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                                    FORM 10-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

For the fiscal year ended September 30, 1998

                                       OR

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

For the transition period from __________________ to ______________________

                         Commission file number 1-14234

                          CARIBINER INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                  13-3466655
(State or other jurisdiction of                 (I.R.S. employer
 incorporation or organization)                identification no.)

   16 West 61st Street, New York, NY                               10023
(Address of principal executive offices)                         (Zip code)

                                 (212) 541-5300
              (Registrant's telephone number, including area code)

           Securities Registered Pursuant to Section 12(b) of the Act:

        Title of each class                Name of exchange on which registered
Common Stock, par value $0.01 per share           New York Stock Exchange

           Securities Registered Pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.         /  /

As of December 22, 1998, the aggregate market value of voting stock held by
non-affiliates of the registrant was $64,250,998.

As of December 22, 1998, the registrant had 23,693,254 shares of its common
stock, par value $0.01 per share (the "Common Stock"), issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

(1) portions of the registrant's definitive proxy statement (to be filed
pursuant to Regulation 14A) for the 1999 Annual Meeting of Stockholders (the
"Proxy Statement") are incorporated by reference into Part III hereof.


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                                     Part I

Item 1. Business

Caribiner International, Inc. is a leading international producer of meetings,
events and training programs, a provider of audiovisual equipment rentals, sales
and installations and related staging services, and a provider of related
corporate meeting services and business communications services that enable
businesses to inform, sell to and train their sales forces, dealers,
franchisees, partners, stockholders and employees. As used herein, the terms
"Caribiner" or the "Company" refer to Caribiner International, Inc. and its
subsidiaries, and the references to a fiscal year are to the Company's fiscal
year ended September 30 in the referenced year.

Business activities and events that generate a need for business communications
and corporate meeting services include sales meetings, product launches,
training and education of employees and dealers, development of strategic and
organizational communications, conferences, stockholder meetings and other
executive management presentations that are used to convey important information
about the business and/or its products. Large-scale events and programs to
communicate essential corporate messages are often not part of a company's core
businesses because of the unique skills necessary to develop, produce and
successfully stage such events. As a result, many companies look to engage
outside firms to perform these functions. In addition, large corporate events
tend not to occur regularly, depending, for example, on timing of product
roll-outs, changing competitive environments and shifts in corporate strategy,
which makes it relatively costly to maintain the internal resources to create
and execute these events.

The Company offers a wide range of business communications services, including
conceptualizing, planning and producing corporate meetings and events and
providing audiovisual equipment rentals, sales and related staging services for
such meetings and events, developing training and educational materials relating
to new job skills, products, systems and organizational processes, handling
internal corporate communications and creating interactive trade show exhibits.
The Company believes it has benefited from a trend among major corporations
toward increased corporate outsourcing of meetings, events, training and
communications. The services can be delivered in all forms of media, including
film, interactive technologies (including CD-ROM), videotape, slides, computer
graphics and animation, print and multimedia.

Recent Acquisitions and Dispositions

One of the components of the Company's growth strategy has been to expand its
client base and service offerings by making acquisitions in the business
communications services industry. To this end, during the past five full fiscal
years Caribiner completed over 25 acquisitions. The following provides a brief
summary of the acquisitions completed by Caribiner since October 1, 1997.

In October, 1997, the Company acquired all of the capital stock of Spectrum Data
Systems, Inc. ("Spectrum Data"), an Atlanta-based provider of audiovisual
presentation systems design, installation and services with a primary customer
base in the Southeastern U.S. Spectrum Data had revenue of approximately $10.0
million for the year ended December 31, 1996. The acquisition has enabled the
Company to provide a more comprehensive range of audiovisual services to its
clients in the southeastern U.S.

In November, 1997, the Company acquired Visual Action Holdings plc (now known as
Visual Action Holdings Limited) ("Visual Action"), a United Kingdom public
company. Visual Action provides corporate meeting services in the United States
and the United Kingdom, including audiovisual and exhibition services. If
adjusted for certain subsequent acquisitions and dispositions, Visual Action
would have reported revenue, on a pro forma basis, of approximately $158.1
million for the year ended December 31, 1996, assuming that such acquisitions
and dispositions had occurred as of the beginning of the year. The total cash
acquisition price of all of the outstanding capital shares of Visual Action was
approximately $253.0 million (excluding transaction costs). In May, 1998, the
Company sold the video production equipment rental operations of Visual Action
for approximately $27.6 million in cash (excluding transaction costs).
In July, 1998, the Company completed the disposition of Visual Action's
U.K.-based audiovisual staging operations for approximately $26.7 million in
cash (excluding transaction costs). The proceeds from each such disposition were
used to repay outstanding indebtedness.

In December, 1997, the Company completed the acquisition of Consumer Access
Limited ("Consumer Access"), a business communications services provider based
in Hong Kong. Consumer Access had revenue of approximately

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$3.0 million for the year ended March 31, 1997. The Company integrated Consumer
Access into its Hong Kong office, which was opened in June, 1996.

In January, 1998, the Company acquired RightSource, Inc. ("RightSource"), a
marketing support and training services company, focusing primarily on product
launches and customer education for the information technology industry, with
offices in South Carolina and Connecticut, as well as training centers in
several other states. RightSource had revenue of approximately $22 million for
the nine months ended September 30, 1997. RightSource operates as a subdivision
of the Company's Communications division.

In February, 1998, the Company acquired substantially all of the assets and
assumed certain of the liabilities of The Bridge Design Limited ("Bridge
Design"), a Hong Kong-based provider of design services specializing in
communications and marketing support. Bridge Design reported revenue of
approximately $3.4 million for the year ended March 31, 1997. Similar to
Consumer Access, Bridge Design has been integrated into the Company's Hong Kong
Office.

In June, 1998, the Company acquired substantially all of the assets and certain
of the liabilities of Stagecraft Corporate Theatre ("Stagecraft"), an
Australia-based staging and audiovisual equipment rental company with offices in
Melbourne and Brisbane. Stagecraft was integrated into the Company's previously
existing Australian operations, which it acquired in May, 1997.

Also, in June, 1998, the Company acquired substantially all of the assets and
certain of the liabilities of M.D. McDonald, Inc. ("McDonald"), a Michigan-based
employee training services company specializing in the development of customized
training programs for the automobile industry. McDonald reported revenue of
approximately $1.1 million for the year ended December 31, 1997.

In August, 1998, the Company acquired substantially all of the assets and
certain of the liabilities of The Event Company Pty Ltd. ("TEC"), an
Australia-based producer of corporate meetings and events. TEC reported revenue
of approximately $2.8 million for the fiscal year ended June 30, 1997. TEC has
been integrated into the Company's Australian operations.

Also, in August, 1998, the Company acquired substantially all of the assets and
certain of the liabilities of Motivation Media, Inc. ("Motivation Media"), a
Chicago-based business communications services firm focusing on meeting and
event production and employee education and training programs. Motivation Media
reported revenue of approximately $10.9 million for the fiscal year ended July
31, 1997. Motivation Media has been integrated into the Chicago office of the
Company's Communications division.

In December, 1998, the Company announced that it intends to dispose of certain
non-core assets. The Company expects the net proceeds from any such sales to be
approximately $70 million to $100 million, which it will use to repay bank debt.

Pursuant to the terms of the Company's senior credit facilities, the Company may
not make future acquisitions which require, individually or in the aggregate,
cash consideration in excess of $5,000,000 in any fiscal year without the prior
consent of its lending banks holding greater than 50% of the outstanding
commitments under such facilities, in their reasonable discretion.

Services

Caribiner offers a wide range of business communications services, including
conceptualizing, planning and producing corporate meetings and events,
developing training and educational materials relating to new job skills,
products, systems and organizational processes, handling internal corporate
communications and creating interactive trade show exhibits, all of which are
provided by the Company's Communications division. The Company also provides,
through its audiovisual services divisions (the "AV operations"), audiovisual
equipment rentals, sales and installations and related staging services, as well
as hotel audiovisual outsourcing services. In addition, the Company provides,
through its Melville Exhibition Services ("MES") subsidiary (which was acquired
upon the acquisition of Visual Action), exhibition services, principally in the
United Kingdom, to exhibition organizers, hall owners and exhibitors.

Specifically, Caribiner's services include:

Production of business meetings and events that introduce new products, present
newly designed corporate strategies to targeted audiences or honor a company's
leading contributors.

Audiovisual equipment rentals, sales and installations and related staging
services, including (i) the Company's being the preferred in-house provider of
audiovisual equipment rentals in approximately 500 hotel properties located
throughout the U.S, Mexico and the Caribbean, (ii) and the Company's being a 
supplier of such equipment and services to production companies, other business
communications services companies and corporations for use at meetings, events,
presentations and training programs. The Company also acts as the preferred
drop-off provider to approximately 25 additional hotels.

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Training programs using interactive and technology-driven hardware designed to
improve employee productivity, in the areas of product knowledge, team building,
sales skills, personal skills and behavioral development.

Exhibition services, including the rental of modular stand fittings, furniture,
floor coverings and floral displays, the provision of electrical contracting and
visitor registration services.

Corporate communications programs used to disseminate management's message to
employees and others through various media, including print, film and video and
CD ROM.

Exhibits and displays, which involves the design and development of a company's
trade show exhibit or a visitor's center/lobby display.

Clients

The Company's Communications division targets clients with large or potentially
large recurring needs for business communications services. Caribiner
Communications' client list covers a number of industry sectors including
automotive, information technology, insurance, pharmaceuticals, financial
services, fast food, lodging and petroleum.

Caribiner Communications' clients include ARAMARK, Eastman Kodak Corporation,
Ford Motor Co., Holiday Inn Worldwide, IBM, McDonald's Corporation, Parke-Davis,
a division of Warner Lambert, Schering-Plough and Shell Oil Company.

Caribiner Communications' size and strategic focus on enhancing and establishing
client relationships with large or potentially large accounts permits it to
dedicate personnel to a single client to strengthen and build the relationship
and increase the opportunity for cross-selling to other divisions or departments
of the client. When the Company recognized significant opportunities to expand
its relationship with Ford Motor Co., management decided to increase Company
resources devoted to the servicing of this account. Accordingly, the
Communications division maintains a Detroit facility with approximately 35
full-time employees to service the business communications needs of numerous
individual buyers from the various Ford business units for whom Caribiner
executes projects. Caribiner believes that the strategy it has followed with the
Ford Motor Co. to build and maintain these accounts can be utilized to develop
and build relationships with other clients having a significant need for
business communications services.

The Company's AV operations target hotels with sizable conference space whose
guests' meetings and events utilize audiovisual equipment; corporate clients
with significant audiovisual equipment needs and production companies; trade
associations and other business communications services companies that require
audiovisual and staging services. With respect to hotel audiovisual outsourcing,
the Company's AV operations serve members of various national hotel chains,
including those of Westin, Doubletree, Holiday Inn, Hyatt, Red Lion and
Sheraton. In addition to entering into agreements with hotels on an individual
basis, the Company has also entered into agreements with the Omni Hotels,
Inter-Continental Hotels and Doubletree Hotels Corporation pursuant to which
such companies promote the Company's audiovisual outsourcing services to
properties operated or franchised under their respective flags. The Company has
also entered into an agreement with an affiliate of Starwood Hotels & Resorts
Worldwide, Inc. ("Starwood") pursuant to which Starwood promotes the Company's
hotel audiovisual outsourcing services to various hotels owned and/or managed by
Starwood and certain of its affiliates.

MES's customers include exhibition and trade show organizers and conference and
convention center owners and/or operators, located principally in the United
Kingdom.

Among the ways the Company seeks to differentiate itself to clients from other
providers of business communications and corporate meeting services are by its
customer service, its breadth of creative and technical expertise, its ability
to execute programs successfully, with complete "back-up" system technology, its
demonstrated ability to produce a broad range of projects, large and small,
across a number of industries, its full range of business communications
services, its continuous investment in new technology and equipment, its size
and its international presence.

Sales and Marketing

Historically, Caribiner has acquired new clients and marketed its services
primarily by cross-selling to existing clients, responding to requests for
proposals, pursuing client referrals, identifying prospects through research of
a potential client's business communications needs, actively marketing to
potential new customers and through acquisitions of other business
communications services providers. The Company solicits prospective accounts
through personal contacts by members of Caribiner's senior management as well as
through the Company's managers responsible for

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business development. With respect to the Communications division, when a new
account is established, the Company assigns a sales executive (an account
manager) to the client to build the relationship and ensure that the client's
needs are being met, and to seek out further opportunities to penetrate this
account. The Communications division employs a full-time sales and marketing
staff and has dedicated a group of sales and marketing executives to identify
potential client relationship opportunities and promote Caribiner's expertise
and range of services. Generally, account managers are assigned a number of
different accounts which may be comprised of a number of businesses or a number
of divisions, departments or groups within the same business.

The Company's AV operations which are divided into three subdivisions (as
described below) market their services by type of service offered and by
geographic region. As with the Communications division, personnel are assigned
to those accounts that are identified by management to be strategically
significant. In addition, each of the AV operations' subdivisions employs a
full-time sales and marketing staff to evaluate market opportunities and
identify potential clients. The Company's personnel also work with the sales and
marketing personnel of the various hotels in which the Company's AV operations
are the preferred in-house provider to promote the hotels' meeting and
conference capabilities, thereby creating additional selling opportunities for
the Company.

Operations

Communications Division. The Communications division's operations in North
America are organized generally along geographic lines and are divided into
three regions - East Coast, Midwest and West Coast. Within each region, the
division maintains local offices within those metropolitan areas where there
tend to be a high concentration of the Company's clients. Each region is run by
a general manager, who is supported by sales executives (the account managers)
who establish and foster customer relationships; creative and technical
personnel who direct concept development; and producers and project managers who
have ultimate responsibility for project execution, media creation and, if
relevant to the project, theatrical staging of an event. Because of the
Communications division's Detroit office's focus on the servicing of only one
client - Ford Motor Co. - this office remains distinct from the regional
reporting structure, but is staffed similarly to the various local offices
within the regions.

In addition, because of the nature of the RightSource service offering, it
operates as a subdivision within the Communications division and works with the
division's regional offices to provide education and training services to such
offices' clients, as well as clients which it has generated on its own. Such
services include the operation of several training centers where customers of
RightSource's clients are trained in the use of such clients' products.

Internationally, the Communications' divisions operations are also organized
generally along geographical lines ((i) United Kingdom, (ii) Hong Kong and (iii)
Australia and New Zealand) and are staffed in a similar manner to the division's
North American offices.

