     taxable income within the net operating loss carry forward period.
     Management has considered these factors in reaching its conclusion as to
     the adequacy of the valuation allowance for financial reporting purposes.

5.   Effective April 1, 1998, the Company adopted SFAS No. 130, "Reporting
     Comprehensive Income." This statement established standards for reporting
     and display of comprehensive income and its components. Comprehensive
     income reflects the change in equity of a business enterprise during a
     period from transactions and other events and circumstances from non-owner
     sources. For the Company, comprehensive net income or loss represents net
     income or loss adjusted for foreign currency translation adjustments and
     minimum pension liability adjustment. Comprehensive net income was $0.1
     million for the quarter ended September 30, 1999. Comprehensive net loss
     was $6.5 million for the nine months ended September 30, 1999.
     Comprehensive net loss was $2.9 million and $4.1 million for the quarter
     and nine months ended December 31, 1998, respectively.

6.   Segment Information:

     Subsequent to the Mergers, the Company reorganized what had been classified
     as Old Telex's four strategic business units and Old EVI's four principal
     lines of business into the following two business segments:

     Professional Sound and Entertainment

     Professional Sound and Entertainment includes Old EVI's three principal
     lines of business within the overall professional audio market: (i) Fixed
     Installation; (ii) Professional Music Retail; and (iii)
     Concert/Recording/Broadcast, and Old Telex's Broadcast Communications
     Systems and Sound Reinforcement product groups (these businesses were
     previously part of

                                       6
<PAGE>   7

     Old Telex's Professional Sound and Entertainment Group).

     Multimedia/Audio Communications

     Multimedia/Audio Communications includes all of Old Telex's
     Multimedia/Audio Communications, RF/Communications and Hearing Instruments
     Groups, the Tape Duplication product group from Old Telex's Professional
     Sound and Entertainment Group, and Old EVI's Other Applications line of
     business, consisting of handheld microphones and earphones for field and
     aircraft communications, both military and civilian, equipment for
     high-speed duplication of audio tapes, and components marketed to original
     equipment manufacturers for incorporation into their products.

     The amounts in the following tables have been presented to coincide with
     the new business segments (in thousands).


                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>

                                                     Professional  Multimedia/
                                                      Sound and       Audio
                                                      Entertain-     Communi-
                                                         ment        cations     Corporate       Total
                                                     ------------  -----------   ---------      --------

<S>                                                    <C>          <C>          <C>            <C>
Net sales                                              $53,255      $35,156      $      -       $ 88,411
Cost of sales                                           32,957       22,824             -         55,781
                                                       -------      -------      --------       --------
     Gross profit                                       20,298       12,332             -         32,630
                                                       -------      -------      --------       --------

Operating expenses:
     Engineering                                             -            -         3,759          3,759
     Selling, general and administrative                     -            -        20,909         20,909
     Corporate charges                                       -            -           429            429
     Amortization of intangibles                             -            -           692            692
                                                       -------      -------      --------       --------
                                                             -            -        25,789         25,789
                                                       -------      -------      --------       --------
Operating profit (loss)                                 20,298       12,332       (25,789)         6,841
Interest expense                                             -            -         9,213          9,213
Other income                                                 -            -        (1,049)        (1,049)
Provision for income taxes                                   -            -           183            183
                                                       -------      -------      --------       --------

Net income (loss)                                      $20,298      $12,332      $(34,136)      $ (1,506)
                                                       =======      =======      ========       ========

Depreciation expense                                   $   815      $   582      $  1,140       $  2,537
                                                       =======      =======      ========       ========

Capital expenditures                                   $   962      $ 1,302      $    104       $  2,368
                                                       =======      =======      ========       ========

                                                       United
                                                       States       Germany         Other          Total
                                                       -------      -------      --------       --------

Net sales                                              $52,849      $ 7,506        28,056         88,411
                                                       =======      =======      ========       ========


</TABLE>


                                       7


<PAGE>   8

             AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>



                                                 Professional    Multimedia/
                                                  Sound and         Audio
                                                  Entertain-       Communi-
                                                     ment          cations      Corporate          Total
                                                 ------------    -----------    ---------        ---------


<S>                                              <C>             <C>            <C>              <C>
Net sales                                          $154,448         $100,134      $      -       $ 254,582
Cost of sales                                        92,800           67,951             -         160,751
      Gross profit                                 --------         --------      --------       ---------
                                                     61,648           32,183             -          93,831
                                                   --------         --------      --------       ---------

Operating expenses:
      Engineering                                         -                -        11,169          11,169
      Selling, general and administrative                 -                -        59,033          59,033
      Corporate charges                                   -                -         1,287           1,287
      Amortization of intangibles                         -                -         2,086           2,086
                                                   --------          -------      --------       ---------
                                                          -                -        73,575          73,575
                                                   --------          -------      --------       ---------
Operating profit (loss)                              61,648           32,183       (73,575)         20,256
Interest expense                                          -                -        27,343          27,343
Other income                                              -                -        (3,101)         (3,101)
Provision for income taxes                                -                -         1,167           1,167
                                                   --------          -------      --------       ---------

Net income (loss)                                  $ 61,648          $32,183      $(98,984)      $  (5,153)
                                                   ========          =======      ========       =========

Depreciation expense                               $  2,237          $ 1,777      $  3,310       $   7,324
                                                   ========          =======      ========       =========

Capital expenditures                               $  3,279          $ 2,637      $  1,732       $   7,648
                                                   ========          =======      ========       =========

Total assets                                       $199,721          $48,019      $ 40,470       $ 288,210
                                                   ========          =======      ========       =========

                                                   United
                                                   States            Germany         Other           Total
                                                   --------          -------      --------       ---------

Net sales                                          $146,531          $21,276      $ 86,775       $ 254,582
                                                   --------          =======      ========       =========

Long-lived assets                                  $123,307          $ 4,968      $  5,776       $ 134,051
                                                   ========          =======      ========       =========
</TABLE>

                                       8
<PAGE>   9
                     FOR THE QUARTER ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>

