<PAGE>

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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

<TABLE>
<CAPTION>
COMMISSION FILE    REGISTRANT, STATE OF INCORPORATION OR      I.R.S. EMPLOYER
     NUMBER       FORMATION, ADDRESS AND TELEPHONE NUMBER   IDENTIFICATION NO.
---------------   ---------------------------------------   ------------------
<S>               <C>                                       <C>
333-115009        TELEX COMMUNICATIONS                           20-0406594
                  INTERMEDIATE HOLDINGS, LLC
                  (FORMED IN DELAWARE)
                  12000 PORTLAND AVENUE SOUTH
                  BURNSVILLE, MINNESOTA 55337
                  TELEPHONE: (952) 884-4051

333-112819        TELEX COMMUNICATIONS, INC.                     11-3707780
                  (INCORPORATED IN DELAWARE)
                  12000 PORTLAND AVENUE SOUTH
                  BURNSVILLE, MINNESOTA 55337
                  TELEPHONE: (952) 884-4051
</TABLE>

        Securities registered pursuant to Section 12(b) of the Act: NONE

        Securities registered pursuant to Section 12(g) of the Act: NONE

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

Indicate by check mark whether any of the registrants is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (check one):

 Large accelerated filer       Accelerated filer       Non-accelerated filer  X
                         ---                     ---                         ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).                                  YES     NO  X
                                                                      ---    ---

<PAGE>

As of July 31, 2006, Telex Communications, Inc. had outstanding 500 shares of
Common Stock, $0.01 par value, all of which are owned beneficially and of record
by Telex Communications Intermediate Holdings, LLC. Telex Communications
Intermediate Holdings, LLC has one member interest outstanding, which is owned
by Telex Communications Holdings, Inc.

This Quarterly Report on Form 10-Q is a combined report being filed by two
different registrants: Telex Communications Intermediate Holdings, LLC and Telex
Communications, Inc. (a wholly-owned subsidiary of Telex Communications
Intermediate Holdings, LLC). The information contained herein relating to each
individual registrant is filed by such registrant on its own behalf. No
registrant makes any representation as to information relating to any other
registrant.

                        THIS DOCUMENT CONTAINS 35 PAGES.

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


                                       2

<PAGE>

                        PART I. --- FINANCIAL INFORMATION

<TABLE>
<S>                                                                      <C>
Item 1. Financial Statements                                             Page(s)
Included herein is the following unaudited financial information:
TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
Condensed Consolidated Balance Sheets as of June 30, 2006 and
   December 31, 2005                                                          4
Condensed Consolidated Statements of Operations for the three and six
   month periods ended June 30, 2006 and 2005                                 5
Condensed Consolidated Statements of Cash Flows for the six month
   periods ended June 30, 2006 and 2005                                       6
TELEX COMMUNICATIONS, INC.
Condensed Consolidated Balance Sheets as of June 30, 2006 and
   December 31, 2005                                                          7
Condensed Consolidated Statements of Operations for the three and six
   month periods ended June 30, 2006 and 2005                                 8
Condensed Consolidated Statements of Cash Flows for the six month
   periods ended June 30, 2006 and 2005                                       9

Notes to Condensed Consolidated Financial Statements                      10-23
Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                         24-30
Item 3. Quantitative and Qualitative Disclosures About Market Risk           31
Item 4. Controls and Procedures                                              32

                         PART II. --- OTHER INFORMATION

                                                                         Page(s)
Item 1A. Risk Factors                                                        33
Item 6. Exhibits                                                             33
Signatures                                                                   34
Exhibit Index                                                                35
</TABLE>


                                       3
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                 TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                   JUNE 30,   DECEMBER 31,
                                                     2006         2005
                                                 -----------  ------------
                                                 (UNAUDITED)    (SEE NOTE)
<S>                                              <C>          <C>
                    ASSETS
Current assets:
   Cash and cash equivalents                      $  10,870     $  13,189
   Accounts receivable, net                          56,846        51,018
   Inventories                                       64,401        51,742
   Deferred income taxes                              2,826         1,899
   Prepaid expenses                                   4,835         3,233
   Other current assets                               3,570         1,502
                                                  ---------     ---------
      Total current assets                          143,348       122,583
Property, plant and equipment, net                   34,666        35,400
Deferred financing costs, net                         3,809         4,593
Goodwill, net                                        16,113        15,998
Other assets                                          2,817         3,422
                                                  ---------     ---------
                                                  $ 200,753     $ 181,996
                                                  =========     =========
       LIABILITIES AND MEMBER'S DEFICIT
Current liabilities:
   Current maturities of long-term debt           $     486     $     458
   Accounts payable                                  22,662        15,229
   Accrued wages and benefits                        15,132        12,848
   Accrued interest                                   3,120         3,113
   Other accrued liabilities                          9,002         8,015
   Income taxes payable                                 720         1,803
                                                  ---------     ---------
      Total current liabilities                      51,122        41,466
Long-term debt, net                                 214,076       207,949
Payable to Telex Communications Holdings, Inc.        7,799         6,183
Other long-term liabilities                          10,609         7,672
                                                  ---------     ---------
      Total liabilities                             283,606       263,270
                                                  ---------     ---------
Member's deficit:
   Member interest                                   83,946        83,946
   Accumulated other comprehensive loss              (5,037)       (7,750)
   Accumulated deficit                             (161,762)     (157,470)
                                                  ---------     ---------
      Total member's deficit                        (82,853)      (81,274)
                                                  ---------     ---------
                                                  $ 200,753     $ 181,996
                                                  =========     =========
</TABLE>

            See notes to condensed consolidated financial statements.

Note: The balance sheet at December 31, 2005 has been derived from the Company's
                   audited financial statements at that date.


                                       4

<PAGE>

                 TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                          Three months ended      Six months ended
                                         --------   --------   ---------   ---------
                                         June 30,   June 30,    June 30,    June 30,
                                           2006       2005       2006         2005
                                         --------   --------   ---------   ---------
<S>                                      <C>        <C>        <C>         <C>
Net sales                                $ 84,072   $ 80,358   $ 155,117   $ 154,246
Cost of sales                              45,390     43,323      85,870      84,598
                                         --------   --------   ---------   ---------
      Gross profit                         38,682     37,035      69,247      69,648
                                         --------   --------   ---------   ---------
Operating expenses:
   Engineering                              5,015      4,162       9,769       8,454
   Selling, general and administrative     24,062     22,172      46,968      43,392
   Restructuring charges                      343         --         880          --
                                         --------   --------   ---------   ---------
                                           29,420     26,334      57,617      51,846
                                         --------   --------   ---------   ---------
      Operating income                      9,262     10,701      11,630      17,802
Interest expense                           (7,614)    (7,175)    (15,089)    (14,225)
Other income, net                             639        225         835         996
                                         --------   --------   ---------   ---------
Income (loss) before income taxes           2,287      3,751      (2,624)      4,573
Provision for income taxes                  2,425      2,766       1,572       3,856
                                         --------   --------   ---------   ---------
      Net (loss) income                  $   (138)  $    985   $  (4,196)  $     717
                                         ========   ========   =========   =========
</TABLE>

            See notes to condensed consolidated financial statements.


                                       5

<PAGE>

                 TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 SIX MONTHS ENDED
                                                               --------------------
                                                               JUNE 30,    JUNE 30,
                                                                 2006        2005
                                                               --------   ---------
<S>                                                            <C>        <C>
OPERATING ACTIVITIES:
   Net (loss) income                                           $ (4,196)  $    717
   Adjustments to reconcile net (loss) income to
      cash flows from operations:
      Depreciation and amortization                               4,366      3,445
      Amortization of deferred financing costs and
         pay-in-kind interest charge                              7,139      6,276
      Restructuring charges                                         880         --
      Gain on sale of assets                                       (490)        --
      Deferred income taxes                                      (1,261)        --
      Change in operating assets and liabilities                (12,679)   (11,194)
      Change in long-term liabilities                             2,937      1,926
      Other, net                                                    456        313
                                                               --------   --------
   Net cash (used in) provided by operating activities           (2,848)     1,483
                                                               --------   --------
INVESTING ACTIVITIES:
   Additions to property, plant and equipment                    (3,529)    (6,452)
   Net proceeds from sale of assets                               3,989         --
   Other                                                             89         55
                                                               --------   --------
   Net cash provided by (used in) investing activities              549     (6,397)
                                                               --------   --------
FINANCING ACTIVITIES:
   Repayments under revolving lines of credit, net                   --     (1,011)
   Repayment of long-term debt                                     (234)      (230)
   Dividend to parent                                               (96)        --
                                                               --------   --------
   Net cash used in financing activities                           (330)    (1,241)
                                                               --------   --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS        310       (380)
                                                               --------   --------
CASH AND CASH EQUIVALENTS:
   Net decrease                                                  (2,319)    (6,535)
   Balance at beginning of period                                13,189     14,959
                                                               --------   --------
   Balance at end of period                                    $ 10,870   $  8,424
                                                               ========   ========
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
      Interest                                                 $  8,191   $  8,020
                                                               ========   ========
      Income taxes                                             $  1,885   $  2,929
                                                               ========   ========
</TABLE>

            See notes to condensed consolidated financial statements.