AV Operations. The Company's AV operations are divided into three subdivisons,
generally along product lines and service offerings. The Company's hotel
audiovisual outsourcing division, which is based in Chicago, services the
approximately 500 hotels for which the Company has agreements to be the
preferred in-house provider of audiovisual equipment rental services. To service
each of the hotel properties, the Company employs on-site management and service
representatives who work with the hotels' respective management to assist hotel
guests and customers with their audiovisual equipment and office service needs
and to exploit opportunities to increase the volume of rental activity in such
hotels. In addition to employees maintained within each hotel, the division also
employs a full time sales and marketing staff which seeks out new opportunities
with individual hotels and hotel chains.

The Company's staging and rental services division, which is based in Los
Angeles, provides staging services and audiovisual equipment rentals to
corporate clients, production companies, trade associations and other business
communications services companies that require such services. The staging and
rental services division maintains regional inventory support and sales offices
in various locations throughout the U.S.

The Company's presentation technologies division of the AV operations, which is
based in Atlanta, provides audiovisual equipment installation and design
services to corporate clients (including hotel properties) in the design of
their meeting and conference rooms. This division also assists clients in
efficiently managing their proprietary audiovisual assets. Similar to the hotel
audiovisual outsourcing division, the presentation technologies division
employs, in certain instances as may be needed or requested, on-site personnel
within a client's offices. The division maintains several regional offices with
their own sales, engineering and support staffs to service clients and seek out
opportunities within such regions.

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General. Throughout each of the Company's operating units, each office
supplements its staff with independent contractors or part-time employees where
needed. Caribiner has long-standing relationships with freelance contractors and
part-time employees in various production, technical and creative disciplines,
which, management believes, gives it a competitive advantage in being able to
produce the highest quality events for its customers while keeping overhead
lower and utilizing resources more efficiently.

Caribiner's management emphasizes the coordination of activities between offices
and allocates, when necessary, resources from one office in order to support
another. This coordination of activities allows the Company to serve its clients
at a local level while at the same time providing clients with resources and
expertise of an international organization.

Foreign Operations. The Company's foreign operations, principally located in the
United Kingdom, Asia and Australia and consisting primarily of MES and the
activities of the Communications division's foreign offices, had identifiable
assets, including goodwill, of $55.4 million and $99.4 million at September 30,
1997 and 1998, respectively. Revenues of $52.8 million and $143.9 million, and
operating income of $1.5 million and $12.1 million, related to the Company's
foreign operations are included in the results of operations for the years ended
September 30, 1997 and 1998, respectively. The Company's foreign operations
during the year ended September 30, 1996 were not significant.

Employees

As of October 31, 1998, Caribiner employed approximately 4,100 full-time
employees, of which 3,540 employees were located domestically and 560 were
located internationally.

Except for approximately 25 employees of the Company's hotel audiovisual
outsourcing and audiovisual installation and design subdivisions of the AV
operations, whose terms of employment are covered by a collective bargaining
agreement with a union, the Company has no full-time employees whose employment
is covered by collective bargaining or similar agreements with unions; however,
the Company and its subsidiaries do from time to time independently contract
with or hire part-time union personnel, especially during the production of a
particular meeting or event, and, accordingly, the Company and/or its
subsidiaries, is a party to certain agreements with unions governing the hiring
and terms of employment of such personnel. Over the course of any given project
period, the Company evaluates the production personnel requirements and
determines the extent to which it must supplement its available employee base
with the use of freelance contractors or part-time employees. Depending on the
timing and specific requirements of the events and the number of overlapping
events in any given planning period, the use of freelance contractors and
part-time employees can vary significantly. The Company considers its relations
with its full-time employees, part-time employees and independent contractors to
be good.

Competition

Although no firm data exists with respect to the size of the business
communications and meeting services industry and the number and size of
competitors within the industry, management believes, based on its experience in
the industry, that the business communications and meeting services industry is
highly fragmented. Caribiner believes that no one participant or small number of
participants is dominant in the industry and that its competitors consist
primarily of small, generally regional firms which provide a limited range of
services, although there are several participants in the industry whose
business, like that of Caribiner, is full service in scope. Management believes
that certain competitors have capabilities and resources comparable to and in
certain respects greater than those of the Company. Caribiner also competes with
in-house communications staffs of existing and potential clients.

Management believes that the competitive factors most important in the business
communications and meeting services industry are organizational breadth,
creative, production and technical expertise, demonstrated ability to execute
projects, range of services offered, range of industries serviced, size,
geographical presence and price.

The Company believes its principal strengths are the depth of its creative and
production talent, its ability to consistently meet its clients' objectives and
expectations, its focus on quality and customer service and its ability to
manage effectively and reliably several complex, large-scale projects
contemporaneously. The Company believes it is at a competitive disadvantage in
certain regions where it does not have local offices.

Seasonality

The Company experiences quarterly variations in revenue, operating income and
net income as a result of many factors, including the timing of clients'
meetings and events, delays in or cancellation of clients' product launches and
events, as well as changes in the Company's revenue mix among its various
services offered. Historically, the Company's business has tended to be slower
in the first quarter of its fiscal year mainly due to the Thanksgiving and
Christmas holidays when clients and hotel guests traditionally stage fewer
meetings and events.

Item 2. Properties

Caribiner's corporate headquarters and the New York office of the Communications
division are located in leased offices occupying approximately 40,000 square
feet at 16 West 61st Street, New York, New York 10023-7604. The lease for the
Company's headquarters expires in 2000.



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The Company has entered into a lease for new headquarters and New York office
space located at 498 Seventh Avenue, New York, New York 10018. The lease calls
for the Company to occupy approximately 50,000 square feet of space initially,
with an option to occupy additional space in the future. The lease for the new
headquarters will expire in 2015. The Company expects to relocate to such new
space in summer, 1999.

The Company also leases offices and warehouse space in cities throughout the
United States, as well as in London, Sydney, Melbourne, Brisbane, Auckland,
Wellington, Glasgow and Hong Kong. The Company anticipates that as it expands,
it will require additional office space to support such growth and believes that
suitable additional or alternative space will be available as needed.

Item 3. Legal Proceedings

From time to time, the Company is involved in litigation incidental to its
business. In the opinion of the Company, no such litigation has had or is likely
to have a material adverse effect on the Company's results of operations,
financial condition or liquidity.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 4A. Executive Officers and Directors of the Company

<TABLE>
<CAPTION>

       Name                              Age                            Position
       ----                              ---                            --------
<S>                                      <C>      <C>
Raymond S. Ingleby...................... 35       Chairman of the Board of Caribiner International, Inc.

Christopher A. Sinclair................. 48       President, Chief Executive Officer and Director of
                                                  Caribiner International, Inc.

Robert F. Burlinson..................... 59       Executive Vice President and Chief Financial Officer of
                                                  Caribiner International, Inc.

Mark M. Cohen........................... 51       Executive Vice President of Caribiner International, Inc.
                                                  and Chief Operating Officer of Caribiner Communications

Brian Shepherd.......................... 41       Executive Vice President of Caribiner
                                                  International, Inc. and Chief Executive Officer of
                                                  Caribiner Communications

Errol M. Cook..........................  59       Director

Bryan D. Langton.......................  62       Director

Sidney Lapidus.........................  61       Director

David E. Libowitz......................  35       Director

C. Anthony Wainwright .................  65       Director
</TABLE>

Raymond S. Ingleby has been a director of the Company since its formation in
1989, and Chairman since June, 1993. Mr. Ingleby also served as Chief Executive
Officer of the Company from 1989 to December, 1998. From 1988 through 1993, Mr.
Ingleby served as Chairman and Chief Executive Officer of Ingleby Communications
Corporation ("ICC"), which he founded in 1988. In 1985, Mr. Ingleby, a British
citizen, founded his own advertising company that was engaged in the
installation of advertising displays in hotels, which he sold in 1988.

Christopher A. Sinclair has been President, Chief Executive Officer and a
director of the Company since December, 1998. Prior to his joining the Company,
he served as President and Chief Executive Officer of Cutter Capital LLC, a
venture capital and commercial real estate investment firm from March, 1998 to
December, 1998. From September, 1996 to March, 1998, he served as President and
Chief Executive Officer of Quality Food, Inc., a multi regional


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supermarket chain. Prior thereto, Mr. Sinclair held various senior management
positions with PepsiCo, Inc., including Chairman and Chief Executive Officer of
Pepsi-Cola Company from April, 1996 to July, 1996, President and Chief Executive
Officer of PepsiCo Foods & Beverages International from 1993 to 1996, and
President and Chief Executive Officer of Pepsi-Cola International from 1989 to
1993. Mr. Sinclair is a member of the Board of Directors of Venator Group, Inc.
and Mattel, Inc.

Robert F. Burlinson has been Executive Vice President and Chief Financial
Officer of the Company since July, 1998. Prior to his joining the Company, Mr.
Burlinson served as Vice President and Treasurer of Handy & Harman from
September, 1996 to July, 1998. Prior thereto, Mr. Burlinson served as Senior
Vice President and Chief Financial Officer of The National Guardian Group from
October, 1986 to December, 1995.

Mark M. Cohen has been Executive Vice President of the Company and Chief
Operating Officer of Caribiner Communications since October, 1998. Prior
thereto, Mr. Cohen served as Executive Vice President-Strategic Planning and
Development of the Company from July, 1997 to October, 1998. Prior thereto, Mr.
Cohen served as Executive Vice President of the Company and President of
Caribiner Communications from November, 1995 to June, 1997. Mr. Cohen joined
Caribiner in November, 1994 as Executive Vice President of Caribiner, Inc. and
General Manager of its New York office.

Brian Shepherd has been Executive Vice President of the Company and President of
Caribiner Communications since July, 1997. From November, 1995 until July, 1997,
Mr. Shepherd served as Executive Vice President of Strategic Planning and
International Operations, of the Company. Mr. Shepherd joined the Company as
Vice President of Caribiner, Inc. and General Manager of its Atlanta office in
July, 1995. Prior thereto, Mr. Shepherd was President and Chief Executive
Officer of Imagination (USA) Inc., a subsidiary of Imagination, UK, a
European-based business communications company, from December, 1992 to July,
1995.

Errol M. Cook has been a director of the Company since June, 1992. Mr. Cook is a
Managing Director of E.M. Warburg, Pincus & Co., LLC ("EMW LLC"). Mr. Cook has
been a Managing Director of EMW LLC or its predecessor since March, 1991. Mr.
Cook serves on the board of directors of certain privately held companies.

Bryan D. Langton has been a director of the Company since April, 1996. Mr.
Langton served as Chairman and Chief Executive Officer of Holiday Inn Worldwide
and Holiday Inn, Inc. from February, 1990 to December, 1996. Mr. Langton serves
on the board of directors of Fairfield Communities, Inc.

Sidney Lapidus has been a director of the Company since June, 1992. Mr. Lapidus
is a Managing Director of EMW LLC. Mr. Lapidus has been associated with EMW LLC
or its predecessor since 1967. Mr. Lapidus serves on the board of directors of
Information Holdings, Inc., Lennar Corporation, Knoll, Inc., Grubb & Ellis
Company and Journal Register Company, as well as several privately held
companies.

David E. Libowitz has been a director of the Company since June, 1992. Mr.
Libowitz is a Vice President of EMW LLC and has been associated with EMW LLC or
its predecessor since July, 1991. Mr. Libowitz serves on the board of directors
of Information Holdings, Inc., as well as certain privately held companies.

C. Anthony Wainwright has been a director of the Company since March, 1997. Mr.
Wainwright has served as Vice Chairman of McKinney & Silver, a privately-held
advertising agency, since April, 1997. Mr. Wainwright was Chairman of Harris,
Drury, Cohen, Inc., an advertising agency, from 1995 to February, 1997. Prior
thereto Mr. Wainwright was Chairman of Compton Partners, Saatchi & Saatchi, a
national advertising agency, from 1994 to 1995 and was Vice Chairman of that
company from 1989 to 1994. Mr. Wainwright serves on the Board of Directors of
Marketing Services Group, Inc., American Woodmark Corporation, Del Webb Corp.,
Gibson Greetings, Inc. and Advanced Polymer Systems.


                                       7
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                                     Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

(a) The Common Stock is listed on the New York Stock Exchange under the symbol
"CWC." The following table sets forth on a per share basis, for the periods
indicated, the high and low closing prices of the Common Stock as reported by
the New York Stock Exchange. Such prices have been adjusted to reflect the
2-for-1 stock split effected by the Company on June 20, 1997. The number of 
stockholders of record of Common Stock on December 1, 1998 was 146.

<TABLE>
<CAPTION>

                                                                                     Price Range
                                                                                   ----------------
                                                                                    High       Low
                                                                                   ------     -----
<S>                                                                               <C>       <C>
Fiscal 1998:
         First Quarter........................................................... $46 1/2   $36 11/16
         Second Quarter..........................................................  40 1/2    30 1/2
         Third Quarter...........................................................  41 3/4    16 11/16
         Fourth Quarter..........................................................  18         8 5/16

Fiscal 1997:
         First Quarter...........................................................  25 1/8   $20 7/8
         Second Quarter..........................................................  26 3/4    21 3/4
         Third Quarter...........................................................  35        22 15/16
         Fourth Quarter..........................................................  44 7/8    32 3/4
</TABLE>

The closing price per share of the Common Stock on December 24, 1998 was 8 1/4.

The Company has not paid any dividends with respect to the Common Stock. The
Company presently intends to retain future earnings to finance its growth and
development and therefore does not anticipate any cash dividends in the
foreseeable future. Payment of future dividends, if any, will depend upon future
earnings and capital requirements of the Company and other factors which the
Board of Directors considers appropriate. In addition, the terms of the
Company's credit facility pursuant to which The Chase Manhattan Bank acts as
administrative agent contains limitations on the Company's ability to pay
dividends.

The Company issued and sold the following unregistered securities during the
quarterly period ended September 30, 1998:

On August 7, 1998, the Company issued and sold an aggregate of 53,387 shares of
Common Stock to The Event Company Pty Ltd. in connection with the purchase of
substantially all of the assets and the assumption of certain of the liabilities
of such company.

There were no underwriters employed in connection with the transaction set forth
above.

The transaction described above was effected in reliance upon an exemption from
the registration requirements of the Securities Act of 1933, as amended, on the
basis that such transaction did not involve any public offering. The recipients
of securities in such transaction represented their intentions to acquire the
securities for investment only and not with a view to sell or offer for sale the
securities in connection with any distribution thereof and appropriate legends
were affixed to the securities issued in such transactions.

(b) Not applicable to Company for fiscal year ended September 30, 1998.