                                                                   Professional   Multimedia/
                                                                    Sound and       Audio
                                                                    Entertain-     Communi-
                                                                       ment        cations     Corporate       Total
                                                                  ------------   -----------   ---------       -----


<S>                                                                  <C>          <C>          <C>            <C>
 Net sales                                                           $47,940      $32,122      $      -       $ 80,062
 Cost of sales                                                        34,201       18,748             -         52,949
                                                                     -------      -------      --------       --------
       Gross profit                                                   13,739       13,374             -         27,113
                                                                     -------      -------      --------       --------

Operating expenses:
       Engineering                                                         -            -         3,658          3,658
       Selling, general and administrative                                 -            -        16,920         16,920
       Corporate charges                                                   -            -           429            429
       Amortization of intangibles                                         -            -           735            735
                                                                     -------      -------      --------       --------
                                                                           -            -        21,742         21,742
                                                                     -------      -------      --------       --------

 Operating profit (loss)                                              13,739       13,374       (21,742)         5,371
 Interest expense                                                          -            -         8,961          8,961
 Other income                                                              -            -        (1,087)        (1,087)
 Provision for income taxes                                                -            -           667            667
                                                                     -------      -------      --------       --------

 Net income (loss)                                                   $13,739      $13,374      $(30,283)      $ (3,170)
                                                                     =======      =======      ========       ========

 Depreciation expense                                                $   555      $   696      $  1,168       $  2,419
                                                                     =======      =======      ========       ========

 Capital expenditures                                                $   624      $   309      $    506       $  1,439
                                                                     =======      =======      ========       ========

<CAPTION>
                                                                     United
                                                                     States       Germany         Other          Total
                                                                     -------      -------      --------       --------
<S>                                                                  <C>          <C>          <C>            <C>
 Net sales                                                           $46,606      $ 8,503      $ 24,953       $ 80,062
                                                                     =======      =======      ========       ========


</TABLE>
                                       9
<PAGE>   10

              AS OF AND FOR THE NINE MONTHS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>

                                                                          Professional  Multimedia/
                                                                           Sound and       Audio
                                                                           Entertain-     Communi-
                                                                              ment        cations     Corporate          Total
                                                                          ----------   ------------   ---------          -----

<S>                                                                      <C>              <C>          <C>            <C>
 Net sales                                                               $  1582,822      $93,520         $   -         246,342
 Cost of sales                                                                97,711       59,555             -         157,266
                                                                          ----------      -------      --------       ---------
         Gross profit                                                         55,111       33,965             -          89,076
                                                                          ----------      -------      --------       ---------

Operating expenses:
         Engineering                                                               -            -        11,214          11,214
         Selling, general and administrative                                       -            -        53,678          53,678
         Corporate charges                                                         -            -         1,287           1,287
         Amortization of intangibles                                               -            -         2,118           2,118
                                                                            --------      -------      --------       ---------
                                                                                   -            -        68,297          68,297
                                                                            --------      -------      --------       ---------
 Operating profit (loss)                                                      55,111       33,965       (68,297)         20,779
 Interest expense                                                                  -            -        27,328          27,328
 Other income                                                                      -            -        (2,719)         (2,719)
 Provision for income taxes                                                        -            -         1,222           1,222
                                                                            --------      -------      --------       ---------

 Net income (loss)                                                          $ 55,111      $33,965      $(94,128)      $  (5,052)
                                                                            ========      =======      ========       =========

 Depreciation expense                                                       $  2,346      $ 1,788      $  2,650       $   6,784
                                                                            ========      =======      ========       =========

 Capital expenditures                                                       $  1,734      $   892      $  2,560       $   5,186
                                                                            ========      =======      ========       =========

 Total assets                                                               $180,998      $57,495      $ 34,783       $ 273,276
                                                                            ========      =======      ========       =========


<CAPTION>

                                                                            United
                                                                            States        Germany         Other           Total
                                                                            --------      -------      --------       ---------
<S>                                                                      <C>              <C>          <C>            <C>
 Net sales                                                                  $148,454      $22,923      $ 74,965         246,342
                                                                            ========      =======      ========       =========

 Long-lived assets                                                          $126,277      $ 5,564      $  5,498         137,339
                                                                            ========      =======      ========       =========
</TABLE>







7.   During the Fiscal Year ended March 31, 1998, the Company recorded a
     restructuring charge of $6.2 million attributable to the Merger-related
     consolidation of certain product lines, and the consolidation of certain of
     its worldwide manufacturing, engineering, distribution, marketing, service
     and administrative operations to reduce costs, to better utilize the
     available manufacturing and operating capacity and to enhance
     competitiveness. At September 30, 1999, the Company had a restructuring
     reserve balance of $2.6 million. As of September 30, 1999, the Company has
     charged to the restructuring reserve $3.6 million, consisting of $1.6
     million of cash expenditures and $2.0 million of non-cash charges.

8.   In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
     Instruments and Hedging Activities," effective for fiscal years beginning
     after June 15, 2000. SFAS No. 133 establishes accounting and reporting
     standards requiring that every derivative instrument, including certain
     derivative instruments embedded in other contracts, be recorded on the
     balance sheet as either an asset or liability measured at its fair value.
     SFAS No. 133 requires


                                       10
<PAGE>   11

     that changes in the derivative's fair value be recognized currently in
     earnings unless specific hedge criteria are met. Special accounting for
     qualifying hedges allows a derivative's gains or losses to offset related
     results on the hedged item in the income statement and requires that a
     company must formally document, designate and assess the effectiveness of
     transactions that receive hedge accounting. The Company has not quantified
     the impacts of adopting SFAS No. 133 and has not yet determined the timing
     or method of adoption.

