<PAGE>

                                  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, 1997

                                       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 Registration 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. /X/

As of December 15, 1997, the aggregate market value of voting stock held by
non-affiliates of the registrant was $618,336,698.

As of December 15, 1997, the registrant had 23,488,815 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 1998 Annual Meeting of Stockholders
     (the "Proxy Statement") are incorporated by reference into Part III hereof.


<PAGE>
                                     Part I

Item 1. Business

     Caribiner International, Inc. is a leading international producer of
meetings, events and training programs, a provider of audio visual 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 "Company" refer to Caribiner International, Inc. and its
subsidiaries and the references to a fiscal year are to the Company's fiscal
years 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 audio visual 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

     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 four full fiscal
years Caribiner completed 18 acquisitions. Also, since October 1, 1997, the
Company has completed three additional acquisitions. The following provides a
brief summary of the acquisitions completed by Caribiner since September, 1996.

                                       1
<PAGE>


     In September, 1996, the Company acquired Total Audio Visual Services
("TAVS"), a leading provider of audio visual equipment rentals, sales and
installations and related staging services, including hotel audio visual
outsourcing services, in the United States. The acquisition of TAVS enabled
the Company to offer its own audio visual equipment and staging services for use
at meetings and events serviced by the Company and reduce the Company's reliance
on third party vendors. TAVS reported revenue of $45.9 million for the year
ended December 31, 1995. 

     In December, 1996, the Company acquired all of the outstanding capital
stock of Rome Network, Inc. ("Rome"), a regional provider of business
communications services in the San Francisco area. The Company integrated Rome 
into the San Francisco office of its Caribiner Communications division
(sometimes hereinafter referred to as the "Communications division"), thereby
expanding and strengthening its presence  in the business communications
services market in the geographic areas formerly served by Rome. Rome provided
business communications services to various  corporate clients including Charles
Schwab & Co., Inc., SAP America and Sun  Microsystems, Inc. Rome had revenue of
approximately $2.4 million for its fiscal year ended February 29, 1996.

     In January, 1997, the Company acquired Video Supply Company, Inc. d/b/a
Projexions Video Supply, a provider of audio visual equipment rentals, including
hotel audio visual outsourcing services, and related staging services in the
southeastern U.S.  The acquisition of Projexions, whose operations were
integrated with those of TAVS, strengthened the Company's position as a leading
provider of audio visual equipment rentals and related staging services,
including hotel audio visual outsourcing services, in its  region. Projexions
reported revenue of $17.7 million for the year ended December 31, 1995 and 
approximately $18.0 million for the ten months ended October 31, 1996.

     In January, 1997, the Company acquired all of the outstanding capital stock
of Blumberg Communications Inc. ("Blumberg"), a provider of audio visual
equipment rentals, sales and related staging services, including hotel audio
visual outsourcing services, in the upper mid-west and southern U.S. The Company
integrated Blumberg's operations with its existing TAVS operations, thereby
expanding its presence in the geographic region which Blumberg served. Blumberg
reported revenue of $42.3 million for the year ended May 31, 1996.

     In April, 1997, the Company acquired the assets of D&D Enterprises, Inc.
d/b/a Show Solutions ("Show Solutions"), a provider of staging and show
services based in Atlanta. The Company has integrated Show Solutions with its
TAVS operations and has used it to strengthen TAVS' service capabilities. Show
Solutions reported revenue of approximately $8.7 million for the year ended
December 31, 1996. 

     In May, 1997, the Company acquired substantially all of the assets
of Wavelength Corporate Communications Pty Limited ("Wavelength"), a provider
of business communications services in Australia and New Zealand. The
acquisition of Wavelength enabled the Company to develop further its 
international presence and extend relationships with a number of existing
clients, as well as establish new relationships with several multi-national
companies. Wavelength had revenue of approximately $7.2 million for the year
ended December 31, 1996.