                                       8
<PAGE>

Item 6. Selected Financial Data

                           SELECTED FINANCIAL DATA
                      (In thousands, except share data)

The historical selected financial data presented below as of and for the fiscal
years ended September 30, 1994, 1995, 1996, 1997 and 1998, are derived from, and
are qualified by reference to, the consolidated financial statements that have
been audited by Ernst & Young LLP, independent auditors. The data presented
below should be read in conjunction with the Company's consolidated financial
statements and related notes thereto and other information included elsewhere in
this Form 10-K.

<TABLE>
<CAPTION>
                                                                                    Year ended September 30,
                                                                ---------------------------------------------------------------
                                                                   1994         1995          1996         1997         1998
                                                                ----------   ----------   ----------    ----------   ----------
<S>                                                             <C>          <C>          <C>           <C>          <C>
Statement of Operations Data:
Service revenue                                                 $   59,174   $   81,131   $  148,330    $  213,239   $  296,393
Rental revenue                                                          --           --           --       131,843      414,941
Intercompany eliminations                                               --           --           --        (2,824)     (14,556)
                                                                ----------   ----------   ----------    ----------   ----------

      Total revenue                                                 59,174       81,131      148,330       342,258      696,778

Cost of service revenue                                             39,724       54,312       99,797       144,980      204,511
Cost of rental revenue                                                  --           --           --        86,885      299,520
Intercompany eliminations                                               --           --          _--        (2,824)     (14,556)
                                                                ----------   ----------   ----------    ----------   ----------

      Total cost of revenue                                         39,724       54,312       99,797       229,041      489,475
                                                                ----------   ----------   ----------    ----------   ----------

Gross profit                                                        19,450       26,819       48,533       113,217      207,303

Selling, general and administrative expenses                        14,349       19,306       30,442        71,270      153,568
Restructuring charge (a)                                                --           --           --            --        6,953
Non-cash compensation expense (b)                                       --           --        1,072            --           --
Depreciation and amortization                                        2,137        2,330        3,142         8,905       21,586
                                                                ----------   ----------   ----------    ----------   ----------
Total operating expenses                                            16,486       21,636       34,656        80,175      182,107

Equity in income of affiliated company                                  --           --           --            --          688
                                                                ----------   ----------   ----------    ----------   ----------
Operating income                                                     2,964        5,183       13,877        33,042       25,884
Interest expense with related parties                                2,107        2,234        1,199            --           --
Interest expense, other                                                502        1,259          387         2,429       24,325
                                                                ----------   ----------   ----------    ----------   ----------

Income before taxes and extraordinary charge                           355        1,690       12,291        30,613        1,559
Provision for taxes                                                     62          264        4,302        12,551          624
                                                                ----------   ----------   ----------    ----------   ----------
Income before extraordinary charge                                     293        1,426        7,989        18,062          935
Extraordinary charge on early extinguishment of debt
         (net of income taxes of $403) (c)                              --           --           --            --          605
                                                                ----------   ----------   ----------    ----------   ----------
Net income                                                      $      293   $    1,426   $    7,989    $   18,062   $      330
Preferred stock dividends (d)                                         (582)        (655)        (327)           --           --
                                                                ----------   ----------   ----------    ----------   ----------

Net income available to common stockholders                     $     (289)  $      771   $    7,662    $   18,062   $      330
                                                                ----------   ----------   ----------    ----------   ----------
Basic and diluted earnings per common share:
      Income before extraordinary charge                        $     0.60   $     0.25   $     0.53    $     0.83   $     0.04
      Extraordinary charge                                              --           --           --            --        (0.03)
                                                                ----------   ----------   ----------    ----------   ----------
Net income per common share (e)                                 $     0.60   $     0.25   $     0.53    $     0.83   $     0.01
                                                                ==========   ==========   ==========    ==========   ==========

<CAPTION>
                                                                                    Year ended September 30,
                                                                -----------------------------------------------------------------
                                                                   1994         1995          1996         1997         1998
                                                                ----------   ----------   ----------    ----------   ----------
<S>                                                             <C>          <C>          <C>           <C>          <C>
Balance Sheet Data:
Working capital (deficit)                                       $   (1,452)  $      352   $    7,488    $   36,151   $   56,974
Total assets                                                        31,266       45,298      126,322       313,877      697,949
Total debt                                                          24,531       34,175       22,839        61,859      397,240
Stockholders' equity (deficit)                                     (13,249)     (12,434)      53,468       171,434      175,775
</TABLE>

                      See Notes to Selected Financial Data

                                       9
<PAGE>

                        NOTES TO SELECTED FINANCIAL DATA

       (a) In connection with the Company's efforts to integrate its acquired
       businesses, primarily in the audiovisual services division and to
       streamline its organizational structure, the Company recorded an
       aggregate pre-tax restructuring charge of $7.0 million during the year
       ended September 30, 1998, of which $3.8 million and $3.2 million were
       recorded in the three months ended March 31, 1998 and September 30, 1998,
       respectively. The charges related primarily to employee termination and
       severance costs, lease termination costs and certain other asset
       write-offs.

       (b) Non-cash compensation expense for the year ended September 30, 1996
       of $1.1 million (or $0.06 per share) resulting primarily from the vesting
       of non-voting common stock issued at a price lower than its fair market
       value under the Company's 1993 Management Stock Plan which was terminated
       upon consummation of the Company's initial public offering (the "Initial
       Public Offering") of shares of Common Stock in March, 1996.

       (c) In connection with the acquisition of Visual Action Holdings, plc,
       the Company entered into a new credit facility in October, 1997 (the
       "1997 Facilities"). As a result, during the three months ended December
       31, 1997, the Company wrote off approximately $0.6 million (net of taxes
       of $0.4 million) of the remaining unamortized debt issuance costs related
       to the Company's former bank facilities that were repaid from the
       proceeds of the 1997 Facilities.

       (d) All preferred stock was converted into Common Stock in connection
       with the Initial Public Offering.

       (e) Basic and diluted earnings per common share for the years ending
       September 30, 1994, 1995 and 1996 were calculated using the weighted
       average number of shares of Common Stock outstanding during the period,
       assuming Common Stock issued for nominal consideration arising from the
       conversion and exercise of all dilutive securities was outstanding for
       all periods presented.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Certain statements contained herein may be deemed to be forward-looking 
statements as defined in the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and
unknown risks and uncertainties which may cause the Company's actual results in
future periods or plans for future periods to differ materially from what is
currently anticipated. Those risks include, among others, general competitive
factors, the Company's ability to successfully complete and integrate its
acquisitions and to implement operational improvements in its acquired
businesses, the seasonality and episodic nature of the Company's business and
other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission. Other factors and
assumptions not identified above were also involved in the derivation of these
forward-looking statements, and the failure of such other assumptions to be
realized, as well as other factors, may also cause actual results to differ
materially from those projected. The Company assumes no obligation to update
these forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements.

                                       10
<PAGE>
Results of Operations

The following table sets forth, for the periods indicated, certain components of
the Company's operating statement data, including such data as a percentage of
revenue.

<TABLE>
<CAPTION>
                                                                            Year ended September 30,
                                                  -----------------------------------------------------------------------
                                                           1996                     1997                      1998
                                                  --------------------    ---------------------     ---------------------
                                                                          (Dollars in thousands)
<S>                                               <C>           <C>       <C>           <C>         <C>            <C>
Service revenue                                   $ 148,330     100.0%    $ 213,239       62.3%     $ 296,393       42.5%
Rental revenue                                           --        --       131,843       38.5        414,941       59.6
Intercompany eliminations                                --        --        (2,824)      (0.8)       (14,556)      (2.1)
                                                  ---------     -----     ---------      -----      ---------      -----
                                                                                                  
      Total revenue                                 148,330     100.0%      342,258      100.0%       696,778      100.0%
                                                                                                  
Cost of service revenue                              99,797      67.3       144,980       42.4        204,511       29.4
Cost of rental revenue                                   --        --        86,885       25.4        299,520       42.9
Intercompany eliminations                                --        --        (2,824)      (0.8)       (14,556)      (2.1)
                                                  ---------     -----     ---------      -----      ---------      -----
                                                                                                  
      Total cost of revenue                          99,797      67.3       229,041       66.9        489,475       70.2
                                                  ---------     -----     ---------      -----      ---------      -----

Gross profit                                         48,533      32.7       113,217       33.1        207,303       29.8
                                                                                                  
Selling, general and administrative expenses         30,442      20.5        71,270       20.8        153,568       22.0
Restructuring charge                                     --        --            --         --          6,953        1.0 
Non-cash compensation expense                         1,072       0.7            --         --             --         --
Depreciation and amortization                         3,142       2.1         8,905        2.6         21,586        3.1
                                                  ---------     -----     ---------      -----      ---------      -----
                                                                                                  
      Total operating expenses                       34,656      23.4        80,175       23.4        182,107       26.1
                                                                                                  
Equity in income of affiliated company                   --        --            --         --            688         --
                                                  ---------     -----     ---------      -----      ---------      -----
Operating income                                     13,877       9.4        33,042        9.6         25,884        3.7
Interest expense with related parties                 1,199       0.8            --         --             --         --
Interest expense, other                                 387       0.3         2,429        0.7         24,325        3.5
                                                  ---------     -----     ---------      -----      ---------      -----
                                                                                                  
Income before taxes and extraordinary charge         12,291       8.3        30,613        8.9          1,559        0.2
Provision for taxes                                   4,302       2.9        12,551        3.7            624        0.1
                                                  ---------     -----     ---------      -----      ---------      -----
                                                                                                  
Income before extraordinary charge                    7,989       5.4        18,062        5.2            935        0.1
Extraordinary charge on early extinguishment of                                                   
debt (net of income taxes of $403)                       --        --            --         --            605        0.1
                                                  ---------     -----     ---------      -----      ---------      -----
Net income                                        $   7,989       5.4%    $  18,062        5.2%     $     330         --%
                                                  =========     =====     =========      =====      =========      =====
</TABLE>

Fiscal 1998 Compared to Fiscal 1997

Revenue. Revenue increased $354.5 million, or 103.6%, from $342.3 million in
fiscal 1997 to $696.8 million in fiscal 1998. Approximately 79.9% of the
increase represented revenue (before intercompany eliminations) from the
Company's audiovisual services division,  primarily as a result of the Company's
acquisition of Visual Action Holdings plc ("Visual Action") effective December
1, 1997. Increases in the Communications division's service revenue (before 
intercompany eliminations) accounted for the remaining 20.1% of the total
revenue growth, primarily from clients in the financial services, government,
insurance and information technology industries. Decreases in service revenue
from the automotive industry were offset by increases in revenue from clients in
the pharmaceuticals and food service industries. 
 
Gross Profit. Total gross profit increased $94.1 million, or 83.1%, from $113.2
million in fiscal 1997 to $207.3 million in fiscal 1998, as a result of the
revenue growth described above. As a percentage of the Communications division's
service revenue, gross profit (before intercompany eliminations) was 32.0% and
31.0% in fiscal 1997 and fiscal 1998, respectively. Gross profit (before 
intercompany eliminations) as a percentage of rental revenue was 34.1% and 27.8%
in fiscal 1997 and fiscal 1998, respectively. The decrease in the gross margin
on rental revenue resulted primarily from the impact of acquired rental
businesses, which had historically operated at lower gross margins, and
investments made to strengthen the infrastructure of the Company's rental
businesses to enable them to handle future revenue growth. Gross profit on
rental revenue for the years ended September 30, 1997 and 1998 was impacted by
$4.2 million and $16.2 million, respectively, of depreciation expense related to
rental equipment used in the audiovisual services businesses. Such depreciation
expense is included in cost of rental revenue.

                                       11
<PAGE>

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $82.3 million, or 115.5%, from $71.3 million
in fiscal 1997 to $153.6 million in fiscal 1998, resulting primarily from the
expansion of the Company as a result of its various acquisitions. Salaries and
related costs increased $49.6 million as a result of increased personnel to
support the overall growth of the Company and normal inflationary increases.
Other general and administrative expenses such as rent and related costs,
telephone, office supplies and equipment, as well as insurance and other
miscellaneous costs increased $25.6 million. Direct selling expenses such as
travel, marketing, postage and other costs related to obtaining business
increased $7.1 million. Selling, general and administrative expenses, as a
percentage of total revenue, were 20.8% and 22.0% in fiscal 1997 and 1998,
respectively.

Restructuring Charge. In fiscal 1998, the Company initiated a review of all of
its operations, primarily focusing on the integration of the audiovisual
services businesses that it has acquired, as well as the Company's overall
management organizational structure. In connection with this review, the Company
adopted a reorganization plan to streamline its organizational structure and
evaluate its overall operational efficiency.

Accordingly, during the three months ended March 31, 1998, the Company recorded
a pre-tax restructuring charge of $3.8 million. The charge included $2.8 million
related to employee termination and severance costs associated with a reduction
in the workforce of approximately 155 people and $1.0 million related to lease
termination and other related costs. During the three months ended September 30,
1998, the Company recorded an additional pre-tax restructuring charge of $3.2
million in connection with the continuation of the reorganization plan begun in
March 1998. The charge included $1.0 million related to severance and
termination costs for approximately 330 people, $0.7 million of lease
termination costs, $1.0 million relating to the write-off of certain assets and
$0.5 million of other termination and shut down costs to be incurred during the
reorganization.

The total remaining restructuring liability as of September 30, 1998 was $4.1
million.

In addition, the Company expects to incur up to $8.5 million in transition costs
during fiscal 1999 in connection with the Company's continued implementation of
its overall strategic plans. Such transition costs primarily consist of
duplicate costs currently existing within the Company's audiovisual businesses,
such as rent on facilities, certain administrative costs and consulting services
associated with implementing such plans.


Depreciation and amortization. Depreciation and amortization increased to $21.6
million in fiscal 1998, an increase of $12.7 million as compared to $8.9 million
in fiscal 1997. Property and equipment acquired through acquisitions and
increased capital expenditures for computer and other technology equipment
resulted in increased depreciation of $3.5 million. Amortization expense
increased $9.2 million resulting primarily from goodwill arising from
acquisitions.

Equity in Income of Visual Action. In November, 1997, the Company acquired a
minority interest in Visual Action through open market purchases resulting in
the equity in income reflected for the period. The Company began consolidating
the financial results of Visual Action as of December 1, 1997.

Interest expense, net. Net interest expense increased by $21.9 million from $2.4
million in fiscal 1997 to $24.3 million in fiscal 1998 due to higher borrowings
to finance acquisitions, operational expansion, capital expenditures and
increased working capital requirements.

Income before taxes. Income before taxes decreased from $30.6 million in fiscal
1997 to $1.6 million in fiscal 1998 due to (i) a decrease in operating income of
approximately $7.1 million due to the factors described above and (ii) increased
net interest expense of $21.9 million as a result of financing the Company's
acquisitions.