                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                   JUNE 30,    DECEMBER 31,
                                                     2006          2005
                                                 -----------   ------------
                                                 (UNAUDITED)    (SEE NOTE)
<S>                                              <C>           <C>
                    ASSETS
Current assets:
   Cash and cash equivalents                      $  10,870      $  13,189
   Accounts receivable, net                          56,846         51,018
   Inventories                                       64,401         51,742
   Deferred income taxes                              6,965          6,038
   Prepaid expenses                                   4,835          3,233
   Other current assets                               3,570          1,502
                                                  ---------      ---------
      Total current assets                          147,487        126,722
Property, plant and equipment, net                   34,666         35,400
Deferred financing costs, net                         3,297          3,981
Goodwill                                             16,113         15,998
Other assets                                          2,860          3,465
                                                  ---------      ---------
                                                  $ 204,423      $ 185,566
                                                  =========      =========

     LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Current maturities of long-term debt           $     486      $     458
   Accounts payable                                  22,662         15,229
   Accrued wages and benefits                        15,132         12,848
   Accrued interest                                   2,995          2,995
   Other accrued liabilities                          9,002          8,019
   Income taxes payable                                 720          1,803
                                                  ---------      ---------
      Total current liabilities                      50,997         41,352
Long-term debt, net                                 125,446        125,641
Payable to Telex Communications Holdings, Inc.        7,799          6,183
Other long-term liabilities                          10,609          7,672
                                                  ---------      ---------
      Total liabilities                             194,851        180,848
                                                  ---------      ---------
Shareholder's equity:
   Common stock and capital in excess of par        143,029        143,029
   Accumulated other comprehensive loss              (4,521)        (7,234)
   Accumulated deficit                             (128,936)      (131,077)
                                                  ---------      ---------
      Total shareholder's equity                      9,572          4,718
                                                  ---------      ---------
                                                  $ 204,423      $ 185,566
                                                  =========      =========
</TABLE>

            See notes to condensed consolidated financial statements.
     Note: The balance sheet at December 31, 2005 has been derived from the
              Company's audited financial statements at that date.


                                        7

<PAGE>

                           TELEX COMMUNICATIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED     SIX MONTHS ENDED
                                         -------------------   -------------------
                                         JUNE 30,   JUNE 30,   JUNE 30,   JUNE 30,
                                           2006       2005       2006       2005
                                         --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>
Net sales                                 $84,072    $80,358   $155,117   $154,246
Cost of sales                              45,390     43,323     85,870     84,598
                                          -------    -------   --------   --------
      Gross profit                         38,682     37,035     69,247     69,648
                                          -------    -------   --------   --------
Operating expenses:
   Engineering                              5,015      4,162      9,769      8,454
   Selling, general and administrative     24,057     22,159     46,953     43,356
   Restructuring charges                      343         --        880         --
                                          -------    -------   --------   --------
                                           29,415     26,321     57,602     51,810
                                          -------    -------   --------   --------
      Operating income                      9,267     10,714     11,645     17,838
Interest expense                           (4,100)    (4,131)    (8,187)    (8,246)
Other income, net                             639        225        835        996
                                          -------    -------   --------   --------
Income before income taxes                  5,806      6,808      4,293     10,588
Provision for income taxes                  2,425      2,766      1,572      3,856
                                          -------    -------   --------   --------
      Net income                          $ 3,381    $ 4,042   $  2,721   $  6,732
                                          =======    =======   ========   ========
</TABLE>

            See notes to condensed consolidated financial statements.


                                        8

<PAGE>

                           TELEX COMMUNICATIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED
                                                                        -------------------
                                                                        JUNE 30,   JUNE 30,
                                                                          2006       2005
                                                                        --------   --------
<S>                                                                     <C>        <C>
OPERATING ACTIVITIES:
   Net income                                                           $  2,721   $  6,732
   Adjustments to reconcile net income to cash flows from operations:
      Depreciation and amortization                                        4,366      3,445
      Amortization of deferred financing costs and debt discount             717        724
      Restructuring charges                                                  880         --
      Gain on sale of assets                                                (490)        --
      Deferred income taxes                                               (1,261)       384
      Change in operating assets and liabilities                         (12,690)   (11,585)
      Change in long-term liabilities                                      2,937      1,926
      Other, net                                                             456        313
                                                                        --------   --------
   Net cash (used in) provided by operating activities                    (2,364)     1,939
                                                                        --------   --------
INVESTING ACTIVITIES:
   Additions to property, plant and equipment                             (3,529)    (6,452)
   Net proceeds from sale of assets                                        3,989         --
   Other                                                                      89         55
                                                                        --------   --------
   Net cash provided by (used in) investing activities                       549     (6,397)
                                                                        --------   --------
FINANCING ACTIVITIES:
   Repayments under revolving lines of credit, net                            --     (1,011)
   Repayment of long-term debt                                              (234)      (230)
   Dividend to parent                                                       (580)      (456)
                                                                        --------   --------
   Net cash used in financing activities                                    (814)    (1,697)
                                                                        --------   --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                 310       (380)
                                                                        --------   --------
CASH AND CASH EQUIVALENTS:
   Net decrease                                                           (2,319)    (6,535)
   Balance at beginning of period                                         13,189     14,959
                                                                        --------   --------
   Balance at end of period                                             $ 10,870   $  8,424
                                                                        ========   ========
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
      Interest                                                          $  7,718   $  7,599
                                                                        ========   ========
      Income taxes                                                      $  1,885   $  2,929
                                                                        ========   ========
</TABLE>

            See notes to condensed consolidated financial statements.


                                        9
<PAGE>

                 TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
                           TELEX COMMUNICATIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.   Basis of Presentation

     COMPANY STRUCTURE

     The consolidated financial statements included herein are those of:

     a.   Telex Communications Intermediate Holdings, LLC ("Intermediate"),
          which consists of the accounts of Intermediate and Telex
          Communications, Inc. ("Telex"). Intermediate is a holding company
          whose assets consist of its investment in Telex and its subsidiaries
          and some deferred financing costs related to Intermediate's debt.
          Telex is where operating activities take place.

     b.   Telex, which consists of the accounts of Telex Communications, Inc.
          and its wholly owned subsidiaries.

     Intermediate is a wholly owned subsidiary of Telex Communications Holdings,
     Inc. ("Old Telex"), which is not a registrant. Intermediate and Telex were
     formed in connection with a November 2003 refinancing of Old Telex's debt
     obligations and related corporate restructuring.

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted accounting principles
     in the United States (U.S.) for interim financial information and with the
     instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
     they do not include all of the information and footnotes required by
     generally accepted accounting principles in the U.S. for complete financial
     statements. In the opinion of management, all adjustments (consisting of
     normal recurring adjustments) considered necessary for a fair presentation
     have been included. Operating results for the interim periods are not
     necessarily indicative of the results that may be expected for the full
     year.

     Preparation of Intermediate's and Telex's financial statements in
     conformity with generally accepted accounting principles in the U.S.
     requires management to make estimates and assumptions that affect the
     reported amounts in the financial statements and accompanying notes. Actual
     results could differ from those estimates. These financial statements
     should be read in conjunction with the financial statements and notes
     thereto included in the Annual Report on Form 10-K for the year ended
     December 31, 2005 for Intermediate and Telex.

2.   Pending Merger

     On June 28, 2006, we announced that the board of directors of Old Telex had
     unanimously approved a strategic merger with an indirect subsidiary of
     Robert Bosch GmbH. At the effective time of the merger all publicly
     registered debt of Old Telex, including the 11-1/2%


                                       10

<PAGE>

     Senior Secured Notes due October 15, 2008 issued by Telex and the 13%
     Senior Subordinated Discount Notes due January 15, 2009 issued by
     Intermediate, will be satisfied and discharged in accordance with the
     merger agreement. The merger is subject to the receipt of certain
     regulatory approvals, including the termination of the applicable waiting
     period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
     well as other customary closing conditions, and is expected to close during
     the third quarter of 2006. Additional information regarding the merger is
     contained in the Form 8-K filing of June 30, 2006.

3.   Inventories

     Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
                    June 30,   December 31,
                      2006         2005
                    --------   ------------
<S>                 <C>        <C>
Raw materials        $29,839      $22,832
Work in process        5,459        3,558
Finished products     29,103       25,352
                     -------      -------
                     $64,401      $51,742
                     =======      =======
</TABLE>

4.   Restructuring Charges

     As discussed in Note 3 to the Annual Report on Form 10-K for the year ended
     December 31, 2005 of Intermediate and Telex, Telex had recorded pretax
     restructuring charges of $1.8 million in 2005. During the six months ended
     June 30, 2006, additional pretax restructuring charges of $0.9 million were
     recorded. The restructuring will result in a reduction of approximately 165
     employees from the Company's Blue Earth, Minnesota manufacturing facility,
     with all employees expected to be terminated as of December 31, 2006. There
     are approximately 100 employees remaining as of June 30, 2006. The pretax
     restructuring charges are anticipated to total $2.8 million and will
     include expected cash expenditures of $2.0 million, to be completed by the
     end of the fourth quarter of 2006, primarily for severance costs, with the
     remaining $0.8 million of the restructuring charges representing non-cash
     charges associated with the write-down of fixed assets. Cumulative charges
     and cash payments total $2.6 million and $0.8 million, respectively, as of
     June 30, 2006.