9.   On October 29, 1999 the Company amended the terms of its Senior Secured
     Credit Facility ("Facility") with several banks and other financial
     institutions to change certain financial condition covenants and related
     definitions. The new terms include an increase in the borrowing rate of 25
     basis points on the Revolving Credit Facility and Term Loan Facility. The
     cost of the amendment is 37.5 basis points, or approximately $0.5 million,
     on the outstanding commitment of the Revolving Credit Facility and the
     amount outstanding on the Term Loans, plus certain other administrative
     fees. The Company is subject to various financial covenants under the
     amended Facility. The financial covenants include Consolidated EBITDA,
     Consolidated Fixed Charges Ratio, Leverage Ratio, Senior Leverage Ratio and
     limitations on Capital Expenditures.

10.  Subsequent to September 30, 1999 the Company sold substantially all of its
     VEGA wireless intercom, wireless IFB and wireless microphone equipment
     businesses for cash proceeds of approximately $3.2 million, of which $2.8
     million was received at the closing on October 15, 1999, and the remaining
     $0.4 million, held in escrow subject to closing balance sheet adjustments
     and other customary conditions, is to be received in three installments
     extending to March 31, 2001 as conditions are satisfied. The sale is not
     expected to have a material adverse effect on the Company's results of
     operations. In addition, on October 28, 1999 the Company sold land held for
     sale for cash proceeds of $0.7 million which approximates the book value of
     the land.


                                       11

<PAGE>   12


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of
Operations, as well as other sections of this Form 10-Q, may contain
forward-looking statements, including, without limitation, statements relating
to the Company's plans, strategies, objectives and expectations, that are based
on management's current opinions, beliefs, or expectations as to future results
or future events and are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Any such forward-looking
statements involve known and unknown risks and uncertainties and the Company's
actual results may differ materially from those forward-looking statements.
While made in good faith and with a reasonable basis based on information
currently available to the Company's management, there is no assurance that such
opinions or expectations will be achieved or accomplished. The Company does not
undertake to update, revise or correct any of the forward-looking information
contained in this document. The following factors, in addition to those
discussed elsewhere in this Form 10-Q, could affect the future results of the
Company, and could cause results to differ materially from those expressed in
such forward-looking statements: (i) the timely development and market
acceptance of new products; (ii) the financial resources of competitors and the
impact of competitive products and pricing; (iii) changes in general and
industry specific economic conditions on a national, regional or international
basis; (iv) changes in laws and regulations, including changes in accounting
standards; (v) the timing of the implementation of changes in operations to
effect cost savings; (vi) opportunities that may be presented to and pursued by
the Company following the Mergers; (vii) the Company's ability to access
external sources of capital; and (viii) such risks and uncertainties as are
detailed from time to time in the Company's Commission reports and filings.

GENERAL

The following discussion and analysis of the financial condition and results of
operations covers periods after completion of the Transactions (as defined
herein). As a result of the Transactions, the Company has entered into new
financing arrangements and has a different capital structure than its
predecessors, Old EVI and Old Telex. Pursuant to the Recapitalization of Old
Telex on May 6, 1997, the historical basis of all assets and liabilities was
retained for financial reporting purposes, and the repurchase of existing
Holdings Common Stock and issuance of new Holding Common Stock have been
accounted for as equity transactions. The Mergers have been accounted for
essentially as a pooling of interests from May 6, 1997, the date on which Old
EVI and Old Telex came under common control.

Effective December 31, 1998 the Company changed its fiscal year end to December
31 from March 31. The management's discussion and analysis that follows compares
the results, which are not materially affected by seasonal fluctuations, for the
third quarter ended September 30, 1999 with the prior year's third fiscal
quarter ended December 31, 1998. The results for prior year calendar quarter
ended March 31, 1998 contain certain Merger-related costs and expenses, some of
which are not easily quantifiable. Therefore, the Company believes that for
purposes of management's discussion and analysis, a comparison of the financial
results for the third quarter and nine months ended September 30, 1999 with the
results for the third fiscal quarter and nine months ended December 31, 1998 is
more meaningful than a comparison with the results for the quarter and nine
months ended September 30, 1998, which include a similar calendar quarter from
two prior fiscal years ago.

THE TRANSACTIONS

The Acquisition. On February 10, 1997 (the "Acquisition Closing Date"), pursuant
to a purchase agreement dated December 12, 1996, (as amended, the "Purchase
Agreement") an acquisition subsidiary wholly owned by Greenwich Street Capital
Partners, L.P. ("GSCP") and certain affiliated investors acquired from Mark IV
Industries ("Mark IV") and one of its subsidiaries all

                                       12
<PAGE>   13

of the issued and outstanding capital stock of Gulton Industries, Inc.
("Gulton"), the former parent of Old EVI, and each of its subsidiaries for an
initial cash purchase price of $151.5 million, plus $4.9 million in estimated
adjustments paid on the closing date, which aggregate amount is subject to
further post-closing adjustments (the "Acquisition"). Mark IV and the Company
are currently disputing the post-closing adjustments pursuant to the applicable
provisions of the Purchase Agreement. Pursuant to this arbitration, the Company
has incurred professional fees of $2.0 million, of which $0.6 million remain
unpaid as of September 30, 1999. Any final adjustment in purchase price, net of
costs incurred from this arbitration will result in an adjustment to goodwill.

Financing for the Acquisition, and the related fees and expenses, consisted of
(i) $57.6 million of equity capital provided by GSCP and certain affiliated
investors, (ii) a $60.0 million senior credit facility (consisting of a term
loan and a revolving credit facility), and (iii) a $75.0 million senior
subordinated credit facility issued as interim financing by Chase Securities
Inc. and Smith Barney Inc., the initial purchasers of the EVI Existing Notes (as
defined herein), and certain other lenders. Of these amounts, $156.4 million was
used for the purchase price for the Acquisition and $10.4 million was used for
financing and transaction fees and expenses.