Provision for taxes. The provision for taxes as a percentage of income before
taxes was 41% and 40% in fiscal 1997 and 1998, respectively, which reflects
statutory tax rates adjusted for book/tax differences such as non-deductible
expenses.

Extraordinary Charge on Early Extinguishment of Debt. In connection with the
acquisition of Visual Action, the Company entered into a new credit facility in
October, 1997. As a result, during the three months ended December 31, 1997, the
Company wrote-off approximately $0.6 million (net of taxes of $0.4 million) of
the remaining unamortized debt issuance costs related to its former bank
facilities that were repaid from the proceeds of such new credit facility.

                                       12
<PAGE>

Net income. Net income for fiscal 1998 decreased $17.8 million to $0.3 million
from net income of $18.1 million in fiscal 1997 due to the factors described
above. Basic and diluted earnings per common share after the aggregate pre-tax
restructuring charge of $7.0 million and the extraordinary charge on early
extinguishment of debt was $0.01 for fiscal 1998 as compared with $0.83 for
fiscal 1997. Basic and diluted earnings per common share before the
restructuring charge and the extraordinary charge on early extinguishment of
debt would have been $0.22 for fiscal 1998.

Fiscal 1997 Compared to Fiscal 1996

Revenue. Revenue increased $194.0 million, or 130.7%, from $148.3 million in
fiscal 1996 to $342.3 million in fiscal 1997. The increase resulted primarily
from expanded activities from existing clients, projects for new clients and the
acquisition of other business communications services and audio-visual and
rental, sales and companies. Approximately 67% of the increase represented
revenue from the rental of audiovisual equipment through the Company's
Audio Visual Services division, which includes the results from the respective
dates of acquisition of the following audio-visual companies acquired in fiscal
1997: Video Supply Company, Inc. d/b/a Projexions Video Supply and
Projections/Video Supply Company (together "Projexions") (acquired in January,
1997), Blumberg Communications, Inc. ("Blumberg") (acquired in January, 1997),
D&D Enterprises, Inc. d/b/a Show Solutions ("Show Solutions") (acquired in
April, 1997) and Bauer Audiovisual, Inc. (acquired in July, 1997). Increases in
service revenue accounted for the remaining 33% of the total revenue growth due
primarily from clients in the automotive, consumer products, telecommunications,
information technologies and government industries. Service revenue from clients
in the financial services industry decreased primarily as a result of a
triennial sales meeting held by a financial services client in fiscal 1996.

Gross profit. Total gross profit increased $64.7 million, or 133.3%, from $48.5
million in fiscal 1996 to $113.2 million in fiscal 1997, primarily as a result
of the revenue growth described above. As a percentage of service revenue, gross
profit was 32.0% in each of fiscal 1996 and 1997. Gross profit as a percentage
of rental revenue was 34.1%. Gross profit on rental revenue for fiscal 1997 was
impacted by $4.2 million of depreciation expense related to rental equipment
used in the audiovisual services businesses. Such depreciation expense is
included in cost of rental revenue.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $40.9 million, or 134%, from $30.4 million in
fiscal 1996 to $71.3 million in fiscal 1997. The increase resulted primarily
from the expansion of operations both organically and through acquisitions, as
well as from normal inflationary increases. Salaries and related costs increased
$23.8 million to support the Company's overall significant growth, as well as
increased personnel resulting from acquisitions. Other general and
administrative expenses, including rent and related costs, telephone, office
supplies, as well as insurance costs, and other miscellaneous expenses,
increased $12.9 million to support the significant revenue and acquisition
growth. Direct selling expenses such as travel, marketing and other costs
related to obtaining business increased $4.2 million. Selling, general and
administrative expenses, as a percentage of total revenue, were comparable in
both periods. The $1.1 million nonrecurring, non-cash compensation charge during
fiscal 1996 was the result of the vesting of common stock sold pursuant to the
Company's 1993 Management Stock Plan at a price lower than its fair market
value.

Depreciation and amortization. Depreciation and amortization expense increased
to $8.9 million in fiscal 1997, an increase of $5.8 million as compared to $3.1
million in fiscal 1996. The continued investment in information technology, as
well as property and equipment acquired through acquisitions, resulted in
increased depreciation expense of $2.5 million. Amortization expense increased
$3.3 million resulting primarily from goodwill arising from acquisitions.

Interest expense. Net interest expense increased by $2.0 million from fiscal
1996 to fiscal 1997 primarily due to higher average borrowings to finance
acquisitions, operational expansion, capital expenditures and increased working
capital requirements. Interest expense with related parties decreased $1.2
million from fiscal 1996 due to the repayment and conversion of debt on March
15, 1996 in connection with the Company's initial public offering.

Income before taxes. Income before taxes increased from $12.3 million in fiscal
1996 to $30.6 million in fiscal 1997 as increased revenue from existing and new
accounts and acquired businesses contributed to the improved earnings of the
Company.

Provision for taxes. The provision for taxes as a percentage of income before
taxes was 35% and 41% for fiscal 1996 and fiscal 1997, respectively. The
increase in the effective tax rate is due to the fact that a portion of income
before tax in fiscal 1996 was offset by net operating loss carryforwards.

Net income. Net income increased to $18.1 million in fiscal 1997 from $8.0
million in fiscal 1996. Earnings per common share increased in fiscal 1997 to
$0.83 from $0.53 in fiscal 1996. Earnings per share in fiscal 1996 was

                                       13
<PAGE>
computed on a pro forma basis assuming conversion of the convertible promissory
note and all outstanding shares of preferred stock into common stock (which, in
each case, occurred on March 15, 1996 immediately prior to the consummation of
the Company's initial public offering) as if such conversions occurred on
October 1, 1995. The pro forma earnings per share computation reflects
adjustments to eliminate the interest expense incurred on the convertible
promissory note and to eliminate accrued preferred stock dividends. Excluding
the effect of the nonrecurring non-cash compensation charge of $1.1 million, net
income per common share would have been $0.59 for fiscal 1996.

Liquidity and Capital Resources

The following table sets forth certain information from the Company's
Consolidated Statement of Cash Flows for periods indicated:

<TABLE>
<CAPTION>
                                                                               Year Ended September 30,
                                                        ------------------------------------------------------------------------
                                                                 1996                    1997                  1998
                                                                 ----                    ----                  -----
<S>                                                       <C>                     <C>                      <C>
Net cash provided by (used in):
      Operating activities                                $     7,260             $     7,884              $  22,990
      Investing activities                                    (46,204)               (128,522)              (302,973)
      Financing activities                                     47,077                 122,113                285,499
</TABLE>

In fiscal 1996, the Company generated $7.3 million from its operating
activities. Net income plus depreciation and amortization and the nonrecurring
non-cash compensation charge described above provided $12.2 million. The net
change in working capital used $4.9 million, with increases in accounts
receivable, prepaid expenses and other current assets as well as a decrease in
accrued interest payable, offset by a net increase in accrued expenses and
accounts payable. Investing activities required $46.2 million, resulting
primarily from the acquisition of businesses and the purchase of equipment.
Financing activities provided approximately $47.1 million, of which an aggregate
of $44.4 million of net proceeds were received in fiscal 1996 from the issuance
of the Company's common stock and the exercise of warrants to purchase the
Company's common stock, $19.8 million was provided by the Company's
then-existing bank facilities. Such amounts were offset by $16.9 million used to
repay certain outstanding bank borrowings and substantially all other long-term
indebtedness, and to pay accrued preferred stock dividends. In addition, $0.2
million was used to repurchase the Company's common stock in fiscal 1996.

In fiscal 1997, the Company generated $7.9 million from its operating
activities. Net income plus depreciation and amortization provided $31.1
million. The net change in working capital used $23.3 million, with increases in
accounts receivable, prepaid expenses and other assets as well as decreases in
deferred income, offset by increases in accrued expenses and other liabilities
and a decrease in deferred charges. A total of $128.5 million was used for
investing activities, primarily for the acquisition of businesses and the
purchase of equipment. Financing activities provided $122.1 million, of which
$135.9 million was provided by the Company's existing banking facilities, and
$85.8 million of net proceeds were received in fiscal 1997 from the issuance of
common stock. In addition, $98.5 million was used to repay outstanding bank
borrowings during the period, and $1.0 million was used to pay financing fees in
connection with the loan agreement described below.

In fiscal 1998, the Company generated $23.0 million from its operating
activities. Net income adjusted for depreciation and amortization and the
extraordinary and restructuring charges provided $42.9 million. The net change
in working capital used $19.9 million, with an increase in deferred income, and
a decrease in accrued expenses and other liabilities and prepaid expenses and
other current assets, which were more than offset by an increase in accounts
receivable and other assets and a decrease in taxes payable and accounts
payable. Investing activities used $303.0 million due to acquisition-related
expenditures and fixed asset purchases, primarily audiovisual and computer
equipment, as well as information technology enhancements. Aggregate net
proceeds of $48.9 million related to the disposition of the Company's U.K.-based
broadcast video and audiovisual staging divisions offset the expenditures
described above. Financing activities provided $285.5 million, of which $759.1
million was provided by drawings under the Company's bank facilities, offset by
repayments of $470.5 million. In addition, the Company received $0.7 million
from the exercise of employee stock options.

On December 4, 1996, the Company entered into a loan agreement with a syndicate
of banks pursuant to which the Company increased its aggregate available bank
financing from $27 million in fiscal 1996 to $100 million in fiscal 1997,
consisting of a $75 million six year reducing revolving credit facility (the
"Reducing Revolver") to be utilized in connection with the financing of
acquisitions and a $25 million six year revolving line of credit (the "Revolving
Line" and together with the Reducing Revolver, the "1996 Facilities"). Amounts
outstanding under the Company's former bank facilities were repaid with proceeds
from the 1996 Facilities. Interest on outstanding amounts under the 1996
Facilities was payable quarterly in arrears and, at the option of the Company,
interest accrued at either (i) LIBOR plus an applicable margin or (ii) an
alternate base rate based on the greatest of (a) the agent bank's prime rate,
(b) the three month secondary certificate of deposit rate and (c) the federal
funds rate. Pursuant to the terms of the 1996 Facilities, the Company was
required to reduce outstanding amounts under the Revolving Line to less than
$5.0 million for a period of not less than 30 days during every 12-month period
commencing on December 4, 1996.

On October 28, 1997, the Company entered into a new loan agreement with a
syndicate of banks pursuant to which the Company increased its aggregate
available bank financing from $100 million to $550 million, consisting of a $300
million six year revolving line of credit (the "Revolving Facility") to be
utilized in connection with future acquisitions and for working capital and
general corporate purposes and a $250 million six year term loan (the "Term
Facility" and together with the Revolving Facility, the "1997 Facilities") to be
utilized in connection with the acquisition of Visual Action Holdings plc.
Amounts outstanding under the 1996 Facilities were

                                       14
<PAGE>

repaid with the proceeds from the 1997 Facilities. Approximately $4.8 million in
debt issuance fees were incurred in connection with the 1997 Facilities. Such
fees are being amortized over the term of the 1997 Facilities, which is
approximately six years.

In May, 1998, the Company repaid approximately $26 million under the Term
Facility thereby permanently reducing availability thereunder by such amount. In
December, 1998, the terms of the Revolving Facility were amended to reduce the
aggregate availability thereunder from $300 million to $250 million, to amend
certain financial covenants contained therein and to increase the interest rate
on amounts outstanding under the 1997 Facilities. Fees of approximately $1.2
million were incurred in connection with the amendments made to the 1997
Facilities in December, 1998. Such fees will be amortized over the remaining
term of the 1997 Facilities. As of December 18, 1998, the Company had
approximately $412.9 million outstanding under the 1997 Facilities. Cash on hand
as of such date was $12.9 million.

The maturity date of each of the Term Facility and the Revolving Facility is
September 30, 2003. Interest on outstanding amounts under the 1997 Facilities is
payable quarterly in arrears and at the option of the Company accrues at either
(i) LIBOR plus an applicable margin or (ii) an alternate base rate based upon
the greatest of (a) the agent bank's prime rate, (b) the three-month secondary
certificate of deposit rate and (c) the federal funds rate. The interest rate on
the 1997 Facilities is presently LIBOR plus 2.75%.

Principal on the Term Facility is payable in quarterly installments beginning on
December 31, 1998 with the final scheduled payment due on September 30, 2003.
Subject to reductions in such quarterly installments for prepayments made under
the Term Facility, at present, the Company will be required to repay an
aggregate of: (i) $22.4 million in fiscal 1999, (ii) $33.6 million in fiscal
2000, (iii) $44.8 million in fiscal 2001, (iv) $56 million in fiscal 2002 and
(v) $67.8 million in fiscal 2003. The Company is permitted and intends to draw 
on the Revolving Facility to make such payments.

The 1997 Facilities are secured by substantially all of the assets of the
Company and its subsidiaries, and the Company and its subsidiaries have pledged
the stock of their respective subsidiaries for the ratable benefit of its
lending banks. The 1997 Facilities contain certain financial and other covenants
and restrictions, including without limitation restrictions on the ability of
the Company to pay dividends.

Capital expenditures were $2.2 million in fiscal 1996, $17.7 million in fiscal
1997 and $46.5 million in fiscal 1998. During fiscal 1995 and 1996, the purchase
of additional personal computers and expanded capabilities for the computer
system accounted for the largest areas of expenditure. During fiscal 1997 and
fiscal 1998, the purchase of audio-visual rental equipment and the  continued
investment in information technology comprised the major  portion of capital
expenditures.

In December, 1998, the Company announced that it intends to dispose of certain
non-core assets. The Company expects the net proceeds from any such sales to be
approximately $70 million to $100 million, which it will use to repay bank debt.

Quarterly Results

The following table sets forth the unaudited quarterly results of operations for
each of the quarters in the two years ended September 30, 1997 and 1998. In
management's opinion, this unaudited quarterly information includes all
adjustments which are necessary for a fair presentation of the information for
the quarters presented. The operating results in any quarter are not necessarily
indicative of the results which may be expected for any other future period.