     Telex sold the Blue Earth facility in June 2006 and is leasing back a minor
     portion through December 2006. Telex recognized a gain of approximately
     $0.5 million with the gain included in other income, net in the condensed
     consolidated statements of operations.

     The following table summarizes the status of Telex's business restructuring
     reserve and other related expenses during the six months ended June 30,
     2006 (in thousands):


                                       11

<PAGE>

<TABLE>
<CAPTION>
                                   Employee       Asset     Other       Total
                                  Separation   Impairment    Exit   Restructuring
                                     Costs        Costs     Costs      Reserve
                                  ----------   ----------   -----   -------------
<S>                               <C>          <C>          <C>     <C>
Charges                             $  884        $ 836     $  43       $1,763
Asset Impairments                       --         (836)       --         (836)
Cash Payments                          (12)          --       (43)         (55)
                                    ------        -----     -----       ------
Balance as of December 31, 2005        872           --        --          872
Charges                                680           --       200          880
Cash Payments                         (545)          --      (200)        (745)
                                    ------        -----     -----       ------
Balance as of June 30, 2006         $1,007        $  --     $  --       $1,007
                                    ======        =====     =====       ======
</TABLE>

5.   Goodwill

     Telex performs annual impairment reviews at the beginning of the fourth
     quarter or at any time there is an indicator of impairment. There was no
     indicator of impairment for the quarter ended June 30, 2006. Telex has
     certain amounts of goodwill denominated in foreign currencies that
     fluctuate with the movement of exchange rates.

     As disclosed in the table below, Telex incurred additional acquisition
     costs in the six months ended June 30, 2006 related to its December 2005
     acquisition of Shinwa Teknik (H.K.) Co., Ltd.

     The following table presents the changes in carrying value of goodwill by
     business segment as of June 30, 2006 (in thousands):

<TABLE>
<CAPTION>
                                                       Advanced Communication
                                  Professional Audio        Technologies         Total
                                  ------------------   ----------------------   -------
<S>                               <C>                  <C>                      <C>
Balance as of December 31, 2005         $9,587                 $6,411           $15,998
Purchase price adjustment                   --                     21                21
Foreign currency translation                94                     --                94
                                        ------                 ------           -------
Balance as of June 30, 2006             $9,681                 $6,432           $16,113
                                        ======                 ======           =======
</TABLE>


                                       12

<PAGE>

6.   Debt

     Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                     June 30,   December 31,
                                       2006         2005
                                     --------   ------------
<S>                                  <C>        <C>
TELEX
Senior Secured Notes                 $125,000     $125,000
Morrilton loan                            632          706
Other debt                                300          393
                                     --------     --------
                                      125,932      126,099
Less - current portion                   (486)        (458)
                                     --------     --------
   Total Telex long-term debt         125,446      125,641
INTERMEDIATE
Senior Subordinated Discount Notes     88,630       82,308
                                     --------     --------
   Total long-term debt              $214,076     $207,949
                                     ========     ========
</TABLE>

7.   Income Taxes

     Intermediate and Telex file a consolidated U.S. federal income tax return
     with Old Telex. The tax provision recorded by Telex is calculated on a
     separate company basis as required under a tax sharing agreement with Old
     Telex. Telex recorded a total income tax expense of $1.6 million for the
     six months ended June 30, 2006, resulting in an effective tax rate of
     36.6%. Income tax expense was $3.9 million for the six months ended June
     30, 2005 and the effective tax rate was 36.4%. Telex has a valuation
     allowance of $0.9 million at June 30, 2006 for certain deferred tax assets
     because of the uncertainty regarding their realization.

     The total income tax provision at the consolidated Intermediate level is
     the same as Telex's because the incremental losses being generated by
     Intermediate do not provide a current benefit and the deferred benefit is
     entirely offset by a valuation allowance. Intermediate, including Telex and
     its consolidated subsidiaries, has significant U.S. deferred tax assets
     resulting from deductible temporary differences, which consist mainly of
     interest expense on its Senior Subordinated Discount Notes. Unlike Telex on
     a separate company basis, Intermediate has a history of losses in the U.S.,
     which weighs heavily in determining the need for a valuation allowance.
     Given Intermediate's history of losses and expected continuation of the
     losses, a valuation allowance has been established for all of
     Intermediate's U.S. net deferred tax assets as of June 30, 2006.
     Intermediate will reduce the valuation allowance when, and if, Intermediate
     determines that the deferred tax assets are more likely than not to be
     realized.

     Telex had recorded a payable to Old Telex of $7.8 million at June 30, 2006
     and $6.2 million at December 31, 2005, resulting primarily from Telex
     utilizing net operating losses that had been retained by Old Telex.

     With the exception of Japan, accumulated and current unremitted earnings of
     the Company's foreign subsidiaries are deemed to be reinvested in each
     country and are not expected to be remitted. As such, no U.S. taxes have
     been provided for such foreign earnings.


                                       13
<PAGE>

8.   Pension and Postretirement Benefits

     Telex has one noncontributory defined benefit cash balance pension plan
     which was frozen in June 2003. Plan participants, as of June 2003, continue
     to receive interest credits but no longer receive a benefit credit based on
     the participant's age, vesting service, and total remuneration.

     The following table presents the net periodic benefit cost for each period
     (in thousands):

<TABLE>
<CAPTION>
                                           Three months ended June 30,   Six months ended June 30,
                                           ---------------------------   -------------------------
                                                   2006    2005                 2006    2005
                                                  -----   -----                -----   -----
<S>                                        <C>            <C>            <C>           <C>
Components of net periodic benefit cost:
Interest cost                                     $ 302   $ 301                $ 604   $ 602
Expected return on plan assets                     (325)   (368)                (650)   (736)
Amortization of prior unrecognized loss             162     106                  324     212
                                                  -----   -----                -----   -----
   Net periodic benefit cost                      $ 139   $  39                $ 278   $  78
                                                  =====   =====                =====   =====
</TABLE>

     Telex made employer contributions of $230,000 in April 2006 and $230,000 in
     July 2006 with additional funding of $1.2 million scheduled throughout the
     remainder of 2006.

9.   Related-Party Transactions

     In 2000 Telex relocated its corporate headquarters to a facility leased
     from DRF 12000 Portland LLC (the LLC), an entity in which Telex has a 50%
     interest. Telex contributed $0.6 million of cash to the LLC and the
     investment has been accounted for under the equity method. Telex has
     reviewed the accounting on a quarterly basis, applying the guidelines in
     FASB Interpretation No. 46, "Consolidation of Variable Interest Entities,
     an Interpretation of ARB No. 51" (FIN 46), and concluded that the method of
     accounting for the investment, equity method, remained appropriate.

     In May 2006 the LLC sold the headquarters facility to a real estate
     management firm for approximately $14 million and distributed the net
     proceeds to the investors, after payment of the outstanding mortgage
     balance and other closing expenses. In conjunction with the sale of the
     facility Telex, as tenant, extended its existing lease for an additional
     five years to May 31, 2015. Telex received cash of $0.7 million from the
     new owner in consideration for extending the lease.

     Telex has deferred its gain of approximately $2 million from the
     liquidation of its 50% interest in the LLC and is recognizing this gain, as
     well as the lease extension payment, over the future lease term of nine
     years. Telex reviewed various lease accounting principles and determined
     that deferring the gain was appropriate as the company has significant
     continued involvement with the property as sole tenant in the building.


                                       14

<PAGE>

10.  Comprehensive Loss

     Comprehensive loss reflects the change in equity of a business enterprise
     during a period from transactions and other events and circumstances from
     non-owner sources. For Intermediate and Telex, comprehensive net loss
     represents net income or loss adjusted for foreign currency translation
     adjustments and minimum pension liability adjustments. Comprehensive loss
     is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                   Intermediate
                                             -------------------------------------------------------
                                             Three months ended June 30,   Six months ended June 30,
                                             ---------------------------   -------------------------
                                                    2006      2005               2006      2005
                                                   ------   -------            -------   -------
<S>                                          <C>            <C>            <C>           <C>
Net (loss) income                                  $ (138)  $   985            $(4,196)  $   717
Other comprehensive income:
   Foreign currency translation adjustment          2,148    (2,566)             2,713    (3,996)
                                                   ------   -------            -------   -------
Comprehensive income (loss)                        $2,010   $(1,581)           $(1,483)  $(3,279)
                                                   ======   =======            =======   =======
</TABLE>

<TABLE>
<CAPTION>
                                                                      Telex
                                             -------------------------------------------------------
                                             Three months ended June 30,   Six months ended June 30,
                                             ---------------------------   -------------------------
                                                    2006      2005               2006      2005
                                                   ------   -------             ------   -------
<S>                                          <C>            <C>            <C>           <C>
Net income                                         $3,381   $ 4,042             $2,721   $ 6,732
Other comprehensive income:
   Foreign currency translation adjustment          2,148    (2,566)             2,713    (3,996)
                                                   ------   -------             ------   -------
Comprehensive income                               $5,529   $ 1,476             $5,434   $ 2,736
                                                   ======   =======             ======   =======
</TABLE>

     The components of accumulated other comprehensive loss for both
     Intermediate and Telex are as follows (in thousands):

<TABLE>
<CAPTION>
                               June 30,   December 31,
                                 2006         2005
                               --------   ------------
<S>                            <C>        <C>
INTERMEDIATE
Foreign currency translation   $ 3,507       $   794
Minimum pension liability       (8,544)       (8,544)
                               -------       -------
                               $(5,037)      $(7,750)
                               =======       =======
</TABLE>

<TABLE>
<CAPTION>
                               June 30,   December 31,
                                 2006         2005
                               --------   ------------
<S>                            <C>        <C>
TELEX
Foreign currency translation    $ 3,920     $ 1,207
Minimum pension liability        (8,441)     (8,441)
                                -------     -------
                                $(4,521)    $(7,234)
                                =======     =======
</TABLE>


                                       15

<PAGE>

11.  Segment Information

     Telex has two business segments: Professional Audio and Advanced
     Communication Technologies.