     Also in May, 1997, the Company acquired all of the outstanding capital
stock of Watts/Silverstein, Inc. ("Watts"), a Seattle-based business
communications services company specializing in digial media consulting and
production. The acquisition resulted in the establishment of a digital media
group within Caribiner. The acquisition, which was integrated into the Company's
Communications division, has also served to expand the Company's operations on
the west coast and introduce it to several new clients. Watts had revenue of
approximately $4.1 million for its fiscal year ended December 31, 1996.

     In June, 1997, the Company acquired all of the outstanding capital stock of
WCT Live Communication Limited ("WCT"), a provider of business communications
services in the United Kingdom. WCT reported revenue of approximately $22.7
million for the year ended May 31, 1997.

     In July, 1997, the Company acquired all of the outstanding capital stock of
Bauer Audio Visual, Inc. ("Bauer"), a provider of audio visual equipment rentals
and hotel audio visual outsourcing services throughout the United States. The
acquisition of Bauer, which is being integrated into TAVS, allowed the Company
to enter several new markets, including Mexico. Bauer reported revenue of
approximately $42.4 million for the year ended December 31, 1996. 

     Also in July, 1997, the Company acquired all of the outstanding capital
stock of Envision Corporation ("Envision"), a Boston-based business
communications services provider. The Company integrated Envision into the
Boston office of the Communications division, thereby strengthening the
Company's resources and gaining exposure to a new group of clients. Envision had
revenue of approximately $7.4 million for its fiscal year ended December 31,
1996.

     Subsequent to the end of fiscal 1997, in October, 1997, the Company 
acquired all of the capital stock of Spectrum Data Systems, Inc. ("Spectrum"),
an Atlanta-based provider of audio visual presentation systems design,
installation and service with a primary customer base in the southeastern U.S.
Spectrum 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 audio visual services to its clients in the southeastern
U.S.

     In November, 1997, the Company acquired Visual Action Holdings plc ("Visual
Action"), a United Kingdom public company. Visual Action provides corporate
meeting services in the United States and the United Kingdom, including audio
visual and exhibition services, and video production equipment rentals in
the United States, United Kingdom and Southeast Asia.  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. Upon completion of the compulsory
acquisition process to acquire shares of Visual Action not tendered pursuant to
the Company's tender offer for such shares, the total cash acquisition price of
all of the outstanding capital shares of Visual Action is expected to be
approximately $253.0 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Recent Developments." (The
Company has announced that it intends to dispose of the video production
equipment rental operations of Visual Action as soon as practicable.) 


     In December, 1997, the Company completed the acquisition of Consumer Access
Limited ("Consumer Access"), a business communications services provider based
in Hong Kong. The Company is integrating Consumer Access into its Hong Kong
office, which was opened in June, 1996.


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. The Company also
provides, through its TAVS division and through its Audio Visual Headquarters
("AVHQ"),  Hospitality Resources ("HRI") and Blitz subsidiaries (which were
acquired upon the acquisition of Visual Action) (hereinafter sometimes referred
to, together with TAVS, as the "AV operations"), audio visual equipment rentals,
sales and installations and related staging services, as well as hotel audio
visual 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.

     Audio visual equipment rentals, sales and installations and related 
staging services, including the Company's being the preferred in-house provider
of audio visual equipment rentals in approximately 475 hotel properties 
located throughout the U.S, Mexico and the Caribbean and is 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.

     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.

                                       2
<PAGE>


     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.


     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 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 relationships with Ford Motor Co. and IBM, management
decided to increase Company resources devoted to the servicing of these two
accounts. Accordingly, the Communications division maintains a Detroit facility
with approximately  30 full-time employees to service the business
communications needs of numerous individual buyers from the various Ford
business units for whom  Caribiner executes projects. In addition, in July,
1995, Caribiner dedicated personnel and facilities in its White Plains (NY)
office to provide services to IBM on a worldwide basis. Caribiner believes that
the strategy it has followed with the Ford Motor Co. and IBM 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 operations target hotels with sizable conference space
whose guests' meetings and events utilize audio visual equipment, corporate
clients with significant audio visual equipment needs and production companies
and other business communications services companies that require audio visual
and staging services. With respect to hotel audio visual 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 Westin Hotel
Company and Doubletree Hotels Corporation pursuant to which such companies
promote the  Company's AV operations to hotels operated or franchised under
their respective flags. The Company has also entered into an agreement with
Starwood Lodging Corporation ("Starwood") pursuant to which TAVS is the
preferred in-house audio visual services provider to various hotels owned by
Starwood.