<TABLE>
<CAPTION>
                                             Fiscal 1997                                        Fiscal 1998
                              -------------------------------------------     ----------------------------------------------
                                1st         2nd          3rd        4th         1st           2nd         3rd          4th
                              Quarter     Quarter      Quarter    Quarter     Quarter       Quarter     Quarter      Quarter
                              -------     -------      -------    -------     -------       -------     -------      -------
                                                                      (In thousands)
<S>                           <C>         <C>          <C>        <C>         <C>           <C>         <C>          <C>
Revenue                         $52,659     $77,435    $103,577     $108,587    $122,449    $187,378     $202,898    $184,053
Gross profit                     17,711      25,174      34,790       35,542      37,440      61,459       62,161      46,243
Operating income (loss)           1,771       6,902      13,669       10,700       3,135      13,256       16,802      (7,309)
Net income (loss)                   736       3,721       8,013        5,592        (477)      3,765        5,836      (8,794)
</TABLE>

Billings and Collections

Customers are normally billed on a per-project or per-rental basis. Generally,
the Company produces projects on a fixed-price basis. The components of the
fixed price are labor, both internal and external, outside purchases and
equipment utilization. The Company also produces projects priced on a
"cost-plus" basis, whereby the Company bills its employees' services to the
client at hourly or per diem rates, depending upon the employee, and then
charges for actual outside purchases plus an agreed upon mark-up. Like fixed
pricing, however, cost-plus pricing has a ceiling that cannot be exceeded
without written permission of the client. For both fixed-price and cost-plus
projects, the Company

                                       15
<PAGE>

has a project change notice system to authorize all production/price changes.
Generally, billing terms are one-third due upon contract signing, one-third due
during production and the remainder due upon delivery and completion of the
project. In the case of the Company's AV Operations, customers are billed upon
completion of the staging service or rental. The Company provides audiovisual
equipment rentals to customers based on published price lists. Billings prior to
delivery date are carried as deferred income in the Company's financial
statements and costs incurred prior to the delivery date are carried as deferred
charges. The Company has not had any material collection problems in connection
with its business. In the event a client cancels a project after production work
has begun, the client is billed for work performed and expenses incurred through
the date of cancellation.

New Accounting Pronouncements

In June 1997, the Financial Accounting Standards Boards issued SFAS No. 131,
Financial Reporting for Segments of a Business Enterprise ("Statement 131"),
which applies to all public business enterprises. Statement 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. Statement 131 is effective for
financial statements for periods beginning after December 15, 1997. Management
is in the process of determining the effect of Statement 131 on its financial
statement disclosures.

Year 2000 Compliance

The Year 2000 Issue is the result of computer software and hardware, as well as
chips and processors embedded in various products ("Computer Applications"),
using two digits rather than four digits to define the applicable year.
Consequently, these Computer Applications may not be able to properly recognize
dates beginning with the year 2000 which could result in miscalculations or
system failures.

The Company's Computer Applications consist of both internal systems and systems
provided by third parties. The Company is in the process of examining and
testing its Computer Applications. Based on internal assessments completed to
date and upon third party representations, the Company believes that its
exposure to Year 2000 problems is not significant.

The Company has identified non-compliant systems in certain business units.
However, notwithstanding the Year 2000 Issue, the Company had planned to replace
those systems. The Company plans to achieve Year 2000 compliance across all
business lines by September 30, 1999 and is in the process of developing a
contingency plan in the event that it is not able to convert the non-compliant
systems in a timely manner. Such plan includes processing the affected
businesses temporarily on other existing Year 2000 compliant systems.

Although the Company believes that it will be able to resolve the Year 2000
Issue, there can be no assurance that the Company will identify all susceptible
systems or that systems provided by third parties will be Year 2000 compliant or
that any resulting Year 2000 Issues would not have an adverse effect on the
results of operations of the Company.

The Company has not incurred any significant costs to date that are specifically
attributable to resolving the Year 2000 issue and does not estimate the future
costs related to the resolution of this matter to be material.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company has operations in various foreign countries. In the normal course of
business, these operations are exposed to fluctuations in currency values.
Management does not consider the impact of currency fluctuations to represent a
significant risk. The Company's interest expense is sensitive to changes in the
general level of U.S. interest rates. In this

                                       16
<PAGE>

regard, changes in the U.S. rates affect the interest paid on a portion of its
debt. The Company does not generally enter into derivative financial instruments
in the normal course of business, nor are such instruments used for speculative
purposes.

                                       17
<PAGE>

Item 8.  Financial Statements and Supplementary Data

                         REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors
Caribiner International, Inc.

We have audited the accompanying consolidated balance sheets of Caribiner
International, Inc. (the "Company") as of September 30, 1997 and 1998, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the three years in the period ended September 30,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company at
September 30, 1997 and 1998 and the consolidated results of its operations and
its cash flows for each of the three years in the period ended September 30,
1998, in conformity with generally accepted accounting principles.


                              /s/ ERNST & YOUNG LLP




New York, New York
December 18, 1998




                                       18
<PAGE>

                                           CARIBINER INTERNATIONAL, INC.
                                            CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                                         September 30,
                                                                                               ----------------------------------
                                                                                                   1997             1998
                                                                                                   ----             ----
                                                                                                    (amounts in thousands)
<S>                                                                                            <C>              <C>
                                       ASSETS
Current Assets:
    Cash and cash equivalents                                                                  $   10,253       $   15,117
    Trade accounts receivable, net of allowance for doubtful accounts of $740 in                   
        1997 and $2,150 in 1998                                                                    77,780          124,936
    Deferred charges                                                                               10,229           12,923
    Prepaid expenses and other current assets                                                       9,128           11,610
                                                                                               ----------       ----------


         Total Current Assets                                                                     107,390          164,586

    Property and equipment, net                                                                    45,714           98,070
    Goodwill, net                                                                                 157,154          419,581
    Taxes receivable                                                                                   --            4,479
    Deferred tax asset                                                                                 --              362
    Other assets                                                                                    3,619           10,871
                                                                                               ----------       ----------


         Total Assets                                                                          $  313,877       $  697,949
                                                                                               ==========       ==========



                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Current portion of long-term debt                                                          $    1,217       $    1,000
    Trade accounts payable                                                                         18,816           23,739
    Accrued expenses and other current liabilities                                                 23,200           39,449
    Accrued production costs                                                                       11,055           25,331
    Taxes payable                                                                                   4,726               --
    Deferred income                                                                                12,225           18,093
                                                                                               ----------       ----------


         Total Current Liabilities                                                                 71,239          107,612

    Long-term debt                                                                                 60,642          396,240
    Deferred income                                                                                 5,617            8,409
    Deferred tax liability                                                                            715               --
    Other liabilities                                                                               4,230            9,913
                                                                                               ----------       ----------


         Total Liabilities                                                                        142,443          522,174

    Stockholders' Equity:
    Preferred stock, $.01 par value:
    2,000 shares authorized, none issued and outstanding at 1997 and 1998                              --               --
    Common stock, $.01 par value:
    40,000 voting shares authorized, and 23,417 and 23,689 shares issued and                          
        outstanding at 1997 and 1998, respectively                                                    234              236
    Additional paid-in capital                                                                    159,874          167,608
    Translation adjustment                                                                             11           (3,714)
    Retained earnings                                                                              11,315           11,645
                                                                                               ----------       ----------


         Total Stockholders' Equity                                                               171,434          175,775
                                                                                               ----------       ----------

    Total Liabilities and Stockholders' Equity                                                 $  313,877       $  697,949
                                                                                               ==========       ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       19
<PAGE>

                          CARIBINER INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                       Year ended September 30,
                                                                             ----------------------------------------------
                                                                                        (amounts in thousands)
                                                                                 1996           1997            1998
                                                                                 ----           ----            ----
<S>                                                                          <C>            <C>             <C>
Service revenue                                                              $  148,330     $  213,239      $  296,393
Rental revenue                                                                       --        131,843         414,941
Intercompany eliminations                                                            --         (2,824)        (14,556)
                                                                             ----------     ----------      ----------

         Total revenue                                                          148,330        342,258         696,778
                                                                             ----------     ----------      ----------

Cost of service revenue                                                          99,797        144,980         204,511
Cost of rental revenue                                                               --         86,885         299,520
Intercompany eliminations                                                            --         (2,824)        (14,556)
                                                                             ----------     ----------      ----------

         Total cost of revenue                                                   99,797        229,041         489,475
                                                                             ----------     ----------      ----------

Gross profit                                                                     48,533        113,217         207,303

Operating expenses:
    Selling, general and administrative expenses                                 30,442         71,270         153,568
    Restructuring charge (note 3)                                                    --             --           6,953
    Non-cash compensation expense (note 7)                                        1,072             --              --
    Depreciation and amortization                                                 3,142          8,905          21,586
                                                                             ----------     ----------      ----------

         Total operating expenses                                                34,656         80,175         182,107

Equity in income of affiliated company (note  4)                                     --             --             688
                                                                             ----------     ----------      ----------
Operating income                                                                 13,877         33,042          25,884

Interest expense with related parties                                             1,199             --              --
Other interest expense, net                                                         387          2,429          24,325
                                                                             ----------     ----------      ----------

Income before taxes and extraordinary charge                                     12,291         30,613           1,559
Provision for taxes                                                               4,302         12,551             624
                                                                             ----------     ----------      ----------

Income before extraordinary charge                                                7,989         18,062             935

Extraordinary charge on early extinguishment of debt (net of income taxes    
of $403) (note 6)                                                                    --             --             605
                                                                             ----------     ----------      ----------
Net income                                                                   $    7,989     $   18,062      $      330
                                                                             ==========     ==========      ==========
Basic and diluted earnings per common share:
    Income before extraordinary charge                                       $     0.53     $     0.83      $     0.04
    Extraordinary charge                                                             --             --           (0.03)
                                                                             ----------     ----------      ----------
Net income per common share                                                  $     0.53     $     0.83      $     0.01
                                                                             ==========     ==========      ==========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                       20
<PAGE>

                          CARIBINER INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                        Year ended September 30,
                                                                              ----------------------------------------------
                                                                                 1996             1997             1998
                                                                                 ----             ----             ----
                                                                                         (amounts in thousands)

<S>                                                                           <C>              <C>             <C>
Cash flows from operating activities:
    Net income                                                                $    7,989       $   18,062      $      330
    Adjustments to reconcile net income to net cash provided by operating
        activities:
    Restructuring charge, net of cash payments                                        --               --           4,125
    Non-cash compensation expense                                                  1,072               --              --
    Extraordinary charge on early extinguishment of debt, net of tax                  --               --             605
    Depreciation and amortization                                                  3,142           13,082          37,801
    Change in assets and liabilities, net of amounts acquired:
        (Increase) in accounts receivable                                         (4,520)         (19,547)        (11,158)
        (Increase) decrease in deferred charges                                     (770)           1,469          (1,880)
        (Increase) decrease in prepaid expenses and other
         current assets                                                              (974)          (3,714)          1,280
        Decrease (increase) in other assets                                          443           (1,646)         (3,866)
        (Decrease) in accounts payable                                            (1,650)            (450)         (3,851)
        Increase (decrease) in deferred income                                       (63)          (5,165)          6,428
        Increase (decrease) in accrued expenses and other liabilities              2,591            5,793          (6,824)
                                                                              ----------       ----------      ----------


        Net cash provided by operating activities                                  7,260            7,884          22,990
                                                                              ----------       ----------      ----------


Cash flow provided by (used in) investing activities:
    Purchase of property and equipment                                            (2,222)         (17,725)        (46,454)
    Net proceeds from disposition of businesses                                       --               --          48,892
    Acquisition of intangibles and businesses, net of cash acquired              (43,982)        (110,797)       (305,411)
                                                                              ----------       ----------      ----------

    Net cash used in investing activities                                        (46,204)        (128,522)       (302,973)

Cash flow provided by (used in) financing activities:
    Net proceeds from issuance of common stock                                    42,480           85,792              --
    Proceeds from exercise of warrants                                             1,691               --              --
    Proceeds from exercise of stock options                                           --               --             667
    Net proceeds from (repayments of) bank line of credit                          1,780           (6,000)             --
    Proceeds from long-term debt                                                  18,000          135,870         759,122
    Repayments of long-term debt                                                 (14,669)         (92,517)       (470,478)
    Deferred financing fees                                                           --           (1,032)         (3,812)
    Payment of preferred dividends                                                (2,202)              --              --
    Proceeds from issuance of common stock under the 1993 Management Stock           
        Plan                                                                         174               --              --
    Repurchase of common stock                                                      (177)              --              --
                                                                              ----------       ----------      ----------

    Net cash provided by financing activities                                     47,077          122,113         285,499
                                                                              ----------       ----------      ----------

Effect of exchange rate changes on cash and cash equivalents                          86              346            (652)
                                                                              ----------       ----------      ----------

Net increase in cash and cash equivalents                                          8,219            1,821           4,864
Cash and cash equivalents beginning of year                                          213            8,432          10,253
                                                                              ----------       ----------      ----------

Cash and cash equivalents end of year                                         $    8,432       $   10,253      $   15,117
                                                                              ==========       ==========      ==========
</TABLE>

See accompanying notes to the consolidated financial statements.


                                       21
<PAGE>

                          CARIBINER INTERNATIONAL, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                  for the Three Years Ended September 30, 1998
                             (amounts in thousands)
<TABLE>
<CAPTION>

                                                                                                                           Total
                                                                                                                           Stock-
                                                   Common Stock      Preferred Stock  Additional  Retained                holders'
                                                  ---------------    ---------------   Paid-in    Earnings   Translation   Equity
                                                  Shares   Amount    Shares   Amount   Capital    (Deficit)  Adjustment   (Deficit)
                                                  ------   ------    ------   ------   -------    ---------  -----------  ---------
<S>                                               <C>      <C>       <C>      <C>     <C>        <C>         <C>          <C>
Balance at October 1, 1995                         5,003    $ 50       450    $  5    $  1,921   $(14,409)       --       $(12,433)
Issuance of common stock under the 1993            
    Management Stock Plan                            174       2        --      --         172         --        --            174
Issuance of warrants to purchase 151 shares of        
    common stock                                      --      --        --      --          79         --        --             79
Repurchase of common stock                           (62)      *        --      --        (177)        --        --           (177)
Accrued preferred stock dividends                     --      --        --      --          --       (327)       --           (328)
Conversion of Convertible Note into preferred         
    stock                                             --      --       600       6      11,979         --        --         11,985
Conversion of preferred stock into common stock    7,193      72    (1,050)    (11)        (46)        --        --             15
Exercise of warrants                               1,069      11        --      --       1,680         --        --          1,691
Issuance of common stock upon consummation of      
    initial public offering                        5,756      57        --      --      42,257         --        --         42,315
Issuance of common stock upon acquisition of          
    Lighthouse, Ltd.                                  64       *        --      --       1,000         --        --          1,000
Non-cash compensation charge                          --      --        --      --       1,072         --        --          1,072
Translation adjustment                                --      --        --      --          --         --        86             86
Net income                                            --      --        --      --          --      7,989        --          7,989
                                                  ------    ----    ------    ----    --------   --------   -------       --------
                                                                                                                        
Balance at September 30, 1996                     19,197     192        --      --      59,937     (6,747)       86         53,468
Issuance of common stock under non-employee            
    directors' stock plan                              2      --        --      --          37         --        --             37
Issuance of common stock upon offering             3,744      37        --      --      85,754         --        --         85,791
Issuance of common stock upon acquisitions           
    completed during fiscal 1997                     474       5        --      --      14,146         --        --         14,151
Translation adjustment                                --      --        --      --          --         --       (75)           (75)
Net income                                            --      --        --      --          --     18,062        --         18,062
                                                  ------    ----    ------    ----    --------   --------   -------       --------
                                                                                                                        
Balance at September 30, 1997                     23,417     234        --      --     159,874     11,315        11        171,434
Issuance of common stock upon acquisitions           
    completed during fiscal 1998                     239       2        --      --       7,042         --        --          7,044
Issuance of common stock upon exercise of             
    stock options                                     33       *        --      --         692         --        --            692
Translation adjustment                                --      --        --      --          --         --    (3,725)        (3,725)
Net income                                            --      --        --      --          --        330        --            330
                                                  ------    ----    ------    ----    --------   --------   -------       --------
                                                                                                                        
Balance at September 30, 1998                     23,689    $236        --    $ --    $167,608   $ 11,645   $(3,714)      $175,775
                                                  ======    ====    ======    ====    ========   ========   =======       ========
</TABLE>

*Less than $1 thousand



         See accompanying notes to the consolidated financial statements.