     Professional Audio

     Professional Audio consists of five lines of business within the overall
     professional audio market, including: (i) permanently installed sound
     systems; (ii) sound products used by professional musicians and sold
     principally through retail channels; (iii) sound products used in
     professional concerts, recording projects and radio and television
     broadcasts; (iv) professional communication products, including advanced
     digital matrix intercoms, used by broadcasters (including all major
     television networks) to control production communications, intercoms,
     headsets and wireless communications systems used by professional, college
     and high school football teams and stadiums and other professional and
     school sports teams, as well as by utilities, aerospace and industrial
     organizations; and (v) wired and wireless microphones used in the
     education, sports, broadcast, music and religious markets.

     Advanced Communication Technologies

     Advanced Communication Technologies targets five principal product markets
     including: (i) digital audio duplication products for the religious,
     education and enterprise markets, including talking book products for the
     blind and reading disabled; (ii) military/aviation communication products
     for the military and aviation markets; (iii) antenna products for original
     equipment manufacturers (OEMs) of wireless communication devices; (iv) land
     mobile and dispatch communication products for the public safety, military
     and industrial markets; and (v) audio and wireless education products for
     classroom and computer based education markets.

     The following tables provide information for Telex, and Intermediate where
     relevant, by business segment and geographic region for the three and six
     months ended June 30, 2006 and 2005 (in thousands):


                                       16

<PAGE>

<TABLE>
<CAPTION>
                                          Three months ended     Six months ended
                                         -------------------   -------------------
                                         June 30,   June 30,   June 30,   June 30,
                                           2006       2005       2006       2005
                                         --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>
Net sales
   Professional Audio                     $71,031    $65,494   $128,736   $123,041
   Advanced Communication Technologies     13,041     14,864     26,381     31,205
                                          -------    -------   --------   --------
                                          $84,072    $80,358   $155,117   $154,246
                                          =======    =======   ========   ========
Operating income (loss) (1)
   Professional Audio                     $ 7,045    $ 8,754   $  8,280   $ 13,219
   Advanced Communication Technologies      2,576      2,092      4,259      4,809
   Corporate                                 (359)      (145)      (909)      (226)
                                          -------    -------   --------   --------
                                          $ 9,262    $10,701   $ 11,630   $ 17,802
                                          =======    =======   ========   ========
Depreciation expense
   Professional Audio                     $ 1,514    $ 1,371   $  2,929   $  2,724
   Advanced Communication Technologies        182        101        355        193
   Corporate                                  419        267        970        503
                                          -------    -------   --------   --------
                                          $ 2,115    $ 1,739   $  4,254   $  3,420
                                          =======    =======   ========   ========
Capital expenditures
   Professional Audio                     $ 1,448    $ 1,630   $  2,415   $  3,172
   Advanced Communication Technologies        290        221        490        494
   Corporate                                  199      1,360        624      2,786
                                          -------    -------   --------   --------
                                          $ 1,937    $ 3,211   $  3,529   $  6,452
                                          =======    =======   ========   ========
Total assets (2)
   Professional Audio                                          $135,662   $125,719
   Advanced Communication Technologies                           41,444     37,987
   Corporate                                                     23,647     21,768
                                                               --------   --------
                                                               $200,753   $185,474
                                                               ========   ========
</TABLE>

(1)  These results include operating expense for Intermediate of $5,000 and
     $13,000 for the quarter ended June 30, 2006 and 2005, respectively, and
     $15,000 and $36,000 for the six months ended June 30, 2006 and 2005,
     respectively.

(2)  Total assets include deferred financing costs for Intermediate of $512,000
     and $712,000 as of June 30, 2006 and 2005, respectively. Total assets
     include a deferred tax valuation allowance of $4,182,000 as of June 30,
     2006 for Intermediate.

Corporate operating expenses include unallocated corporate engineering, selling,
general and administrative costs, amortization of other corporate intangibles
and restructuring charges.

Corporate identifiable assets relate principally to the investment in
information systems and corporate facilities, as well as cash, deferred
financing costs and deferred tax assets.

Net sales into each of the principal geographic regions were as follows (in
thousands):

<TABLE>
<CAPTION>
                           Three months ended     Six months ended
                          -------------------   -------------------
                          June 30,   June 30,   June 30,   June 30,
                            2006       2005       2006       2005
                          --------   --------   --------   --------
<S>                       <C>        <C>        <C>        <C>
United States              $41,699    $39,474   $ 78,035   $ 76,898
Europe                      24,067     23,325     42,655     44,267
Asia                         9,894     10,359     19,282     21,942
Other foreign countries      8,412      7,200     15,145     11,139
                           -------    -------   --------   --------
                           $84,072    $80,358   $155,117   $154,246
                           =======    =======   ========   ========
</TABLE>

It is not practical to disclose revenue by product or service grouping for
financial reporting purposes as the systems do not reliably compile this
information.

Long-lived assets of the Intermediate's U.S. and International operations were
as follows (in thousands):

<TABLE>
<CAPTION>
                          June 30, 2005   December 31, 2005
                          -------------   -----------------
<S>                       <C>             <C>
United States                $40,522           $44,017
International                 16,883            15,396
                             -------           -------
                             $57,405           $59,413
                             =======           =======
</TABLE>


                                       17
<PAGE>

12.  Commitments and Contingencies - Litigation

     From time to time the Company is a party to various legal actions in the
     normal course of business. In November 2005 the Company was named as a
     defendant in a lawsuit filed by Ace Pro Sound and Recording, LLC seeking
     more than $1.0 billion in damages. The Company is one of nine named
     defendants, who are various suppliers of musical, sound and recording
     equipment. In response to the defendants' motion to dismiss the claims,
     filed in March 2006, the plaintiff filed an amended complaint with
     additional factual allegations in April 2006. The Company believes the
     claims asserted against it are without merit and intends to vigorously
     defend the allegations. The Company believes the outcome to this litigation
     will not have a material adverse effect on its financial condition or
     results of operations.

13.  Guarantor Subsidiary

     In connection with the November 2003 debt restructuring, a wholly-owned
     domestic subsidiary of Telex, Telex Communications International, Ltd.
     (Guarantor), guarantees the $125.0 million 11 1/2% senior secured notes of
     Telex on a full, unconditional and joint and several basis.

     The guarantee is a secured obligation of the Guarantor and ranks senior in
     the right of payment to all existing and future subordinated indebtedness
     of the Guarantor and ranks equally in the right of payment with all other
     existing and future senior indebtedness of the Guarantor. The following
     condensed consolidating financial information includes the accounts of the
     Guarantor and the combined accounts of the Guarantor's direct and indirect
     foreign subsidiaries (Non-Guarantors).

     The following tables present condensed consolidating balance sheets as of
     June 30, 2006 and December 31, 2005, condensed consolidating statements of
     operations for the three and six months ended June 30, 2006 and 2005, and
     condensed consolidating statements of cash flows for the six months ended
     June 30, 2006 and 2005. Intermediate's 13% senior subordinated discount
     notes are unsecured and are not guaranteed by any other party.