On March 24, 1997, Old EVI issued 11% Senior Subordinated Notes due 2007 in an
aggregate principal amount of $100.0 million (the "EVI Existing Notes"), all of
which were subsequently exchanged in September, 1997 for a like principal amount
of new 11% Senior Subordinated Notes due 2007, Series A (together with the EVI
Existing Notes, the "EVI Notes"), in an offering registered under the Securities
Act of 1933, as amended (the "Securities Act"). The proceeds from the EVI Notes
were used to repay the $75.0 million of indebtedness under the interim financing
in its entirety and a portion of Old EVI's term loan. The foregoing
transactions, including the issuance of the EVI Notes, are referred to herein as
the "Acquisition Transactions." The Acquisition was accounted for using the
purchase method of accounting pursuant to which the purchase price was allocated
among the acquired assets and liabilities in accordance with estimates of fair
market value on February 10, 1997 (i.e., the Acquisition Closing Date).

The Recapitalization. On May 6, 1997 (the "Recapitalization Closing Date"), Old
Telex completed a recapitalization (the "Recapitalization") pursuant to an
Agreement (the "Recapitalization Agreement") among Old Telex, Greenwich II, LLC
("G-II"), a Delaware limited liability company formed by GSCP and certain other
investors, and GST Acquisition Corp. ("GST"), a Delaware corporation and a
wholly owned subsidiary of G-II. In connection with the Recapitalization, all of
the shares of common stock of Holdings ("Holdings Common Stock") and all options
and warrants to acquire Holdings Common Stock (other than certain shares of
Holdings Common Stock and certain options to acquire Holdings Common Stock owned
by certain members of management of Old Telex) were converted into the right to
receive an aggregate amount of cash (the "Recapitalization Consideration") equal
to $253.9 million. In addition, in connection with the Recapitalization
Agreement, certain shares of Holdings Common Stock held by management of Old
Telex (such shares, the "Rollover Shares") and certain options to acquire
additional shares of Holdings Common Stock (the "Rollover Options"), with an
aggregate value of $21.2 million (which represented 14% of the equity of
Holdings on a non-diluted basis and 20% on a fully diluted basis) were retained
by such managers. In connection with the Recapitalization, Old Telex completed
(i) a tender offer (the "Tender Offer") to repurchase all of Old Telex's then
outstanding 12% Senior Notes due 2004, in aggregate principal amount of $100.0
million, for $118.3 million (including premium and consent fees along with
accrued interest), and (ii) a solicitation of consents with respect to certain
amendments to the indenture pursuant to which such notes were issued. The
Recapitalization, the financing thereof (including the issuance by Old Telex of
10 1/2 % Senior Subordinated Notes due 2007 (the "Existing Telex Notes") to
Chase Securities, Inc., Morgan Stanley & Co. Incorporated and Smith Barney,
Inc.), the Tender Offer and the payment of the related fees and expenses are
herein referred to as the "Recapitalization Transaction."

The Recapitalization was financed by (i) $108.4 million of new equity provided
by GSCP and


                                       13
<PAGE>   14

certain other co-investors, (ii) the Rollover Shares and Rollover Options valued
at $21.2 million, (iii) a $140.0 million senior secured credit facility (the
"Senior Secured Credit Facility") with The Chase Manhattan Bank, Morgan Stanley
Senior Funding, Inc. and certain other lenders, consisting of (a) a $115.0
million term loan facility (the "Term Loan Facility"), and (b) a $25.0 million
revolving credit facility (the "Revolving Credit Facility"), (iv) $125.0 million
of Existing Telex Notes and (v) $36.5 of available cash of Old Telex. Of the
$108.4 million of new equity contributed by GSCP and certain other co-investors,
$25.2 million consisted of proceeds from the issuance by GST (a predecessor of
Holdings) of Deferred Pay Subordinated Debentures due 2009 (the "GST
Subordinated Debentures").

Pursuant to the Recapitalization of Old Telex on May 6, 1997, the historical
basis of all assets and liabilities was retained for financial reporting
purposes, and the repurchases of existing Holdings Common Stock and issuance of
new Holdings Common Stock have been accounted for as equity transactions.

In October 1997, Old Telex completed an exchange offer of $125.0 million
aggregate principal amount of new 10 1/2 % Senior Subordinated Notes Due 2007,
Series A (the "New Telex Notes"), which were registered under the Securities
Act, for a like principal amount of the Existing Telex Notes (together with the
New Telex Notes, the "Telex Notes"). All of the Existing Telex Notes were
tendered and accepted for exchange.

The Mergers. On February 2, 1998 Old EVI merged with Old Telex, with Old EVI
surviving and changing its corporate name to "Telex Communications, Inc." (the
"Mergers"). The Merger was effected pursuant to an agreement and plan of merger,
dated January 29, 1998 under which Greenwich I LLC ("G-I"), a subsidiary wholly
owned by GSCP and certain affiliated investors, exchanged all of the issued and
outstanding common and preferred stock of EVI Audio Holdings ("EVI Holdings"),
the former parent of Old EVI, for 1,397,400 shares of Holdings Common Stock, and
13,000 shares of Holdings' Series A Pay-in-Kind Preferred Stock, respectively,
and EVI Holdings was merged with and into Holdings, with Holdings continuing as
the surviving corporation (the "Parent Merger" and together with the Merger, the
"Mergers"). The Mergers have been accounted for essentially as a pooling of
interests from May 6, 1997, the date on which Old EVI and Old Telex came under
common control, and the financial statements of the Company for Fiscal 1998
accordingly include the results of Old Telex from May 6, 1997. Immediately prior
to the Mergers, $12.7 million of indebtedness outstanding under Old EVI's senior
credit facility was paid in full and Old EVI's senior credit facility was
terminated. Such indebtedness, together with $0.4 million of certain fees and
expenses associated with the Mergers, was repaid by utilizing free cash at
closing from Old EVI of $3.8 million and by borrowings under Old Telex's
Revolving Credit Facility of $9.3 million. Total fees and expenses incurred as a
result of the Mergers were $1.7 million, including the $0.4 million paid at
closing. The EVI Notes remain outstanding following the Mergers.

The Acquisition Transactions, the Recapitalization Transaction, and the Mergers
are referred to herein collectively as the "Transactions."