                                       22
<PAGE>

                          CARIBINER INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  The Company

Caribiner International, Inc. (the "Company") is a producer of meetings, events
and training programs, a provider of audiovisual equipment rentals, sales and
installations and related staging services, and a provider of related business
communications and corporate meeting services that enable businesses to inform,
sell to and train their sales forces, dealers, franchisees, partners,
stockholders and employees.

The Company was organized on December 1, 1989 by its then parent, Ingleby
Communications Corporation ("ICC") and comprised substantially all of the
operations of ICC. Effective as of June 30, 1992, the Company completed a $16
million private placement (the "Private Placement") with Warburg, Pincus
Investors, L.P. ("Warburg") consisting of an 11.5% Convertible Promissory Note
in the aggregate principal amount of $12 million  (the "Convertible Note") and
$4 million of Cumulative Redeemable Convertible Voting Preferred Stock, par
value $0.01 per share (the "Preferred Stock").

In March 1996, the Company consummated an initial public offering (the "Initial
Public Offering") of its Common Stock, which included the sale by the Company of
5.8 million shares of Common Stock, resulting in net proceeds of $42.3 million,
which were principally used to repay outstanding indebtedness and to fund
acquisitions, working capital needs and for general corporate purposes. 
Immediately prior to the consummation of the Initial Public Offering, the
Convertible Note was converted into 0.6 million shares of Preferred Stock, which
were then immediately converted into 4.1 million shares of the Company's Common
Stock. Upon consummation of the Initial Public Offering, accrued interest of
$6.3 million relating to the Convertible Note was paid to Warburg. Also,
immediately prior to the consummation of the Initial Public Offering, Warburg
converted its shares of the Preferred Stock into 3.1 million shares of the
Company's Common Stock. In addition, Warburg exercised warrants to purchase 1.1
million shares of Common Stock at a weighted average exercise price of $1.58 per
share.

In March, 1997, the Company consummated an offering of 3.7 million shares of its
Common Stock, yielding net proceeds of approximately $85.8 million, of which
approximately $64.5 million were used to repay all of the Company's then
outstanding bank borrowings. The remaining net proceeds were available to make
acquisitions, fund working capital needs and for general corporate purposes.

2.  Summary of Significant Accounting Policies

Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All intercompany balances and transactions have
been eliminated in consolidation.

Certain reclassifications have been made to the 1996 and 1997 financial
statements to conform to the current year presentation.

Revenue Recognition

Service revenue is recorded principally on the completed contract method of
accounting. The recognition of revenue and cost of revenue is deferred until a
project is completed, usually within a three to six month time period. For
those projects which provide for multiple events, the contract revenue and costs
are apportioned and revenue and profit are recognized as each event occurs. If a
client cancels a project after production has begun, the client is billed for
work performed and expenses incurred through the date of cancellation, and there
are no provisions for non-payment by the client. Deferred income, which
represents advance billings on uncompleted jobs, is classified as long-term in
the same proportion that anticipated profit on such jobs bears to the related
contract price. Deferred charges represent costs incurred on uncompleted jobs.

Rental revenue is recognized over the related rental period.

Cost of Revenue

Cost of service revenue is comprised of production costs, including salaries and
benefits of production, creative and technical personnel involved with the
specific contracts, and other direct costs, including contracted services,
equipment rentals and costs associated with the production of audio-visual
effects. Such costs are deferred until project completion.

Cost of rental revenue is comprised principally of direct labor costs,
commissions, depreciation and equipment rentals.

                                       23

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

In connection with certain of the acquisitions described in Note 4, Business
Acquisitions/Dispositions, the Company was contractually required to retain a
portion of the purchase price in segregated bank accounts. Such amounts will be
paid to certain of the sellers in future periods in accordance with the purchase
agreements and subject to any arising purchase price adjustments. At September
30, 1998, the Company held $1.0 million in cash which was restricted for such
purposes.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated on the
straight-line method over the estimated useful lives of the assets ranging from
five to seven years. Leasehold improvements are amortized on the straight-line
method over the shorter of the lease term or the estimated useful life.

Goodwill

Goodwill represents the excess of the cost over the fair value of net assets of
purchased businesses and is amortized on a straight-line basis over periods
ranging from 15 years to 40 years. Accumulated amortization of goodwill was $6.8
million and $20.0 million at September 30, 1997 and 1998, respectively.

The Company reviews the recoverability of intangible and other long-lived assets
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. A loss is recognized for the difference between the
carrying amount and the estimated fair value of the asset.

Deferred Financing Fees

Deferred financing fees are amortized on a straight-line basis over the term of
the related debt. The amortization of deferred financing fees is reflected as a
component of interest expense. Deferred financing fees amortized during the
years ending September 30, 1996, 1997 and 1998 were $0.2 million, $0.3 million
and $0.9 million, respectively.

Foreign Currency Translation

The financial statements of foreign subsidiaries are translated into U.S.
dollars at current rates as of the balance sheet date, except for revenue, costs
and expenses which are translated at average current rates during each reporting
period. The gains or losses resulting from translation are included as a
separate component in stockholders' equity. The gains and losses resulting from
foreign currency transactions are included in the Company's current results of
operations. Transaction gains or losses in the years ended September 30, 1996,
1997 and 1998 were not significant.

Foreign Operations

The Company's foreign operations, principally located in the United Kingdom, had
identifiable assets, including goodwill, of $55.4 million and $99.4 million at 
September 30, 1997 and 1998, respectively. Revenues of $52.8 million and $143.9
million, and operating profits of $1.5 million and $12.1 million, related to the
Company's foreign operations are included in the results of operations for the
years ended September 30, 1997 and 1998, respectively. The Company's foreign
operations during the year ended September 30, 1996 were not significant.

Risks and Uncertainties

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

                                       24

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Based Compensation

The Company grants to certain employees stock options for a fixed number of
shares with an exercise price equal to the fair value of the shares at the date
of grant. The Company accounts for stock option grants in accordance with APB
Opinion 25, "Accounting for Stock Issued to Employees," and, accordingly,
recognizes no compensation expense for such grants.

New Accounting Pronouncements

In June 1997, the Financial Accounting Standards Boards issued SFAS No. 131,
Financial Reporting for Segments of a Business Enterprise, ("Statement 131"),
which applies to all public business enterprises. Statement 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. Statement 131 is effective for
financial statements for periods beginning after December 15, 1997. Management
is in the process of determining the effect of Statement 131 on its financial
statement disclosures.

3.    Restructuring Charge

In fiscal 1998, the Company initiated a review of all of its operations,
primarily focusing on the integration of the audio visual services businesses
that it has acquired, as well as the Company's overall management 
organizational structure. In connection with this review, the Company adopted 
a reorganization plan to streamline its organizational structure and evaluate 
its overall operational efficiency.

Accordingly, during the three months ended March 31, 1998, the Company recorded
a pre-tax restructuring charge of $3.8 million. The charge included $2.8 million
related to employee termination and severance costs associated with a reduction
in the workforce of approximately 155 people and $1.0 million related to lease
termination and other related costs. During the three months ended September 30,
1998, the Company recorded an additional pre-tax restructuring charge of $3.2
million in connection with the continuation of the reorganization plan begun in
March 1998. The charge included $1.0 million related to severance and
termination costs for approximately 330 people, $0.7 million of lease
termination costs, $1.0 million relating to the write-off of certain assets and
$0.5 million of other termination and shut down costs to be incurred during the
reorganization.

The total remaining restructuring liability as of September 30, 1998 was $4.1
million.

4.    Business Acquisitions/Dispositions

During fiscal 1997 and fiscal 1998, the Company purchased several companies
engaged in providing business communication services, as well as providing
audio-visual equipment rentals, sales and related staging services.

Fiscal 1997 Acquisitions

In January, 1997, the Company acquired substantially all of the assets of Video
Supply Company, Inc. d/b/a Projexions Video Supply and Projexions/Video Supply
Company (together, "Projexions"), a provider of audiovisual equipment rentals
and related staging services in the southeastern U.S., for approximately $13.6
million in cash and $1.4 million in the repayment of certain indebtedness at
closing.

Also in January, 1997, the Company completed the acquisition of all of the
outstanding capital stock of Blumberg Communications Inc. ("Blumberg"), a
provider of audiovisual equipment rentals, sales and related staging services,
including hotel audiovisual equipment rentals, sales and related staging
services, including hotel audiovisual outsourcing services in the upper midwest
and southern U.S. The Company paid aggregate consideration of $18.0 million,
which consisted of approximately $16.6 million in cash and the issuance of
59,880 shares of the Company's common stock having a fair market value of
approximately $1.4 million. In addition, the Company repaid $3.9 million in
outstanding indebtedness of Blumberg at closing.

                                       25
<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In April, 1997, the Company completed the acquisition of the assets of D&D
Enterprises, Inc., d/b/a Show Solutions ("Show Solutions"), a provider of
staging and show services based in Atlanta, for aggregate considerate of
approximately $11.4 million, which consisted of $8.4 million in cash paid at
closing, $1.0 million placed in escrow to be paid at a later date upon
satisfaction of certain terms and conditions, and the issuance of 76,360 shares
of the Company's common stock having a fair market value of approximately $2.0
million. In addition, the Company repaid approximately $0.6 million in
outstanding indebtedness of Show Solutions at closing.

In June, 1997, the Company acquired all of the outstanding capital stock of WCT
Live Communication Limited ("WCT"), a London-based business communications
services provider, for aggregate consideration of approximately $12.0 million,
which consisted of $10.1 million in cash and the issuance of 53,818 shares of
the Company's common stock having a fair market value of $1.9 million.

In July, 1997, the Company acquired all of the outstanding capital stock of
Bauer Audiovisual, Inc. ("Bauer"), a provider of audiovisual equipment rentals
and audiovisual outsourcing services throughout the United States. Consideration
paid for the acquisition was $14.6 million in cash and the issuance of 167,762
shares of the Company's common stock with an aggregate fair market value of
approximately $5.3 million. In addition, the Company repaid approximately $7.0
million in outstanding long-term indebtedness of Bauer and $4.8 million in
outstanding short-term indebtedness of Bauer at closing.

In addition, during fiscal 1997, the Company made four additional acquisitions
with an aggregate purchase price of $17.3 million, consisting principally of
cash and shares of the Company's common stock.

All of the transactions described above were financed by additional drawings on
one of the Company's credit facilities, except for the acquisition of Show
Solutions, which was paid from the Company's cash on hand remaining from the net
proceeds of the issuance of Common Stock in March, 1997.

Fiscal 1998 Acquisitions/Dispositions

Effective December 1, 1997, the Company acquired the outstanding capital stock
of Visual Action Holdings plc ("Visual Action") for an aggregate purchase price
of $253.0 million (excluding transaction costs). In addition, the Company
assumed approximately $44.3 million in outstanding indebtedness of Visual
Action. Visual Action provides corporate meeting services, including audiovisual
and exhibition services, in the United States and United Kingdom. The goodwill
resulting from the acquisition of Visual Action is being amortized over 40
years. The cost of the acquisition, including transaction costs, was financed
through the Company's loan agreement entered into in October, 1997 (see Note 6).
Prior to December 1997, the Company had acquired a minority interest through
open market purchases resulting in the equity in income reflected for the
period.

In January, 1998, the Company acquired RightSource, Inc. ("RightSource") for an
initial consideration of $17.0 million in cash, plus the repayment of
approximately $2.4 million in outstanding indebtedness. In addition, Caribiner
may pay additional consideration of up to $2.0 million in cash and common stock.
Right Source, Inc., with offices in South Carolina and Connecticut and training
centers in several other states, is a marketing support and training services
company, focusing primarily on product launches and customer education for the
information technology industry.

In May, 1998, the Company completed the disposition of the broadcast video
services business of Visual Action for approximately $27.6 million in cash,
excluding transaction costs of $2.0 million. In July, 1998, the Company
completed the disposition of the U.K.-based audiovisual staging operations of
Visual Action for approximately $26.7 million in cash. The Company retained the
hotel audiovisual outsourcing services portion of this business, integrating it
with Visual Action's existing U.K. operations. The Company used the cash
proceeds from the sales of the businesses to repay outstanding bank debt. No
gain or loss was recognized on such disposition transactions.
                      
In addition, during fiscal 1998, the Company made seven additional acquisitions
with an aggregate purchase price of $24.7 million, consisting principally of
cash and shares of the Company's common stock.

In December 1998, the Company announced that it intends to dispose of certain
non-core assets. The Company expects the net proceeds from any such sales to be
approximately $70.0 million to $100.0 million, which it will use to repay bank
debt.

                                       26

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The accounting for the above-mentioned acquisitions is in accordance with the
purchase method and, accordingly, operations of the acquired businesses are
included in the accompanying consolidated statements of operations from their
respective dates of acquisition.

Certain of the Company's acquisitions have provided for contingent payments for
three years following the purchase based upon the achievement of certain
performance goals relating to revenue, gross profit or earnings before interest,
taxes, depreciation and amortization. Contingent payments are accounted for as
additional purchase price as they become known. During the years ending
September 30, 1996 and 1997, $1.4 million and $2.1 million was paid and/or
accrued as additional consideration with respect to these acquisitions.