                                       18

<PAGE>

                           TELEX COMMUNICATIONS, INC.
                      CONDENSED CONSOLIDATING BALANCE SHEET
                                  JUNE 30, 2006
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NON -
                                           ISSUER    GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ----------   ------------   ------------
<S>                                       <C>        <C>         <C>          <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents              $  3,358    $    --     $  7,512     $      --       $ 10,870
   Accounts receivable, net                 26,396         --       30,450            --         56,846
   Inventories                              27,768         --       43,570        (6,937)        64,401
   Deferred income taxes                     6,621         --          344            --          6,965
   Prepaid expenses                          1,617         --        3,218            --          4,835
   Other current assets                        401     33,988        5,461       (36,280)         3,570
                                          --------    -------     --------     ---------       --------
      Total current assets                  66,161     33,988       90,555       (43,217)       147,487
Property, plant and equipment, net          21,839         --       12,827            --         34,666
Deferred financing costs, net                3,297         --           --            --          3,297
Goodwill, net                               14,500         --        1,613            --         16,113
Other assets                                   159         --        2,709            (8)         2,860
Investment in subsidiaries                  88,461     54,486           --      (142,947)            --
                                          --------    -------     --------     ---------       --------
                                          $194,417    $88,474     $107,704     $(186,172)      $204,423
                                          ========    =======     ========     =========       ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Current maturities of long-term debt   $    212    $    --     $    274     $      --       $    486
   Accounts payable                         13,040         --        9,622            --         22,662
   Accrued wages and benefits                6,646         --        8,486            --         15,132
   Accrued interest                          2,995         --           --            --          2,995
   Other accrued liabilities                10,961         --       34,321       (36,280)         9,002
   Income taxes payable                      1,500         --         (780)           --            720
                                          --------    -------     --------     ---------       --------
      Total current liabilities             35,354         --       51,923       (36,280)        50,997
Long-term debt, net                        125,420         --           26            --        125,446
Other long-term liabilities                 17,126         13        1,269            --         18,408
                                          --------    -------     --------     ---------       --------
      Total liabilities                    177,900         13       53,218       (36,280)       194,851
                                          --------    -------     --------     ---------       --------
Shareholder's equity (deficit)              16,517     88,461       54,486      (149,892)         9,572
                                          --------    -------     --------     ---------       --------
                                          $194,417    $88,474     $107,704     $(186,172)      $204,423
                                          ========    =======     ========     =========       ========
</TABLE>


                                       19

<PAGE>

                           TELEX COMMUNICATIONS, INC.
                      CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 2005
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NON -
                                           ISSUER    GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ----------   ------------   ------------
<S>                                       <C>        <C>         <C>          <C>            <C>
ASSETS
Current assets:
   Cash and cash equivalents              $  3,809    $    --      $ 9,380     $      --       $ 13,189
   Accounts receivable, net                 24,777         --       26,241            --         51,018
   Inventories                              24,050         --       32,367        (4,675)        51,742
   Deferred income taxes                     5,704         --          334            --          6,038
   Prepaid expenses                          1,576         --        1,657            --          3,233
   Other current assets                        338     33,415        6,488       (38,739)         1,502
                                          --------    -------      -------     ---------       --------
      Total current assets                  60,254     33,415       76,467       (43,414)       126,722
Property, plant and equipment, net          23,590         --       11,810            --         35,400
Deferred financing costs, net                3,981         --           --            --          3,981
Goodwill, net                               14,500         --        1,498            --         15,998
Other assets                                 1,131         --        2,342            (8)         3,465
Investment in subsidiaries                  83,899     50,497           --      (134,396)            --
                                          --------    -------      -------     ---------       --------
                                          $187,355    $83,912      $92,117     $(177,818)      $185,566
                                          ========    =======      =======     =========       ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Current maturities of long-term debt   $    212    $    --      $   246     $      --       $    458
   Accounts payable                          9,305         --        5,924            --         15,229
   Accrued wages and benefits                6,009         --        6,839            --         12,848
   Accrued interest                          2,995         --           --            --          2,995
   Other accrued liabilities                20,159         --       26,579       (38,719)         8,019
   Income taxes payable                      1,052         --          751            --          1,803
                                          --------    -------      -------     ---------       --------
      Total current liabilities             39,732         --       40,339       (38,719)        41,352
Long-term debt, net                        125,493         --          148            --        125,641
Other long-term liabilities                 12,709         13        1,133            --         13,855
                                          --------    -------      -------     ---------       --------
      Total liabilities                    177,934         13       41,620       (38,719)       180,848
                                          --------    -------      -------     ---------       --------
Shareholder's equity (deficit)               9,421     83,899       50,497      (139,099)         4,718
                                          --------    -------      -------     ---------       --------
                                          $187,355    $83,912      $92,117     $(177,818)      $185,566
                                          ========    =======      =======     =========       ========
</TABLE>


                                       20

<PAGE>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2006
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  NON -
                                          ISSUER   GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                         -------   ---------   ----------   ------------   ------------
<S>                                      <C>       <C>         <C>          <C>            <C>
Net sales                                $60,008    $    --     $ 52,760      $(28,696)      $ 84,072
Cost of sales                             34,974         --       38,057       (27,641)        45,390
                                         -------    -------     --------      --------       --------
         Gross profit                     25,034         --       14,703        (1,055)        38,682
                                         -------    -------     --------      --------       --------
Operating expenses:
   Engineering                             2,808         --        2,207            --          5,015
   Selling, general and administrative    14,298         --        9,759            --         24,057
   Restructuring charges                     343         --           --            --            343
                                         -------    -------     --------      --------       --------
                                          17,449         --       11,966            --         29,415
                                         -------    -------     --------      --------       --------
      Operating income (loss)              7,585         --        2,737        (1,055)         9,267
Interest expense                          (3,936)        85         (249)           --         (4,100)
Other income (expense), net                1,423         --         (784)           --            639
Equity in earnings of subsidiaries         1,255      1,170           --        (2,425)            --
                                         -------    -------     --------      --------       --------
Income (loss) before income taxes          6,327      1,255        1,704        (3,480)         5,806
Provision for income taxes                 1,891         --          534            --          2,425
                                         -------    -------     --------      --------       --------
      Net income (loss)                  $ 4,436    $ 1,255     $  1,170      $ (3,480)      $  3,381
                                         =======    =======     ========      ========       ========
</TABLE>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2005
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  NON -
                                          ISSUER   GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                         -------   ---------   ----------   ------------   ------------
<S>                                      <C>       <C>         <C>          <C>            <C>
Net sales                                $55,102    $    --     $ 47,470      $(22,214)      $80,358
Cost of sales                             32,992         --       32,481       (22,150)       43,323
                                         -------    -------     --------      --------       -------
         Gross profit                     22,110         --       14,989           (64)       37,035
                                         -------    -------     --------      --------       -------
Operating expenses:
   Engineering                             2,422         --        1,740            --         4,162
   Selling, general and administrative    13,263         --        8,896            --        22,159
                                         -------    -------     --------      --------       -------
                                          15,685         --       10,636            --        26,321
                                         -------    -------     --------      --------       -------
      Operating income (loss)              6,425         --        4,353           (64)       10,714
Interest expense                          (4,064)       142         (209)           --        (4,131)
Other income (expense), net                  348         --         (123)           --           225
Equity in earnings of subsidiaries         2,847      2,705           --        (5,552)           --
                                         -------    -------     --------      --------       -------
Income (loss) before income taxes          5,556      2,847        4,021        (5,616)        6,808
Provision for income taxes                 1,450         --        1,316            --         2,766
                                         -------    -------     --------      --------       -------
      Net income (loss)                  $ 4,106    $ 2,847     $  2,705      $ (5,616)      $ 4,042
                                         =======    =======     ========      ========       =======
</TABLE>


                                       21

<PAGE>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2006
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   NON -
                                          ISSUER    GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                         --------   ---------   ----------   ------------   ------------
<S>                                      <C>        <C>         <C>          <C>            <C>
Net sales                                $110,367      $ --      $94,883       $(50,133)      $155,117
Cost of sales                              64,870        --       69,312        (48,312)        85,870
                                         --------      ----      -------       --------       --------
         Gross profit                      45,497        --       25,571         (1,821)        69,247
                                         --------      ----      -------       --------       --------
Operating expenses:
   Engineering                              5,478        --        4,291             --          9,769
   Selling, general and administrative     28,626        --       18,327             --         46,953
   Restructuring charges                      880        --           --             --            880
                                         --------      ----      -------       --------       --------
                                           34,984        --       22,618             --         57,602
                                         --------      ----      -------       --------       --------
      Operating income (loss)              10,513        --        2,953         (1,821)        11,645
Interest expense                           (7,892)      165         (460)            --         (8,187)
Other income (expense), net                 2,209        --       (1,374)            --            835
Equity in earnings of subsidiaries            993       828           --         (1,821)            --
                                         --------      ----      -------       --------       --------
Income (loss)  before income taxes          5,823       993        1,119         (3,642)         4,293
Provision for income taxes                  1,281        --          291             --          1,572
                                         --------      ----      -------       --------       --------
      Net income (loss)                  $  4,542      $993      $   828       $ (3,642)      $  2,721
                                         ========      ====      =======       ========       ========
</TABLE>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   NON-
                                          ISSUER    GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                         --------   ---------   ----------   ------------   ------------
<S>                                      <C>        <C>         <C>          <C>            <C>
Net sales                                $104,177     $   --     $90,550       $(40,481)      $154,246
Cost of sales                              62,757         --      61,807        (39,966)        84,598
                                         --------     ------     -------       --------       --------
         Gross profit                      41,420         --      28,743           (515)        69,648
                                         --------     ------     -------       --------       --------
Operating expenses:
   Engineering                              4,911         --       3,543             --          8,454
   Selling, general and administrative     25,831         --      17,525             --         43,356
                                         --------     ------     -------       --------       --------
                                           30,742         --      21,068             --         51,810
                                         --------     ------     -------       --------       --------
      Operating income (loss)              10,678         --       7,675           (515)        17,838
Interest expense                           (8,126)       291        (411)            --         (8,246)
Other income (expense), net                 1,180         --        (184)            --            996
Equity in earnings of subsidiaries          5,051      4,760          --         (9,811)            --
                                         --------     ------     -------       --------       --------
Income (loss) before income taxes           8,783      5,051       7,080        (10,326)        10,588
Provision for income taxes                  1,536         --       2,320             --          3,856
                                         --------     ------     -------       --------       --------
      Net income (loss)                  $  7,247     $5,051     $ 4,760       $(10,326)      $  6,732
                                         ========     ======     =======       ========       ========
</TABLE>