OVERVIEW

The Company, formed as a result of the February 2, 1998 merger of Old Telex and
Old EVI (see "The Mergers"), is a leader in the design, manufacture and
marketing of sophisticated audio, wireless and multimedia communications
equipment to commercial, professional and industrial customers. The Company
provides high value-added communications products designed to meet the specific
needs of customers in commercial, professional and industrial markets, and does
not participate in the competitive retail consumer electronics market. The
Company offers a comprehensive range of products worldwide for professional
audio systems as well as for multimedia and other communications product
markets, including wired and wireless microphones, wired and wireless intercom
systems, mixing consoles, signal processors, amplifiers, loudspeaker systems,
headphones and headsets, tape duplication products, talking

                                       14

<PAGE>   15

book players, LCD projectors, wireless LAN and PCS antennas, hearing aids and
wireless assistive listening devices.

Subsequent to the Mergers, the Company has reorganized its business into two
business segments: Professional Sound and Entertainment and Multimedia/Audio
Communications. Prior to the Mergers, essentially all of the Company's business
consisted of Old EVI's three principal lines of business within the overall
professional audio market: Fixed Installation, Professional Music Retail and
Concert/Recording/Broadcast. These businesses now comprise a part of the
Company's Professional Sound and Entertainment business segment. In addition, as
a result of the Mergers, the Multimedia/Audio Communications business segment
(consisting mostly of businesses of Old Telex) accounts for a significant
proportion of the Company's business.

The Company maintains assets and/or operations in a number of foreign
jurisdictions, the most significant of which are Germany, the United Kingdom,
Japan, Singapore, and Hong Kong. In addition, the Company conducts business in
local currency in many countries, the most significant of which are Germany, the
United Kingdom, Japan, Singapore, Hong Kong, Canada, Australia, Switzerland and
France. Exposure to U.S. dollar/German mark and U.S. dollar/British pound
exchange rate volatility is mitigated to some extent by the Company's ability to
source its production needs with existing manufacturing capacity in Germany and
Great Britain, and the exposure to the U.S. dollar/Japanese yen exchange rate
volatility is to some extent mitigated by sourcing products denominated in yen
from Japan or through contractual provisions in sales agreements with certain
customers. Nevertheless, the Company has a direct and continuing exposure to
both positive and negative foreign currency movements.

The Company reports the foreign exchange gains or losses on transactions as part
of other income. Gains and losses on translation of foreign currency denominated
balance sheets are classified as currency translation adjustments and are
included as part of shareholder's deficit.

RESULTS OF OPERATIONS

The following tables set forth, for the periods indicated, the Company's net
sales, in thousands:

<TABLE>
<CAPTION>
                                                 Quarter ended                Nine months ended
                                           --------------------------     ---------------------------
                                           September 30,  December 31,    September 30,  December 31,
                                               1999          1998             1999           1998
                                           --------------------------     ---------------------------
<S>                                            <C>          <C>              <C>           <C>
Net Sales:
     Professional Sound and Entertainment      $53,254      $ 47,940         $154,447      $152,822
     Multimedia/Communications                  35,157        32,122          100,135        93,520
                                               -------      --------         --------      --------
                                               $88,411      $ 80,062         $254,582      $246,342
                                               =======      ========         ========      ========


</TABLE>

QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO QUARTER AND NINE
MONTHS ENDED DECEMBER 31, 1998

Net Sales. The Company's net sales increased $8.3 million, or 10.4%, from $80.1
million in the quarter ended December 31, 1998 to $88.4 million in the quarter
ended September 30, 1999. Net sales increased $8.3 million, or 3.4%, from $246.3
million for the nine months ended December 31, 1998 to $254.6 million for the
nine months ended September 30, 1999. The increase in net sales for the quarter
and for the nine months is attributed to an increase in both the Professional
Sound and Entertainment and in the Multimedia/Audio Communications segments' net
sales.

Net sales in the Company's Professional Sound and Entertainment segment
increased $5.4 million, or 11.3%, from $47.9 million in the quarter ended
December 31, 1998 to $53.3 million in the quarter ended September 30, 1999. Net
sales increased $1.6 million, or 1.0% from $152.8 million for the nine months


                                       15
<PAGE>   16

ended December 31, 1998 to $154.4 million for the nine months ended September
30, 1999. The increase in net sales for the nine months ended September 30, 1999
was due to the strong sales for the quarter which offset earlier-in-the year
decline attributed to discontinuation of certain product lines, the sale of the
Gauss business, and to the destruction by fire of the Company's Mishawaka, IN
factory. The strong sales growth for the quarter was attributed primarily to new
products and to recovery in the Asia/Pacific region.

Net sales in the Company's Multimedia/Audio Communications segment increased
$3.1 million, or 9.7%, from $32.1 million in the quarter ended December 31, 1998
to $35.2 million in the quarter ended September 30, 1999. Net sales increased
$6.6 million, or 7.1% from $93.5 million for the nine months ended December 31,
1998 to $100.1 million for the nine months ended September 30, 1999. The
increase in net sales for the quarter and the nine months ended September 30,
1999 was attributed primarily to the increase in new electronic imaging
products.

Gross Profit. The Company's gross profit increased $5.5 million, or 20.3%, from
$27.1 million in the quarter ended December 31, 1998 to $32.6 million in the
quarter ended September 30, 1999. Gross profit increased $4.7 million, or 5.3%
from $89.1 million for the nine months ended December 31, 1998 to $93.8 million
for the nine months ended September 30, 1999. As a percentage of net sales, the
gross margin rate increased from 33.9% in the quarter ended December 31, 1998 to
36.9% in the quarter ended September 30, 1999, and increased from 36.2% for the
nine months ended December 31, 1998 to 36.9% for the nine months ended September
30, 1999. The increase in the gross margin rate for the quarter and for the nine
months ended September 30, 1999 was attributed mainly to the cost reduction
efforts, primarily in purchased materials, implemented by the Company. In
addition, gross margin on some of the new products has increased with improved
production efficiency as the Company is past the start up phase.