The following unaudited consolidated pro forma results of operations of the
Company for the years ended September 30, 1997 and 1998 give effect to the
acquisitions of Projexions, Blumberg, Show Solutions, WCT, Bauer, Visual Action
and RightSource, as well as the dispositions of Visual Action's broadcast video
services unit and its U.K. staging and equipment rental services unit, and
reflect the extraordinary charge resulting from the write-off of unamortized
fees relating to the Company's former bank facilities (see Note 6), as if such
transactions had occurred in each case on October 1, 1996. The other
acquisitions completed by the Company would not have had or did not have, as the
case may be, a significant effect on the Company's results of operations during
the years ended September 30, 1997 and 1998.

<TABLE>
<CAPTION>
                                                                                   Year ended
                                                                                 September 30,
                                                                              --------------------
                                                                              1997            1998
                                                                              ----            ----
                                                                                 (in thousands,
                                                                             except per share data)
<S>                                                                        <C>             <C>
          Revenue                                                          $655,319        $733,851
          Income before taxes and extraordinary charge                       24,650           1,407
          Net income                                                         14,790              (8)
          Pro forma basic and diluted earnings per common share               $0.63            $0.0
</TABLE>

The above calculation of pro forma basic and diluted net income per common share
assumes that approximately 23,604,855 and 23,616,398 shares were outstanding
during 1997 and 1998, respectively.

The unaudited pro forma consolidated results of operations do not purport to be
indicative of the actual results of operations that would have occurred had the
acquisitions described above been made at the beginning of fiscal 1997 or of
results which may occur in the future.

5.     Property and Equipment

At September 30, 1997 and 1998 property and equipment consisted of:

<TABLE>
<CAPTION>
                                                                                 At September 30,
                                                                              ----------------------
                                                                              1997              1998
                                                                              ----              ----
                                                                                   (in thousands)
<S>                                                                       <C>               <C>
          Audiovisual rental and production equipment                     $   32,644        $   85,254
          Furniture and fixtures                                               8,208            13,280
          Information systems                                                 12,077            25,438
          Leasehold improvements                                               5,447            11,670
          Other                                                                1,658             2,065
                                                                          ----------        ----------
                                                                              60,034           137,707
          Less--accumulated depreciation and amortization                     14,320            39,637
                                                                          ----------        ----------
                                                                          $   45,714        $   98,070
                                                                          ==========        ==========
</TABLE>

The related depreciation and amortization expense for the years ended September
30, 1997 and 1998 was $8.5 million and $25.7 million, respectively.

                                       27
<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.  Debt

At September 30, 1997 and 1998, long-term debt consisted of:

<TABLE>
<CAPTION>

                                                                 At September 30,
                                                              ---------------------
                                                              1997             1998
                                                              ----             ----
                                                                   (in thousands)
<S>                                                       <C>               <C>
          Bank term loan                                  $   58,800        $  394,500
          Notes payable                                        2,294             1,825
          Other                                                  765               915
                                                          ----------        ----------
                                                              61,859           397,240
          Less--current portion of long-term debt              1,217             1,000
                                                          ----------        ----------

                                                          $   60,642        $  396,240
                                                          ==========        ==========

At September 30, 1998, the carrying amount of the above commitments approximated
fair value.

On October 28, 1997, the Company entered into a loan agreement with a syndicate
of banks pursuant to which the Company increased its aggregate available bank
financing from $100 million to $550 million, consisting of a $300 million six
year revolving line of credit (the "Revolving Facility") to be utilized in
connection with future acquisitions and for working capital and general
corporate purposes and a $250 million six year term loan ( the "Term Facility"
and together with the Revolving Facility, the "1997 Facilities") to be utilized
in connection with the acquisition of Visual Action. (See Note 4, Business
Acquisitions/Dispositions). The Company recognized an extraordinary loss of $0.6
million in the quarter ended December 31, 1997 resulting from the write-off of
the unamortized debt issuance fees relating to the Company's former bank
facilities. Approximately $4.8 million in debt issuance fees were incurred in
connection with the 1997 Facilities. Such fees are being amortized over the term
of the 1997 Facilities, which is approximately six years. 

In May, 1998, the Company repaid approximately $26 million under the Term
Facility thereby permanently reducing availability thereunder by such amount. In
December, 1998, the terms of the Revolving Facility were amended to reduce the
aggregate availability thereunder from $300 million to $250 million, to amend
certain financial covenants contained therein and to increase the interest rate
on amounts outstanding under the 1997 Facilities. Fees of approximately $1.2
million were incurred in connection with the amendments made to the 1997
Facilities in December, 1998. Such fees will be amortized over the remaining
term of the 1997 Facilities. As of December 18, 1998, the Company had
approximately $412.9 million outstanding under the 1997 Facilities. Cash on hand
as of such date was $12.9 million.

The maturity date of each of the Term Facility and the Revolving Facility is
September 30, 2003. Interest on outstanding amounts under the 1997 Facilities is
payable quarterly in arrears and at the option of the Company accrues at either
(i) LIBOR plus an applicable margin or (ii) an alternate base rate based upon
the greatest of (a) the agent bank's prime rate, (b) the three-month secondary
certificate of deposit rate and (c) the federal funds rate. The interest rate on
the 1997 Facilities is presently LIBOR plus 2.75%.

Principal on the Term Facility is payable in quarterly installments beginning on
December 31, 1998 with the final scheduled payment due on September 30, 2003.
Subject to reductions in such quarterly installments for prepayments made under
the Term Facility, at present, the Company will be required to repay an
aggregate of: (i) $22.4 million in fiscal 1999, (ii) $33.6 million in fiscal
2000, (iii) $44.8 million in fiscal 2001, (iv) $56 million in fiscal 2002 and
(v) $67.8 million in fiscal 2003. The Company is permitted and intends to draw
on the Revolving Facility to make certain of the above payments.

The 1997 Facilities are secured by substantially all of the assets of the
Company and its subsidiaries, and the Company and its subsidiaries have pledged
the stock of their respective subsidiaries for the ratable benefit of its
lending banks. The 1997 Facilities contain certain financial and other covenants
and restrictions, including without limitation restrictions on the ability of
the Company to pay dividends.

The aggregate scheduled payments of all long-term debt outstanding at September
30, 1998 (including amounts outstanding under the Term Facility), for the next
five years, are as follows: 1999--$24.3 million; 2000--$34.0 million;
2001--$70.0 million; 2002--$81.1 million; and 2003--$187.8 million; totaling
$397.2 million.

                                       28
<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.  Capital Stock

Stock Split

The Company declared a 2-for-1 split of its common stock effected by paying a
stock dividend of one new share for every share of the Company's common stock
outstanding. The stock dividend was paid on June 20, 1997 to stockholders of
record as of May 30, 1997. The accompanying consolidated financial statements,
including the earnings per common share calculation, have been restated to
reflect such stock split.

1993 Management Stock Plan

During the year ended September 30, 1993, the Company adopted the 1993
Management Stock Plan (the "Management Stock Plan"). Under the Management Stock
Plan, a committee of the Board of Directors granted to employees awards of the
Company's Series A non-voting common stock, par value $0.01 per share.

Prior to the Initial Public Offering in March, 1996, the Company sold common
stock pursuant to the Management Stock Plan at a price lower than its fair
market value and recorded non-cash compensation expense of $93,000 at such
time. Upon consummation of the Initial Public Offering, all shares of non-voting
common stock outstanding under the Management Stock Plan were converted into
664,450 shares of voting common stock, and such Management Stock Plan was then
terminated. In addition, the Company incurred an additional non-cash
compensation charge of $1.1 million upon the immediate vesting of such stock in
connection with the Initial Public Offering.

1996 Stock Option Plan

Effective January 1, 1996, the Company adopted the 1996 Stock Option Plan (the
"Option Plan"). The Option Plan is designed to provide employees with a more
direct stake in the Company's future welfare and an incentive to remain with the
Company. The Option Plan provides that options for an aggregate of 1,928,000
shares of the Company's Common Stock shall be available for grant, subject to
authorization by the Compensation Committee of the Board of Directors. The
purchase price per share under the Option Plan is the market price of the Common
Stock on the grant date. Generally, options granted under the Option Plan vest
over a period of three years from the grant date. As of September 30, 1998,
stock options to purchase an aggregate of 1,200,428 shares of Common Stock were
outstanding, of which options to purchase 261,858 shares of Common Stock were
vested.

The Company applies the provisions of APB No. 25, Accounting for Stock Issued to
Employees, in accounting for its stock-based awards. Accordingly, no
compensation cost has been recognized for its stock option plans.

The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions: risk-free
interest rate of 7%, 5% and 4% in 1996, 1997 and 1998, respectively; a dividend
yield of 0% in 1996, 1997 and 1998; volatility of 32.7% in 1996 and 1997 and 
67.4% in 1998, respectively, and an expected life of 5 years in 1996, 1997 and
1998.

Had the Company elected to apply the provisions of Statement of Financial
Accounting Standards (SFAS No. 123), Accounting for Stock Based Compensation,
net income would have been reduced by $78,000, or $0.01 per share, $675,000, or
$0.03 per share, and $823,000, or $0.03 per share, for fiscal years 1996, 1997 and
1998, respectively after accounting for stock-based compensation effective for
awards made after October 1, 1995.

                                       29

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the status of the Company's Option Plan at September 30, 1998 and
activity during the years ended September 30, 1998 is as follows:


</TABLE>
<TABLE>
<CAPTION>

                                                  1996                        1997                        1998           
                                         ------------------------    ------------------------    ------------------------ 
                                                 Weighted average            Weighted average            Weighted average 
(in thousands of shares)                 Shares   exercise price     Shares   exercise price     Shares   exercise price  
------------------------                 ------  ----------------    ------  ----------------    ------  ---------------- 
<S>                                      <C>     <C>                 <C>     <C>                 <C>     <C>
Outstanding at beginning of year           --        $   --           303        $14.75           737            23.22        
Options granted                           303         14.75           461         28.38           561            20.25
Options exercised                          --            --                                       (30)           23.38
Options forfeited/expired                  --            --           (27)        16.14           220            23.10
                                          ---        ------           ---        ------         -----            -----
Options outstanding at end of year        303         14.75           737         23.22         1,048            21.75
                                          ---        ------           ---        ------         -----            -----
                                                                                                 
Exercisable at end of year                  3         20.19           110         15.84           275            20.69
                                          ---        ------           ---        ------           ---            -----
                                                                                                 
Weighted average fair value of options                                                           
     granted during the year                           6.08                       10.67                          12.00
                                                     ------                       -----                          -----
</TABLE>

A summary of information about stock options outstanding and options exercisable
at September 30, 1998 is as follows (in thousands of shares):

<TABLE>
<CAPTION>
                                      Options Outstanding                 Options Exercisable
                            ----------------------------------------      -------------------
                                                            Weighted                Weighted
                                          Weighted          Average                  Average 
                                          Average          Exercise                 Exercise
Range of exercise prices    Shares     Remaining Term        Price        Shares      Price 
------------------------    ------     --------------      ---------      ------    ---------
<S>                         <C>        <C>                 <C>            <C>       <C>
$12.84 to $14.53              259           8.21             $14.42         149       $14.40

$20.19 to $29.28              643           9.20             $21.42          80       $22.83

$31.75 to $40.31              146           8.88             $37.60          46       $37.16

$12.84 to $40.31            1,048           8.91             $21.75          --           --
</TABLE>

In December, 1998, the Company permitted non-executive employees to forfeit any
outstanding options that they had been granted under the Option Plan and
exchange them for the same number of options with an exercise price equal to the
then current market price of the common stock (the "Repricing Plan"). Pursuant
to the terms of the Repricing Plan, participating employees were required to
consent to a new three-year vesting schedule for such newly-granted options.

1998 Stock Option Plan

Effective January 7, 1998, the Company adopted the 1998 Stock Option Plan (the
"1998 Option Plan"). The 1998 Option Plan, which has substantially identical
terms to the Option Plan, provides that options for an aggregate of 500,000
shares of Common Stock shall be available for award to all employees of the
Company with the exception of senior management of the Company, who are not
eligible to receive options under the 1998 Option Plan. As of September 30,
1998, no options had been granted under the 1998 Option Plan. The Company
intends to terminate the 1998 Option Plan as of December 31, 1998.

8.  Related Party Transactions

In the normal course of producing projects for clients, the Company periodically
uses the services of individuals related to and/or companies owned by relatives
of certain of its employees. During the years ending September 30, 1996, 1997
and 1998, the Company paid such vendors approximately $1.6 million, $0.6 million
and $1.4 million, respectively.

Rent paid to related parties during the years ending September 30, 1996, 1997
and 1998 was $0.1 million, $0.6 million and $0.6 million, respectively.

During fiscal 1998, the Company made loans aggregating $0.3 million to an
executive officer of the Company. The loans were made in part in connection with
the relocation of such executive and for other personal purposes. The loans bear
an interest rate of 8% per annum and mature in annual installments over a period
of three years. 

9.  Employee Benefit Plans

The Company maintains several defined contribution plans covering all qualified
employees. Effective January 1, 1997, the Company began matching $0.25 for each
dollar contributed by an employee, up to a maximum of 3% of such employee's base
compensation (subject to applicable limits under the Internal Revenue

                                       30

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Code of 1986, as amended. In addition, the Company continues to maintain several
existing defined contribution plans that it inherited in connection with its
acquisition of Visual Action in December, 1997. Under such plans, the Company
contributes varying amounts ranging from $0.25 to $0.50 for each dollar
contributed by an employee to such plan up to a maximum of 4% of base salary.
Company matching contributions during the years ended September 30, 1997 and
1998 totaled $0.1 million and $1.0 million, respectively.

10.  Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the carrying amounts used for income tax purposes which resulted
from the acquisition of certain business operations, the difference between
financial reporting recovery periods and tax reporting recovery periods and the
write-down of certain assets for financial reporting purposes.