                                       22

<PAGE>

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2006
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        NON-
                                                                ISSUER   GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                                               -------   ---------   ----------   ------------   ------------
<S>                                                            <C>       <C>         <C>          <C>            <C>
TOTAL CASH USED IN OPERATING ACTIVITIES                        $(1,594)     $--       $  (770)         $--         $(2,364)
                                                               -------      ---       -------          ---         -------
INVESTING ACTIVITIES:
   Additions to property, plant and equipment                   (2,270)      --        (1,259)          --          (3,529)
   Proceeds from disposition of assets                           3,989       --            --           --           3,989
   Other                                                           110       --           (21)          --              89
                                                               -------      ---       -------          ---         -------
   Net cash provided by (used in) investing activities           1,829       --        (1,280)          --             549
                                                               -------      ---       -------          ---         -------
FINANCING ACTIVITIES:
   Repayment of long-term debt                                    (106)      --          (128)          --            (234)
   Dividend to parent                                             (580)      --            --           --            (580)
                                                               -------      ---       -------          ---         -------
   Net cash used in financing activities                          (686)      --          (128)          --            (814)
                                                               -------      ---       -------          ---         -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS        --       --           310           --             310
                                                               -------      ---       -------          ---         -------
CASH AND CASH EQUIVALENTS:
   Net decrease                                                   (451)      --        (1,868)          --          (2,319)
   Balance at beginning of period                                3,809       --         9,380           --          13,189
                                                               -------      ---       -------          ---         -------
   Balance at end of period                                    $ 3,358      $--       $ 7,512          $--         $10,870
                                                               =======      ===       =======          ===         =======
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
      Interest                                                 $ 7,259      $--       $   459          $--         $ 7,718
                                                               =======      ===       =======          ===         =======
      Income taxes                                             $   161      $--       $ 1,724          $--         $ 1,885
                                                               =======      ===       =======          ===         =======
</TABLE>

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        NON-
                                                                ISSUER   GUARANTOR   GUARANTORS   ELIMINATIONS   CONSOLIDATED
                                                               -------   ---------   ----------   ------------   ------------
<S>                                                            <C>       <C>         <C>          <C>            <C>
TOTAL CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES          $    54     $(200)     $ 2,085          $--         $ 1,939
                                                               -------     -----      -------          ---         -------
INVESTING ACTIVITIES:
   Additions to property, plant and equipment                   (4,876)       --       (1,576)          --          (6,452)
   Other                                                            55        --           --           --              55
                                                               -------     -----      -------          ---         -------
   Net cash used in investing activities                        (4,821)       --       (1,576)          --          (6,397)
                                                               -------     -----      -------          ---         -------
FINANCING ACTIVITIES:
   Borrowings under revolving lines of credit, net                  --        --       (1,011)          --          (1,011)
   Repayment of long-term debt                                    (106)       --         (124)          --            (230)
   Dividend to parent                                             (456)       --           --           --            (456)
                                                               -------     -----      -------          ---         -------
   Net cash used in financing activities                          (562)       --       (1,135)          --          (1,697)
                                                               -------     -----      -------          ---         -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS        --        --         (380)          --            (380)
                                                               -------     -----      -------          ---         -------
CASH AND CASH EQUIVALENTS:
   Net decrease                                                 (5,329)     (200)      (1,006)          --          (6,535)
   Balance at beginning of period                                8,593       200        6,166           --          14,959
                                                               -------     -----      -------          ---         -------
   Balance at end of period                                    $ 3,264     $  --      $ 5,160          $--         $ 8,424
                                                               =======     =====      =======          ===         =======
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
      Interest                                                 $ 7,188     $  --      $   411          $--         $ 7,599
                                                               =======     =====      =======          ===         =======
      Income taxes                                             $   277     $  --      $ 2,652          $--         $ 2,929
                                                               =======     =====      =======          ===         =======
</TABLE>


                                       23
<PAGE>

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 report, contains forward-looking
statements, including, without limitation, statements relating to our 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 Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. Any such forward-looking
statements involve known and unknown risks and uncertainties and our actual
results may differ materially from those forward-looking statements. While made
in good faith based on information currently available to management, we cannot
assure you that such opinions or expectations will be achieved or accomplished.
We do not undertake to update, revise or correct any of the forward-looking
information contained in this report. The following factors, in addition to
those discussed elsewhere in this report, are representative of those factors
that could affect our future results and could cause such 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 and success of the
implementation of changes in our operations to effect cost savings; (vi)
opportunities that may be presented to and pursued by us; (vii) our financial
resources, including our ability to access external sources of capital; and
(viii) such other risks and uncertainties as are detailed from time to time in
our reports and filings with the Securities and Exchange Commission.

Management's Discussion and Analysis of Financial Condition and Results of
Operations is provided solely with respect to Telex and its subsidiaries since
substantially all of the Company's operations are conducted by Telex. However,
Intermediate has outstanding debt securities. Accordingly, information with
respect to interest expense of Intermediate is also provided herein. The
discussion of liquidity and capital resources pertains to Telex and its
consolidated subsidiaries. Telex and Intermediate were formed in connection with
the November 2003 restructuring of Old Telex's debt obligations and related
corporate restructuring.

PENDING MERGER

On June 28, 2006, we announced that the board of directors of Old Telex had
unanimously approved a strategic merger with an indirect subsidiary of Robert
Bosch GmbH. At the effective time of the merger all publicly registered debt of
Old Telex, including the 11-1/2% Senior Secured Notes due October 15, 2008
issued by Telex and the 13% Senior Subordinated Discount Notes due January 15,
2009 issued by Intermediate, will be satisfied and discharged in accordance with
the merger agreement. The merger is subject to the receipt of certain regulatory
approvals, including the termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary
closing conditions, and is expected to close during the third quarter of 2006.
Additional information regarding the merger is contained in the Form 8-K filing
of June 30, 2006.


                                       24

<PAGE>

DESCRIPTION OF BUSINESS

We are a worldwide industry leader in the design, manufacture, and marketing of
audio and communications products and systems to commercial, professional, and
industrial customers. Our product lines include sophisticated loudspeaker
systems, wired and wireless intercom systems, mixing consoles, digital audio
duplication products, amplifiers, wired and wireless microphones, military and
aviation products, land mobile communication systems, wireless assistive
listening systems and other related products.

We have two business segments: Professional Audio and Advanced Communication
Technologies. Professional Audio consists of five product lines within the
overall professional audio market, including: (i) permanently installed sound
systems; (ii) sound products used by professional musicians and sold principally
through retail channels; (iii) sound products used in professional concerts,
recording projects and radio and television broadcasts; (iv) professional
communication products, including advanced digital matrix intercoms used by
broadcasters (including all major television networks) to control production
communications, intercoms, headsets and wireless communications systems used by
professional, college and high school football teams and stadiums and other
professional and school sports teams as well as by utilities, aerospace and
industrial organizations; and (v) wired and wireless microphones used in the
education, sports, broadcast, music and religious markets.

Advanced Communication Technologies targets five principal product markets
including: (i) digital audio duplication products for the religious, education
and enterprise markets, including talking book products for the blind and
reading disabled markets; (ii) military/aviation communication products for the
military and aviation markets; (iii) wireless networking products serving the
original equipment manufacturer, wireless internet service provider and medical
telemetry markets; (iv) land mobile and dispatch communication products for the
public safety, military and industrial markets; and (v) audio and wireless
education products for classroom and computer based education markets.

We maintain assets and/or operations in a number of foreign jurisdictions, the
most significant of which are Germany, the United Kingdom, Japan, Singapore,
China, and Hong Kong. In addition, we conduct business in local currency in many
countries, the most significant of which are Germany, the United Kingdom, Japan,
Singapore, Hong Kong, Canada and France. Exposure to U.S. dollar/Euro and U.S.
dollar/British pound exchange rate volatility is mitigated to some extent by our
ability to source production needs with existing manufacturing capacity in
Germany and Great Britain. The exposure to 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, we have a direct and continuing exposure to
both positive and negative foreign currency movements.

We report foreign exchange gains or losses on transactions as part of other
(income) expense. Gains and losses on translation of foreign currency
denominated balance sheets are classified as currency translation adjustments
and are included in "accumulated other comprehensive loss" as part of
shareholder's equity.