Engineering. The Company's engineering expenses remained about flat, increasing
$0.1 million, or 2.7%, from $3.7 million in the quarter ended December 31, 1998
to $3.8 million in the quarter ended September 30, 1999. Engineering expenses
for the nine months ended September 30, 1999 at $11.2 million remained flat with
the nine months ended December 31, 1998.

Selling, General and Administrative. The Company's selling, general and
administrative expenses for the quarter ended December 1998 contained a credit
of $2.8 million attributed to reversal of previously accrued non-cash charges
for stock options and bonus. Excluding this credit for the non-cash items, the
Company's selling, general and administrative expenses increased $1.2 million,
or 6.1% from $19.7 million in the quarter ended December 31, 1998 to $20.9
million in the quarter ended September 30, 1999. Excluding the credit for the
non-cash items, selling, general and administrative expenses increased $2.5
million, or 4.4% from $56.5 million for the nine months ended December 31, 1998
to $59.0 million for the nine months ended September 30, 1999. The increase in
selling, general and administrative expenses was attributed mainly to increased
spending for information technology, and advertising and promotion.

Corporate Charges. Corporate charges of $0.4 million for the quarters ended
December 31, 1998 and September 30, 1999, and $1.3 million for the nine months
ended December 31, 1998 and September 30, 1999 represent fees to GSCP for
consulting and management services provided under a management and services
agreement.

Other income. The Company's royalty income, together with gains on the sales of
certain of its facilities vacated in 1998 due to merger-related restructuring
and the expected business interruption insurance benefit resulting from a fire
that destroyed the Company's Mishawaka, IN facility, exceeded other expenses in
the quarter and nine months ended September 30, 1999.

In the nine months ended September 30, 1999, the Company recorded a gain of $0.8
million on $3.4 million of proceeds on the sales of certain vacated facilities
and certain product lines.


                                       16
<PAGE>   17

The Company's Mishawaka, IN facility was destroyed by fire in 1998. The Company
has recognized the expected business interruption insurance benefit of $1.0
million in the nine months ended September 30, 1999.

In the third quarter ended September 30, 1999, the Company recognized $0.7
million of royalty income attributed to underpayment in prior periods by a
licensee.

Interest expense. The Company's interest expense of $ 9.2 million for the
quarter ended September 30, 1999 and $27.3 million for the nine months ended
September 30, 1999 remained about flat, respectively, with the quarter and with
the nine months ended December 31, 1998. A reduction in outstanding indebtedness
was about offset by slightly higher interest rates on the Company's Senior
Secured Credit Facility.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1999 the Company had cash and cash equivalents of $2.6 million
compared to $3.4 million at December 31, 1998. The Company's principal source of
funds in the nine months ended September 30, 1999 consisted of $8.4 million net
cash provided from financing activities and $3.4 million proceeds from sale of
certain vacated facilities and certain product lines. Net cash used in
operations was $5.0 million and cash used in investing activities, exclusive of
proceeds from sale of certain vacated facilities and certain product lines, was
$7.6 million.

The Company's investing activities consisted of capital expenditures to maintain
facilities, acquire machines or tooling, update certain manufacturing processes,
introduce new products and improve efficiency, offset by $3.4 million in
proceeds from the sales of certain product lines and vacated facilities. Capital
expenditures totaled $7.6 million for the nine months ended September 30, 1999
compared with $5.1 million for the nine months ended December 31, 1998. The
Company's ability to make capital expenditures is subject to certain
restrictions under its Senior Secured Credit Facility.

The Company's consolidated indebtedness increased $8.3 million from $337.7
million at December 31, 1998 to $346.0 million at September 30, 1999. The
increase in indebtedness is comprised of increased borrowings under the
Company's Revolving Credit Facility, which were partially offset by scheduled
and accelerated principal reductions on the Company's Term Loan Facility.

The Company's liquidity needs arise primarily from debt service on indebtedness
incurred in connection with the Transactions, working capital needs and capital
expenditure requirements. The Company incurred substantial indebtedness in
connection with the Acquisition Transaction and the Recapitalization
Transaction. As a result, debt service represents significant liquidity
requirements for the Company.

The Company relies mainly on internally generated funds, and, to the extent
necessary, borrowings under the Revolving Credit Facility and foreign working
capital lines to meet its liquidity needs.

The Company's current credit facilities include the Senior Secured Credit
Facility consisting of the Term Loan Facility of $98.3 million and the Revolving
Credit Facility, subject to certain borrowing base limitations, of $25.0
million, and foreign working capital lines, subject to certain limitations, of
$6.2 million. In certain instances the foreign working capital lines are secured
by a lien on foreign real property, leaseholds, accounts receivable and
inventory or are guaranteed by another subsidiary.

As of September 30, 1999, $8.7 million of the Company's $98.3 million Term Loan
Facility is payable in the next 12 months. In addition, the Company had $18.8
million outstanding under the Revolving Credit Facility, and $3.8 million
outstanding under the foreign working capital

                                       17
<PAGE>   18

lines. Net availability at September 30, 1999 under the Revolving Credit
Facility, computed by deducting $4.8 million of open letters of credit and
applying applicable borrowing limitations, totaled $1.4 million. Net
availability at September 30, 1999 under foreign working lines totaled $2.4
million. Outstanding balances under substantially all of these credit facilities
bear interest at floating rates based upon the interest rate option selected by
the Company; therefore, the Company's financial condition is and will continue
to be affected by changes in the prevailing interest rates. The effective
interest rate under these credit facilities in the nine months ended September
30, 1999 was 8.4%.