Significant components of the Company's deferred tax assets and liabilities as
of September 30, 1997 and September 30, 1998 are as follows:

<TABLE>
<CAPTION>
                                                                          1997            1998
                                                                          ----            ----
                                                                             (in thousands)
<S>                                                                    <C>             <C>
         Deferred tax assets:
             NOL and tax credit carryforwards                          $      973      $    1,776
             Accrued interest                                                  --             247
             Allowance for doubtful accounts                                  155             733
             Restructuring and other reserves                               1,654           4,351
                                                                       ----------      ----------

                  Total deferred tax assets                                 2,782           7,107
             Valuation allowance                                             (672)           (653)
                                                                       ----------      ----------

         Net deferred tax assets                                       $    2,110      $    6,454

         Deferred tax liabilities:
             Tax over book depreciation and amortization                    1,899           5,293
             Amortization of intangibles                                      890             389
             Other                                                             36             410
                                                                       ----------      ----------
                  Total deferred tax liabilities                       $    2,825      $    6,092
                                                                       ----------      ----------

         Net deferred tax liability/(asset)                            $      715      $     (362)
                                                                       ----------      ----------
</TABLE>

At September 30, 1998, the Company had net operating loss ("NOL") carryforwards
for federal income tax purposes of approximately $1.6 million, that expire in
the years 2001 through 2007. All of these NOL carryforwards may be subject to
limitations under the change in ownership and consolidated return provisions of
the Internal Revenue Code. The use of the NOL carryforwards, as adjusted, may
also be limited for state and local income tax purposes. The Company has not
recorded any future benefit related to the usage of these NOL carryforwards. In
addition, during the year, the Company incurred a tax loss which will be carried
forward for state tax purposes. For foreign tax purposes, there are
approximately $1.0 million of foreign NOL carryforwards that may be carried
forward indefinitely.

Significant components of the provision for income taxes attributable to
continuing operations are as follows:

                                       31

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>

                                                                           1996             1997              1998
                                                                           ----             ----              ----
                                                                                       (in thousands)
<S>                                                                    <C>              <C>               <C>
Current:
    Federal                                                            $     2,121      $     7,224       $    (2,041)
    State                                                                    1,736            2,150               831
    Foreign                                                                     35            1,112               280
                                                                       -----------      -----------       ----------- 

         Total current tax                                                   3,892           10,486              (930)

Deferred:
    Federal                                                                    281            1,758             1,345
    State                                                                     129               352             (992)
    Foreign                                                                     --              (45)            1,201
                                                                       -----------      -----------       ----------- 

         Total deferred tax                                                    410            2,065             1,554
                                                                       -----------      -----------       ----------- 

Total provision for taxes                                              $     4,302      $    12,551       $       624
                                                                       ===========      ===========       ===========
</TABLE>

The reconciliation of income tax attributable to operations computed at the U.S.
federal statutory tax rates to income tax expense is as follows:

<TABLE>
<CAPTION>

                                                                            1996             1997              1998
                                                                            ----             ----              ----
                                                                                        (in thousands)
<S>                                                                    <C>              <C>               <C>
         Tax expense at statutory rate                                 $     4,302      $    10,714       $       546
         State income tax expense/(benefit) (net of federal tax)             1,212            1,626              (104)
         Non-cash compensation expense                                         375               --                --
         Non-deductible goodwill amortization                                   21              483             1,236
         Non-deductible expenses                                               243              113               181
         Change in valuation allowance                                      (2,012)            (645)              (19)
         Rate differential related to foreign operations                        --               --            (1,205)
         Other                                                                 161              260               (11)
                                                                       -----------      -----------       ----------- 

                                                                       $     4,302      $    12,551       $       624
                                                                       ===========      ===========       ===========
</TABLE>

11.  Major Customers

Revenue from two customers in the automotive and information technology
industries aggregated 15% and 13%, respectively, in fiscal 1996. In fiscal 1997
and 1998, there was no single customer which contributed more than 10% of the
Company's total revenue or accounted for more than 5% of accounts receivable at
September 30, 1997 or 1998, respectively.

12.  Commitments and Contingencies

Minimum annual rentals under noncancelable leases, excluding escalations based
upon increases in real estate taxes and operating expenses, are payable as
follows, for the year ended September 30: 1999--$9.3 million; 2000--$7.4
million; 2001--$6.2 million; 2002--$5.2 million; 2003 -- $4.4 million;
thereafter--$23.5 million; totaling $56.0 million.

Rent expense charged to operations in fiscal 1996, fiscal 1997 and fiscal 1998
was $2.7 million, $6.6 million and $9.4 million, respectively.

The Company is, from time to time, a defendant in various lawsuits arising in
the ordinary course of business. In the opinion of management resolving these
actions will not have a material effect on the Company's financial condition,
results of operations or liquidity.

                                       32

<PAGE>
                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.  Supplemental Disclosures of Cash Flow Information

Interest paid was $7.9 million, $2.0 million and $21.9 million during the years
ended September 30, 1996, 1997 and 1998, respectively. Taxes paid were $2.1
million, $8.1 million and $12.2 million during the years ended September 30,
1996, 1997 and 1998, respectively.

14.  Earnings per Common Share

Effective October 1, 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 128, Earnings per Share. The standard
requires a change in the method used to compute earnings per share, a dual
presentation of basic earnings per common share and diluted earnings per common
share and the restatement of prior periods presented.

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>

                                                                            1996                 1997                  1998
                                                                            (amounts in thousands, except per share amounts)
                                                                            ------------------------------------------------
<S>                                                                         <C>                  <C>                 <C>
Net income for basic and diluted earnings per share:
    Income before taxes and extraordinary charge                            $12,291              $30,613             $1,559
    Reduction in interest expense from the conversion
      of the Convertible Note                                                   926                   --                 --
                                                                            ------------------------------------------------
    Adjusted income before taxes and extraordinary charge                    13,217               30,613              1,559
    Tax provision                                                            (4,560)             (12,551)              (624)
                                                                            ------------------------------------------------
    Adjusted net income before extraordinary charge                           8,657               18,062                935
    Extraordinary charge                                                         --                   --               (605)
                                                                            ------------------------------------------------
    Net income                                                               $8,657              $18,062               $330
                                                                            ================================================
Weighted average shares of common stock outstanding:
    Weighted average shares of common stock outstanding                       8,144               21,719             23,616
    Conversion of 11.5% Convertible Note                                      4,110                   --                 --
    Conversion of preferred stock                                             3,083                   --                 --
    Exercise of warrants                                                      1,069                   --                 --
                                                                            ------------------------------------------------
    Weighted average shares of common stock
      outstanding for basic earnings per share                               16,406               21,719             23,616
    Effect of stock options                                                      --                   --                 --
                                                                            ------------------------------------------------
    Weighted average shares of common stock
      outstanding for diluted earnings per share                             16,406               21,719             23,616
                                                                            ================================================
Basic and diluted earnings per share:
    Net income before extraordinary charge                                    $0.53                $0.83              $0.04
    Extraordinary charge                                                         --                   --              (0.03)
                                                                            ------------------------------------------------
    Net income                                                                $0.53                $0.83              $0.01
                                                                            ================================================
</TABLE>

Basic and diluted earnings per common share for the year ended September 30,
1996 has been calculated assuming the issuance of common stock for nominal
consideration arising from the conversion and exercise of all dilutive
securities (which took place prior to the Company's initial public offering on
March 15, 1996) were outstanding for all periods presented.

                                      33

<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

                                    Part III

Item 10. Directors and Executive Officers of the Registrant

"Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" to be contained in the Proxy Statement are hereby incorporated by
reference. See also "Executive Officers and Directors of the Company" set forth
in item 4A of Part I hereto.

Item 11. Executive Compensation

"Executive Compensation" to be contained in the Proxy Statement is hereby
incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

"Security Ownership of Certain Beneficial Owners and Management" to be contained
in the Proxy Statement is hereby incorporated by reference.

Item 13. Certain Relationships and Related Transactions

"Certain Relationships and Transactions with Related Persons" to be contained in
the Proxy Statement is hereby incorporated by reference.

                                     Part IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this Annual Report on Form
10-K:

       (1)  The response to this portion of Item 14 is set forth in Item 8 of
            Part II hereof.

       (2)  Financial Statement Schedules.

       Schedules for which provision is made in the applicable accounting
       regulations of the Securities and Exchange Commission are not required
       under the related instructions or are inapplicable, and therefore have
       been omitted.

       (3)  Exhibits

       See accompanying Index to Exhibits. The Company will furnish to any
       stockholder, upon written request, any exhibit listed in the accompanying
       Index to Exhibits upon payment by such stockholder of the Company's
       reasonable expenses in furnishing any such exhibit.

(b)  Reports on Form 8-K

       None.


                                       34
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized, on December 28,
1998.

                               CARIBINER INTERNATIONAL, INC.
                              (Registrant)

                               By: /S/ ROBERT F. BURLINSON
                                   -------------------------------------------
                                   Name:    Robert F. Burlinson
                                   Title:   Executive Vice President and Chief
                                            Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

                Signature                                     Title                             Date
                ---------                                     -----                             ----
<S>                                         <C>                                          <C>
         /S/ RAYMOND S. INGLEBY             Chairman of the Board*                       December 28, 1998
-----------------------------------------
           Raymond S. Ingleby


                                            President, Chief Executive Officer and       December __, 1998
-----------------------------------------   Director*
         Christopher A. Sinclair


         /S/ ROBERT F. BURLINSON            Executive Vice President and Chief           December 28, 1998
-----------------------------------------   Financial Officer (Principal Financial
           Robert F. Burlinson              and Accounting Officer)


            /S/ ERROL M. COOK               Director                                     December 28, 1998
-----------------------------------------
              Errol M. Cook


          /S/ BRYAN D. LANGTON              Director                                     December 28, 1998
-----------------------------------------
            Bryan D. Langton


           /S/ SIDNEY LAPIDUS               Director                                     December 28, 1998
-----------------------------------------
             Sidney Lapidus


          /S/ DAVID E. LIBOWITZ             Director                                     December 28, 1998
-----------------------------------------
            David E. Libowitz


        /S/ C. ANTHONY WAINWRIGHT           Director                                     December 28, 1998
-----------------------------------------
          C. Anthony Wainwright

</TABLE>

*Mr. Ingleby was principal executive officer of the Registrant during the period
covered by this Report, as well as on the date on which the Registrant's
independent auditors completed their audit in respect of the financial
statements contained herein. Mr. Sinclair commenced employment with the
Registrant on December 21, 1998.


                                       35

<PAGE>

                                INDEX TO EXHIBITS

The following is a list of all exhibits filed as part of this report


Exhibit
Number                         Description of Document
-------

3.1          Restated Certificate of Incorporation of the Company, filed
             March 15, 1996, with the Secretary of State of the State of
             Delaware (filed as Exhibit 3.1 to the Company's Quarterly Report on
             Form 10-Q for the quarterly period ended March 31, 1996 and
             incorporated herein by reference).

3.2          Certificate of Amendment to the Restated Certificate of
             Incorporation of the Company, filed March 30, 1998, with the
             Secretary of State of the State of Delaware (filed as Exhibit 3.2
             to the Company's Quarterly Report on Form 10-Q for the quarterly
             period ended March 31, 1998 and incorporated herein by reference).

3.3          Second Amended and Restated By-Laws of the Company (filed as
             Exhibit 3.2 (b) to the Company's Registration Statement on Form S-1
             (Registration No. 33-80481) and incorporated herein by reference).

4            Specimen of Certificate of Common Stock of the Company (filed as
             Exhibit 4 to the Company's Registration Statement on Form S-1
             (Registration No. 33-80481) and incorporated herein by reference).

+10.1        1996 Stock Option Plan of the Company, as amended (filed as exhibit
             10.1 to the Company's Quarterly Report on Form 10-Q for the
             quarterly period Ended March 31, 1998 and incorporated herein by
             reference).

+10.2        1998 Stock Option Agreement (filed as Exhibit 10.2 to the Company's
             Quarterly Report on Form 10-Q for the quarterly period ended March
             31, 1998 and incorporated herein by reference).

+10.3        Form of Stock Option Agreement in connection with 1996 Stock Option
             Plan of the Company (filed as Exhibit 10.2 to the Company's Annual
             Report on Fork 10-K for the fiscal year ended September 30, 1996
             and incorporated herein by reference).

+10.4        Non-Employee Directors' Stock Plan of the Registrant (filed as an
             exhibit to the Company's Registration Statement on Form S-1
             (Registration No. 33-80481) and incorporated herein by reference).

+10.5        Employment Agreement, dated as of October 1, 1995 (the "Ingleby
             Employment Agreement"), by and between the Company and Raymond S.
             Ingleby (filed as Exhibit 10.5 to the Company's Registration
             Statement on Form S-1 (Registration No. 33-80481) and incorporated
             herein by reference).

+10.6        Amendment No.1, dated as of October 1, 1998, to the Ingleby
             Employment Agreement.

+10.7        Employment Agreement, dated as of December 21, 1998, by and between
             the Company and Christopher A. Sinclair.

+10.8        Employment Agreement, dated as of December 1, 1995, by and between
             the Company and Mark M. Cohen (filed as an exhibit to the Company's
             Registration Statement on Form S-1 (Registration No. 33-80481) and
             incorporated herein by reference).

+10.9        Employment Agreement, dated as of July 25, 1995, by and between
             Caribiner, Inc. and Brian Shepherd (filed as Exhibit 10.7 to the
             Company's Annual Report on Form 10-K for the fiscal year ended
             September 30, 1996 and incorporated herein by reference).

+10.10       Employment Agreement, dated October 14, 1996, by and between the
             Company and

                                       36
<PAGE>

             Lawrence P. Golen (filed as Exhibit 10.8 to the Company's Annual
             Report on Form 10-K for the fiscal year ended September 30, 1996
             and incorporated herein by reference).

+10.11       Employment Agreement, dated June 9, 1998, by and between the
             Company and Robert F. Burlinson (filed as Exhibit 10.1 to the
             Company's Quarterly Report on Form 10-Q for the quarterly period
             ended June 30, 1998).

10.12        Credit Agreement, dated as of October 28, 1997 (the "Credit
             Agreement"), among the Company, Caribiner, Inc., the several
             lenders named therein and the Chase Manhattan Bank, as
             Administrative Agent, and Merrill Lynch Capital Corporation, as
             Syndication Agent (schedules and exhibits omitted-- the Company
             agrees to furnish a copy of any schedule or exhibit to the 
             Commission upon request).

10.13        First Amendment and Agreement, dated as of March 31, 1998, to the
             Credit Agreement (schedules and exhibits omitted-- the Company
             agrees to furnish a copy of any schedule or exhibit to the 
             Commission upon request).

10.14        Second Amendment and Waiver, dated as of December 18, 1998, to the
             Credit Agreement (schedules and exhibits omitted-- the Company
             agrees to furnish a copy of any schedule or exhibit to the 
             Commission upon request).

10.15        Stockholders Agreement, dated as of March 15, 1996, among the
             Company, Warburg, Pincus Investors, L.P. and Raymond S. Ingleby
             (filed as an exhibit to the Company's Registration Statement on
             Form S-1 (Registration No. 33-80481) and incorporated herein by
             reference).

21           Subsidiaries of the Company.

23           Consent of Ernst & Young LLP.

27           Financial Data Schedule.

-------
+            Management contracts or compensatory plans or arrangements required
             to be filed as an exhibit to this Form 10-K pursuant to Item 14(a)
             (3).