                                       25

<PAGE>

CRITICAL ACCOUNTING POLICIES

There has been no material change in our Critical Accounting Policies as
disclosed in our Annual Report on Form 10-K for the year ended December 31,
2005.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, information regarding
certain items in Telex's condensed consolidated statements of operations
(dollars in thousands):

<TABLE>
<CAPTION>
                                              Three months ended              Six months ended
                                         ----------------------------   ----------------------------
                                         June 30,   June 30,      %     June 30,   June 30,      %
                                           2006       2005     Change     2006       2005     Change
                                         --------   --------   ------   --------   --------   ------
<S>                                      <C>        <C>        <C>      <C>        <C>        <C>
Net sales:
   Professional Audio                    $71,031    $65,494      8.5%   $128,736   $123,041     4.6%
   Advanced Communication Technologies    13,041     14,864    -12.3%     26,381     31,205   -15.5%
                                         -------    -------    -----    --------   --------   -----
   Total net sales                       $84,072    $80,358      4.6%   $155,117   $154,246     0.6%
                                         =======    =======    -----    ========   ========   -----
Total gross profit                       $38,682    $37,035             $ 69,247   $ 69,648
   % of sales                               46.0%      46.1%                44.6%      45.2%
Operating income                         $ 9,267    $10,714             $ 11,645   $ 17,838
                                         =======    =======             ========   ========
Net income                               $ 3,381    $ 4,042             $  2,721   $  6,732
                                         =======    =======             ========   ========
</TABLE>

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2006 COMPARED TO THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2005

Net sales. Net sales increased $3.7 million, or 4.6%, from $80.4 million for the
three months ended June 30, 2005 to $84.1 million for the three months ended
June 30, 2006. Sales increased in all our geographic marketplaces, with Europe
experiencing the largest increase. Net sales in the Professional Audio segment
increased, but were partially offset by a decrease in Advanced Communication
Technologies sales for the three months ended June 30, 2006 compared to the
corresponding period in 2005.

Our six-month net sales increased $0.9 million, or 0.6%, from $154.2 million for
the six months ended June 30, 2005 to $155.1 million for the six months ended
June 30, 2006. Net sales increased in the Professional Audio segment, but were
partially offset by a decrease in Advanced Communication Technologies sales.

Net sales in the Professional Audio segment increased $5.5 million, or 8.5%,
from $65.5 million for the three months ended June 30, 2005 to $71.0 million for
the three months ended June 30, 2006. Sales increased in the intercom, speaker,
signal processor, and microphone product groups. Partially offsetting this sales
increase was a decrease in the console and system electronics product sales.
Six-month net sales increased $5.7 million, or 4.6%, from $123.0 million for the
six months ended June 30, 2005 to $128.7 million for the six months ended June
30, 2006. Similar to the three months ended June 30, 2006, sales decreases in
the system electronic and console product groups were offset by larger increases
in the rest of the Professional Audio Segment.


                                       26

<PAGE>

Net sales in the Advanced Communication Technologies segment decreased $1.9
million, or 12.3%, from $14.9 million for the three months ended June 30, 2005
to $13.0 million for the three months ended June 30, 2006. The decrease in net
sales is primarily attributed to lower digital duplication products. We ceased
production of various analog duplication products in late 2005 and expect sales
to continue to decrease throughout 2006 as the remaining inventory is sold off.
Six-month net sales decreased $4.8 million, or 15.5%, from $31.2 million for the
six months ended June 30, 2005 to $26.4 million for the six months ended June
30, 2006. The decrease for the six months of 2006 compared to the six months of
2005 is primarily from the previously mentioned lower duplication product sales
and to lower landmobile sales. The Advanced Communication Technologies segment
experienced growth in its talking book product sales, which offset some of the
decrease.

Gross profit. Gross profit increased $1.7 million, or 4.4%, from $37.0 million
for the three months ended June 30, 2005 to $38.7 million for the three months
ended June 30, 2006. Gross profit decreased $0.4 million, or 0.6%, from $69.6
million for the six months ended June 30, 2005 to $69.2 million for the six
months ended June 30, 2006. The gross margin rate decreased to 46.0% for the
three months ended June 30, 2006 compared to a gross margin rate of 46.1% for
the three months ended June 30, 2005 and the gross margin rate decreased to
44.6% for the six months ended June 30, 2006 compared to a gross margin rate of
45.2% for the six months ended June 30, 2005.

The gross margin rate for the Professional Audio segment decreased from 46.7%
for the three months ended June 30, 2005 to 44.8% for the three months ended
June 30, 2006. The gross margin rate decreased from 45.5% for the six months
ended June 30, 2005 to 43.6% for the six months ended June 30, 2006. The
decrease in the gross margin rate is attributed primarily to lower margins in
our systems electronics group. Lower volume in our United Kingdom manufacturing
facility is also negatively impacting the gross margin rate.

The gross margin rate for the Advanced Communication Technologies segment
increased from 43.3% for the three months ended June 30, 2005 to 52.6% for the
three months ended June 30, 2006. The gross margin rate increased from 43.8% for
the six months ended June 30, 2005 to 49.5% for the six months ended June 30,
2006. This increase is attributed primarily to improved product mix as well as
lower manufacturing costs associated with products made in our new China
facility.

Engineering. Engineering expenses increased $0.8 million, or 20.5%, from $4.2
million for the three months ended June 30, 2005 to $5.0 million for the three
months ended June 30, 2006. Engineering expenses increased $1.3 million, or
15.6%, from $8.5 million for the six months ended June 30, 2005 to $9.8 million
for the six months ended June 30, 2006. A majority of this increase was due to
our investment in the Professional Audio segment in the United Kingdom and
Germany subsidiaries.

Selling, general and administrative. Selling, general and administrative
expenses increased $1.9 million, or 8.6%, from $22.2 million for the three
months ended June 30, 2005 to $24.1 million for the three months ended June 30,
2006. Selling, general and administrative expenses increased $3.6 million, or
8.4%, from $43.4 million for the six months ended June 30, 2005 to $47.0 million
for the six months ended June 30, 2006. As we noted in the first quarter, we
expected total selling, general and administrative expenses to increase slightly
in the second


                                       27

<PAGE>

quarter, primarily in the U.S., related to new product launch campaigns and
increased sales and marketing personnel.

Interest expense. Interest expense consists of (in thousands):

<TABLE>
<CAPTION>
                                                Three months ended       Six months ended
                                                  June 30, 2006           June 30, 2006
                                              ---------------------   ---------------------
                                               Telex   Intermediate    Telex   Intermediate
                                              ------   ------------   ------   ------------
<S>                                           <C>      <C>            <C>      <C>
Cash interest
   11.5 % Senior Secured Notes                $3,594      $3,594      $7,188      $ 7,188
   13.0% Senior Subordinated Discount Notes       --         243          --          480
   Other                                         148         148         282          282
                                              ------      ------      ------      -------
   Total cash interest                         3,742       3,985       7,470        7,950

Non-cash interest:
   Amortization of deferred financing costs      342         392         685          785
   Amortization of debt issuance discount         16       3,237          32        6,354
                                              ------      ------      ------      -------
   Total non-cash interest                       358       3,629         717        7,139
                                              ------      ------      ------      -------
Total interest expense                        $4,100      $7,614      $8,187      $15,089
                                              ------      ------      ------      -------
</TABLE>

<TABLE>
<CAPTION>
                                                Three months ended       Six months ended
                                                  June 30, 2005           June 30, 2005
                                              ---------------------   ---------------------
                                               Telex   Intermediate    Telex   Intermediate
                                              ------   ------------   ------   ------------
<S>                                           <C>      <C>            <C>      <C>
Cash interest
   11.5 % Senior Secured Notes                $3,594      $3,594      $7,188      $ 7,188
   13.0% Senior Subordinated Discount Notes       --         217          --          427
   Other                                         175         175         334          334
                                              ------      ------      ------      -------
   Total cash interest                         3,769       3,986       7,522        7,949

Non-cash interest:
   Amortization of deferred financing costs      342         392         684          784
   Amortization of debt issuance discount         20       2,797          40        5,492
                                              ------      ------      ------      -------
   Total non-cash interest                       362       3,189         724        6,276
                                              ------      ------      ------      -------
Total interest expense                        $4,131      $7,175      $8,246      $14,225
                                              ------      ------      ------      -------
(Decrease) increase in interest expense       $  (31)     $  439      $  (59)     $   864
                                              ------      ------      ------      -------
</TABLE>

Telex interest expense decreased because we had less foreign borrowings during
2006. Intermediate expense increased due to higher amortization of debt issuance
discount.

Other income, net. Other income of $0.6 million for the three months ended June
30, 2006 is principally from the gain on the sale of our Blue Earth, Minnesota
facility. Other income of $0.2 million for the three months ended June 30, 2005
is mainly due to foreign exchange gains. For the six months ended June 30, 2006,
other income of $0.8 million is principally from the gain on the sale of our
Blue Earth, Minnesota facility, in addition to interest income and earnings from
our LLC. For the six months ended June 30, 2005, other income of $1.0 million is
principally from interest income received from the Internal Revenue Service
("IRS") on an R&D tax credit and adjustment of previously recognized interest on
amounts owed to the IRS.

Income Taxes. Intermediate and Telex file a consolidated U.S. federal income tax
return with Old Telex. The tax provision recorded by Telex is calculated on a
separate company basis as required under a tax sharing agreement with Old Telex.
Telex recorded a total income tax expense of $1.6 million for the six months
ended June 30, 2006 resulting in an effective tax rate of 36.6%. Income tax
expense was $3.9 million for the six months ended June 30, 2005 and the
effective tax rate was 36.4%. Telex has a valuation allowance of $0.9 million as
of June 30, 2006 for certain deferred tax assets because of the uncertainty
regarding their realization.