Pursuant to the Term Loan Facility, the Company is required to make permanent
principal payments under (i) the $50.0 million Tranche A Term Loan Facility
($36.5 million outstanding at September 30, 1999), $2.0 million in the remainder
of 1999 and $8.5 million, $11.0 million and $15.0 million of which is payable in
each of 2000, 2001 and 2002 (which has a final maturity date of November 6,
2002), respectively, and (ii) the $65.0 million Tranche B Term Loan Facility
($61.8 million outstanding at September 30, 1999), $0.1 million in the remainder
of 1999 and $0.5 million, $0.5 million, $0.5 million, $24.1 million and $36.1
million of which is payable in each of 2000, 2001, 2002, 2003 and 2004 (which
has a final maturity date of November 6, 2004), respectively. In addition, under
the terms of the Senior Secured Credit Facility, the Company is required to make
mandatory prepayments with (i) non-ordinary asset sale proceeds, (ii) any
additional indebtedness and equity proceeds (with certain exceptions) and (iii)
with 75% of the Excess Cash Flow of the Company and its subsidiaries for each
fiscal year. During the nine months ended September 30, 1999, the Company made a
mandatory prepayment, equal to 75% of the Company's Excess Cash Flow, of $4.2
million.

The Company is actively implementing plans to reduce inventory, improve the
accounts receivable collection experience, limit capital expenditures, and sell
vacant land and other non-productive or non-core assets (see note 10 to the
financial statements). The Company believes that these additional sources of
funds, together with the Company's Revolving Credit Facility and cash from
operations will be adequate to meet its debt service and principal payment
requirements, capital expenditure needs, and working capital requirements.
However, no assurance can be given in this regard, because working capital
requirements and other circumstances may change. The Company's future
performance and its ability to service its obligations will also be subject to
future economic conditions and to financial, business and other factors, many of
which are beyond the Company's control.

ENVIRONMENTAL MATTERS

The Company is a party in a number of environmental enforcement matters and
related claims which have arisen in the ordinary course of business. Certain
environmental matters are indemnified by Mark IV, the former parent company of
Old EVI. Based upon reliance of this indemnification, the Company believes that
such matters and claims, if finally determined in a manner adverse to the
Company, whether considered separately or in the aggregate, would not have a
material adverse effect on the operating results or financial condition of the
Company. The Company believes that compliance with current federal, state and
local environmental protection laws and provisions should not have a material
adverse effect on the operating income or financial condition of the Company.
The assessment of materiality of such environmental matters and claims is based
on a gross determination of such charges that could occur and does not give
effect to possible third party recoveries.

YEAR 2000

Some companies' computer systems used today may be unable to interpret or
process data correctly after December 31, 1999 because they allow only two
digits to indicate the year in a date. The Company uses computer systems for
various operations, including financial reporting, billing, order processing,
purchasing, inventory management and certain manufacturing operations. In
addition, certain manufacturing systems, plant and facilities systems may
contain

                                       18
<PAGE>   19

date-related functionality, software or embedded microprocessors that could
malfunction if they are not Year 2000 ready.

Most of the Company's products do not contain date-related functionality,
software or embedded microprocessors and therefore are not subject to Year 2000
issues. The Company believes all its currently-produced products are Year 2000
ready. The Company is completing programs to identify non-Year 2000 ready
products and is developing strategies to address problems, if any, for customers
who own such products.

The Company has completed an internal inventory and assessment of Year 2000
readiness of its computer hardware and software and it's non-information
technology and has in recent years replaced, modified or upgraded more than 80%
of its information systems with Year 2000 ready systems. The remaining upgrades,
changes to and testing of the Company's critical systems were completed in July
1999.

In addition to internal remediation activities, the Company has initiated
communications with key third parties, including suppliers and customers, to
determine the extent to which their systems, their products, or their electronic
data interchange with the Company, are vulnerable to Year 2000 issues. The data
collection process will continue into the fourth quarter of fiscal year 1999
because the Company has not yet received sufficient information from some of
these parties to fully assess the risks relating to non-timely compliance by all
third parties. The Company is in the process of developing contingency plans for
critical systems in the event that the Company or any of its key suppliers or
customers are not Year 2000 ready by the required dates. If the systems of the
Company or its key suppliers are not Year 2000 ready in a timely fashion, the
Company believes that the most likely worst case scenario would include some
temporary disruptions in the Company's acceptance and processing of orders and
billing and in its ability to secure raw materials for production from
suppliers. This could cause a temporary interruption of some materials or
services the Company needs to make its products or process customer orders,
which could result in some delayed shipments to customers, delayed collections
and lost sales and profits for the Company.

The Company believes that the replacement, upgrade and changes to the critical
systems to address Year 2000 issues has required incremental expenditures of
less than $1.0 million in 1999 with minimal expenditures expected in the fourth
quarter of fiscal year 1999. The Company does not separately track internal
costs incurred for its Year 2000 program, which costs are principally related to
payroll costs for its information systems group. The costs of the Year 2000
program are being funded through operating cash flows and are expensed as
incurred or capitalized as appropriate.

Although the Company believes its critical systems are ready there can be no
assurance that its Year 2000 program will be effective or that estimates about
timing and cost will be accurate. The outcome of the Company's Year 2000 program
is subject to a number of risks and uncertainties, some of which (such as the
availability of qualified personnel and the Year 2000 preparation of third
parties) are beyond its control. Therefore, there can be no assurances that the
Company will not incur material remediation costs beyond the above anticipated
future costs, or that the Company's business, financial condition, or results of
operations will not be significantly impacted if Year 2000 problems with its
systems, or with the products or systems of other parties with whom it does
business, are not resolved in a timely manner.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" effective for fiscal years beginning after
June 15, 2000. SFAS No. 133 establishes accounting and reporting standards
requiring that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded in the balance

                                       19
<PAGE>   20

sheet as either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allow a derivative's gains or losses to offset related results
on the hedged item in the income statement and requires that a company must
formally document, designate and assess the effectiveness of transactions that
receive hedge accounting. The Company has not quantified the impacts of adopting
SFAS No. 133 and has not yet determined the timing or method of adoption.


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<PAGE>   21


ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
exchange and interest rates. The Company does not enter into derivatives or
other financial instruments for trading or speculative purposes. The
counter-parties to these transactions are major financial institutions.