The total income tax provision at the consolidated Intermediate level is the
same as Telex's because the incremental losses being generated by Intermediate
do not provide a current benefit and the deferred benefit is entirely offset by
a valuation allowance. Intermediate, including


                                       28

<PAGE>

Telex and its consolidated subsidiaries, has significant U.S. deferred tax
assets resulting from deductible temporary differences, which consist mainly of
interest expense on its Senior Subordinated Discount Notes. Unlike Telex on a
separate company basis, Intermediate has a history of losses in the U.S., which
weighs heavily in determining the need for a valuation allowance. Given
Intermediate's history of losses and expected continuation of the losses, a
valuation allowance has been established for all of Intermediate's U.S. net
deferred tax assets as of June 30, 2006. Intermediate will reduce the valuation
allowance when, and if, Intermediate determines that the deferred tax assets are
more likely than not to be realized.

Telex recorded a payable to Old Telex of $7.8 million at June 30, 2006 and $6.2
million at December 31, 2005, resulting primarily from Telex utilizing net
operating losses that had been retained by Old Telex.

With the exception of Japan, accumulated and current unremitted earnings of the
Company's foreign subsidiaries are deemed to be reinvested in each country and
are not expected to be remitted. As such, no U.S. taxes have been provided for
such foreign earnings.

LIQUIDITY AND CAPITAL RESOURCES

The following discussion about liquidity and capital resources pertains to Telex
and its consolidated subsidiaries.

At June 30, 2006, we had cash and cash equivalents of $10.9 million compared to
$13.2 million at December 31, 2005.

Our principal source of funds for the three months ended June 30, 2006 consisted
of our beginning cash balance and $0.5 million of cash provided by net investing
activities. Our principal uses of funds were for capital expenditures of $3.5
million. Our principal source of funds for the six months ended June 30, 2005
consisted of our beginning cash balance and $1.9 million of cash provided by net
operating activities. Our principal use of funds was for capital expenditures of
$6.5 million and financing activities of $1.7 million.

Our investing activities consist mainly of capital expenditures to maintain
facilities, acquire machines and tooling, update certain manufacturing
processes, update information systems and improve efficiency.

Our accounts receivable balance of $56.8 million as of June 30, 2006 increased
$5.8 million from $51.0 million as of December 31, 2005. Excluding the impact of
foreign currency rate movements, our accounts receivable increased $4.0 million
from December 31, 2005. The increase is mainly the result of increased sales in
May and June 2006, specifically at our Germany subsidiary where sales increased
by $3.6 million in the second quarter of 2006 compared to the fourth quarter of
2005. We are not aware of any significant credit risks at June 30, 2006 that
could negatively impact future cash receipts from customers.

Our inventories of $64.4 million as of June 30, 2006 increased $12.7 million
from $51.7 million at December 31, 2005. Excluding the impact of foreign
currency rate movements, our inventories increased $10.7 million from December
31, 2005. We increased our raw materials inventories by $7.0 million as the
seasonal demand for select products increases, to meet the


                                       29
<PAGE>

demand of the launch of our new digital console and to prepare for new
requirements related to products sold in the European Union. We expect inventory
levels to decrease over the remainder of 2006.

Our consolidated indebtedness remained relatively unchanged at $125.9 million at
June 30, 2006 compared to $126.1 million at December 31, 2005. Our debt consists
of $125.0 million of 11 1/2% Senior Secured Notes due October 2008 and $0.9
million of other debt in the U.S. and Germany. In addition, our parent's
(Intermediate) debt consists of $88.6 million of 13% senior subordinated
discount notes due January 2009. These notes increased $6.3 million in the six
months ended June 30, 2006 reflecting amortization of the debt discount.

We rely mainly on internally generated funds and, to the extent necessary,
borrowings under the U.S. revolving credit facility and foreign working capital
lines to meet our liquidity needs. Our liquidity needs arise primarily for
interest payments, working capital needs and capital expenditure requirements.

Our current credit facilities include a U.S. $15.0 million senior secured credit
facility entered into November 19, 2003 (expiring July 12, 2008), subject to
certain borrowing base limitations. The credit facility is secured by
substantially all of our and our domestic subsidiaries' current and future
assets. In addition, we have foreign working capital lines (with on demand
repayment provisions), subject to certain limitations, of $10.2 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.

At June 30, 2006, we had no borrowings outstanding under our credit facility and
working capital lines. The net availability under our lines, after deduction for
open letters of credit and borrowing base limitations, was $24.2 million.

As of June 30, 2006, we made an employer contribution to our U.S. pension plan
of $0.2 million, with an additional $0.2 million made in July. Remaining
contributions totaling $1.2 million for the 2005 and 2006 plan years will be
funded in September and October.


                                       30

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are 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. We have entered into various financial instruments to manage
this risk. The counterparties to these transactions are major financial
institutions. We do not enter into derivatives or other financial instruments
for trading or speculative purposes.

EXCHANGE RATE SENSITIVITY ANALYSIS

We enter into forward exchange contracts principally to hedge the currency
fluctuations in transactions denominated in foreign currencies, thereby limiting
our exposure to changes in exchange rates. During the six months ended June 30,
2006, 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 our statement of operations.

At June 30, 2006, we had outstanding foreign forward exchange contracts with a
notional amount of $33.5 million with a weighted average maturity of 51 days.

At June 30, 2006, 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 $3.4 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 transaction being hedged.

INTEREST RATE AND DEBT SENSITIVITY ANALYSIS

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

At June 30, 2006, Telex had fixed rate debt of $125.3 million and an
interest-free loan of $0.6 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 this debt by
approximately $2.5 million. Intermediate had incremental fixed rate debt of
$88.6 million and a one-percentage point decrease in interest rates would
increase the unrealized fair market value of this debt by approximately $2.1
million.


                                       31

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of
our management, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the design and operation of
Intermediate's disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of June 30, 2006. Based on that evaluation,
our management, including the CEO and CFO, concluded (i) that our disclosure
controls and procedures were effective as of the end of the period to ensure
that the information that we are required to disclose in the reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission's rules and forms, and (ii)
that the information that is required to be reported is accumulated and
communicated to management, including our principal executive and financial
officers, as appropriate, to allow timely decisions regarding required
disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting which
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting. The Company has implemented its U.S. based,
worldwide information technology application to our major foreign locations. Our
Germany subsidiary went live on the system in the first quarter of 2006.
Management does not currently believe that this implementation will adversely
affect the Company's internal control over financial reporting.


                                       32

<PAGE>

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

          There have been no material changes in the risks to our business
described in Item 1A of our Report on Form 10-K for the year ended December 31,
2005.

ITEM 6. EXHIBITS

<TABLE>
<CAPTION>
Exhibits
--------
<S>        <C>
  2.1      Agreement and Plan of Merger by and among Professional Communications
           Security & Imaging International Holdings BV, STHNL Acquisition
           Corp., Telex Communications Holdings, Inc., and FS Private
           Investments III LLC as the Representative of the Equity Holders,
           dated as of June 28, 2006 (incorporated by reference to Exhibit 2.1
           to the Company's Current Report on Form 8-K, filed June 30, 2006).

  2.2      Amendment No. 1 dated June 28, 2006 to the Agreement and Plan of
           Merger referred to in Exhibit 2.1(incorporated by reference to
           Exhibit 2.2 to the Company's Current Report on Form 8-K, filed June
           30, 2006).

  31.1     Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
           under the Securities Exchange Act of 1934, as amended.

  31.2     Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
           under the Securities Exchange Act of 1934, as amended.

  32.1     Certification of Chief Executive Officer and Chief Financial Officer
           pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>


                                       33

<PAGE>

                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934, EACH OF THE REGISTRANTS HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, AS OF THE 8TH DAY OF
AUGUST, 2006.

TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
TELEX COMMUNICATIONS, INC.


Dated: August 8, 2006                   By: /s/ Raymond V. Malpocher
                                            ------------------------------------
                                            Raymond V. Malpocher
                                            President and Chief Executive
                                            Officer


Dated: August 8, 2006                   By: /s/ Gregory W. Richter
                                            ------------------------------------
                                            Gregory W. Richter
                                            Vice President and Chief Financial
                                            Officer


                                       34

<PAGE>

                 TELEX COMMUNICATIONS INTERMEDIATE HOLDINGS, LLC
                           TELEX COMMUNICATIONS, INC.
                                    FORM 10-Q
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            DESCRIPTION OF DOCUMENT
--------                          -----------------------
<S>        <C>
  2.1      Agreement and Plan of Merger by and among Professional Communications
           Security & Imaging International Holdings BV, STHNL Acquisition
           Corp., Telex Communications Holdings, Inc., and FS Private
           Investments III LLC as the Representative of the Equity Holders,
           dated as of June 28, 2006 (incorporated by reference to Exhibit 2.1
           to the Company's Current Report on Form 8-K, filed June 30, 2006).

  2.2      Amendment No. 1 dated June 28, 2006 to the Agreement and Plan of
           Merger referred to in Exhibit 2.1 (incorporated by reference to
           Exhibit 2.2 to the Company's Current Report on Form 8-K, filed June
           30, 2006).

  31.1     Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
           under the Securities Exchange Act of 1934, as amended.

  31.2     Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
           under the Securities Exchange Act of 1934, as amended.

  32.1     Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>


                                       35