EXCHANGE RATE SENSITIVITY ANALYSIS

The Company enters into forward exchange contracts principally to hedge the
currency fluctuations in transactions denominated in foreign currencies, thereby
limiting the Company's risk that would otherwise result from changes in exchange
rates. During the quarter ended September 30, 1999, the principal transactions
hedged were certain intercompany balances attributed primarily to intercompany
sales. Gains and losses on forward exchange contracts and the offsetting losses
and gains on the hedged transactions are reflected in the condensed consolidated
statements of operations.

At September 30, 1999, the Company had $7.9 million of gross outstanding forward
exchange contracts, with a weighted remaining maturity of 136 days.

At September 30, 1999, the difference between the fair value of all outstanding
contracts, as estimated by the amount required to enter into offsetting
contracts with similar remaining maturities based on quoted prices, and the
contract amounts was immaterial. A 10% fluctuation in exchange rates for these
currencies would change the fair value by approximately $0.8 million. However,
since these contracts hedge foreign currency denominated transactions, any
change in the fair value of the contracts would be offset by changes in the
underlying value of the transactions being hedged.

INTEREST RATE AND DEBT SENSITIVE ANALYSIS

For fixed rate debt, interest rate changes affect the fair market value but do
not impact earnings or cash flows. Conversely, for floating rate debt, interest
rate changes generally do not affect the fair market value but do impact future
earnings and cash flows, assuming other factors are held constant.

At September 30, 1999, the Company had fixed rate debt of $225.0 million and
floating rate debt of $121.0 million. Holding all other variables constant (such
as foreign exchange rates and debt levels), a one percentage point decrease in
interest rates would increase the unrealized fair market value of the $225.0
million fixed rate debt by approximately $8.4 million. The earnings and cash
flow impact for the next twelve months resulting from a one percentage point
increase in interest rates on the $121.0 million floating rate debt would be
approximately $1.2 million, holding all other variables constant.

                                       21

<PAGE>   22


PART II.        OTHER INFORMATION

ITEM 5          OTHER INFORMATION

                On September 29, 1999, Telex Communications, Inc. (the
                "Company") obtained a waiver (the "Waiver"), to the Credit
                Agreement, dated as of May 6, 1997, as amended by Amendment No.
                1, dated as of January 30, 1998 and as amended by Amendment No.
                2, dated as of December 23, 1998 (the "Credit Agreement"), among
                the Company, the several banks and other financial institutions
                from time to time parties thereto (the "Lenders"), Morgan
                Stanley Senior Funding, Inc., as documentation agent for the
                Lenders, and The Chase Manhattan Bank, as administrative agent
                for the Lenders. The Waiver provides that the Lenders waive
                compliance with the financial condition covenants contained in
                Subsection 8.1(a), Subsection 8.1(b) and Subsection 8.1(c) of
                the Credit Agreement for the period from September 30, 1999 to
                October 31, 1999.

                On October 29, 1999, the Company entered into Amendment No. 3
                (the "Amendment") to the Credit Agreement, among the Company,
                the Lenders, Morgan Stanley Senior Funding, Inc., as the
                documentation agent for the Lenders, and The Chase Manhattan
                Bank, as administrative agent for the Lenders. The Amendment
                changes certain financial condition covenants applicable for the
                periods commencing with the fiscal quarter ending on September
                30, 1999 and ending with the fiscal quarter ending on December
                31, 2000, changes related definitions, adds a new financial
                condition covenant and increases the Applicable Margins for the
                Revolving Credit Loans, the Tranche A Term Loans and the Tranche
                B Term Loans (as each such term is defined in the Credit
                Agreement).


ITEM 6          EXHIBITS AND REPORTS ON FORM 8-K


(a)   Exhibits

      10(a)       Waiver, dated as of September 29, 1999, to the Credit
                  Agreement as amended by Amendment No. 1, dated as of January
                  30, 1998 and as amended by Amendment No. 2, dated as of
                  December 23, 1998, among the Company, the Lenders, Morgan
                  Stanley Senior Funding, Inc., as documentation agent for the
                  Lenders, and The Chase Manhattan Bank, as administrative agent
                  for the Lenders


      10(b)       Amendment No. 3, dated as of October 29, 1999, to the Credit
                  Agreement as amended by Amendment No. 1, dated as of January
                  30, 1998 and as amended by Amendment No. 2, dated as of
                  December 23, 1998, among the Company, the Lenders, Morgan
                  Stanley Senior Funding, Inc., as documentation agent for the
                  Lenders, and The Chase Manhattan Bank, as administrative agent
                  for the Lenders


      27          Financial data schedule


(b)   Reports on Form 8-K

      None.


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<PAGE>   23

                                   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.



                                  TELEX COMMUNICATIONS, INC.


Dated:   November 15, 1999        By:   /s/ Ned C. Jackson
         ----------------------       ------------------------------------
                                      Ned C. Jackson
                                      President and Chief Executive Officer


                                  TELEX COMMUNICATIONS, INC.


Dated:   November 15, 1999        By:   /s/ Richard J. Pearson
         ----------------------        -----------------------------------
                                      Richard J. Pearson
                                      Vice President and Chief Financial Officer




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<PAGE>   24


                           TELEX COMMUNICATIONS, INC.
                                    FORM 10-Q

                                  EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION OF DOCUMENT

     10(a)        Waiver, dated as of September 29, 1999, to the Credit
                  Agreement as amended by Amendment No. 1, dated as of January
                  30, 1998 and as amended by Amendment No. 2, dated as of
                  December 23, 1998, among the Company, the Lenders, Morgan
                  Stanley Senior Funding, Inc., as documentation agent for the
                  Lenders, and The Chase Manhattan Bank, as administrative agent
                  for the Lenders


     10(b)        Amendment No. 3, dated as of October 29, 1999, to the Credit
                  Agreement as amended by Amendment No. 1, dated as of January
                  30, 1998 and as amended by Amendment No. 2, dated as of
                  December 23, 1998, among the Company, the Lenders, Morgan
                  Stanley Senior Funding, Inc., as documentation agent for the
                  Lenders, and The Chase Manhattan Bank, as administrative agent
                  for the Lenders


     27           Financial data schedule





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