     MES' 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, it 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 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
and international operations employs a full-time sales and marketing staff of
approximately 100 persons, and has dedicated a senior 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 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, the AV operations employ 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.

                                       3
<PAGE>


Operations

      General. Each of the Company's regional offices in the Communications
division 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, staging and execution of a
project; and producers and project managers who have ultimate responsibility for
project execution, media creation and theatrical staging of an event. In the
TAVS division (as well as in the AVHQ and HRI subsidiaries) the Company employs

on-site service representatives to serve hotel properties. In addition, the
Company's AV operations maintain regional inventory support and sales offices in
various locations throughout the U.S.  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 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.

     Although each of the Company's office focuses primarily on serving the 
needs of clients located in its geographic region, 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. Caribiner has also centralized the accounting,
finance, and information technology ("IT") functions of the Company (except for
those of Visual Action, whose administrative and IT functions will be
centralized, as appropriate, as Visual Action is integrated with the Company) in
New York and Atlanta to minimize overhead and administrative expense.

     Foreign Operations. During fiscal 1997, the Company's foreign operations,
which are predominantly located in the United Kingdom, generated revenue of
$52.8 million and operating income of $1.5 million and at September 30, 1997 had
identifiable assets, including goodwill, of $55.4 million.

Employees

     As of December 15, 1997, Caribiner employed approximately 3,680 full-time
employees, of which 3,020 employees were located domestically and 660 were
located internationally.

     Except for approximately 15 employees of the Company's Bauer Audio 
Visual, Inc. subsidiary, 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.

                                       4

<PAGE>

     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.

Item 2. Properties

     Caribiner's corporate headquarters and New York office 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. The Company is presently reviewing its future space
requirements, but has not entered into any commitments.

     The Company also leases offices and warehouse space in cities throughout
the United States, as well as in London, Sydney, Melbourne, 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.

     The principal offices for the Company's TAVS division are located in
Atlanta in leased offices occupying approximately 73,500 square feet at 1990
Defoor Avenue, Atlanta, Georgia 30318. The lease for this space expires in 2000.

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


    Name               Age                 Position
    ----               ---                 --------
Raymond S. Ingleby ....... 34   Chairman of the Board and Chief Executive 
                                Officer of Caribiner International, Inc.

Richard H. Vent .......... 56   President and Chief Operating Officer of
                                Caribiner International, Inc.

Arthur F. Dignam ......... 51   Executive Vice President and Chief Financial 
                                and Administrative Officer of Caribiner 
                                International, Inc.

Mark M. Cohen ............ 50   Executive Vice President-Strategic Planning and 
                                Development of Caribiner International, Inc.

Lawrence P. Golen ........ 40   Executive Vice President of Caribiner 
                                International, Inc. and President of Total 
                                Audio Visual Services
                          
Brian Shepherd ........... 40   Executive Vice President of Caribiner 
                                International, Inc. and President of 
                                Caribiner Communications
                          
Errol M. Cook ...........  58   Director
                          
Bryan D. Langton ........  61   Director
                          
Sidney Lapidus ..........  60   Director
                          
David E. Libowitz .......  34   Director
                          
C. Anthony Wainwright ...  64   Director

                                       5

<PAGE>

     Raymond S. Ingleby has been a director and Chief Executive Officer of the
Company since its formation in 1989, and Chairman since June, 1993. 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.

     Richard S. Vent has been President and Chief Operating Officer of the

Company since September, 1997. Prior to joining the Company, Mr. Vent was a
partner in New Century Equity Corporation, a buy-out fund serving corporate and
institutional pension funds from 1995 to 1997. Prior thereto, Mr. Vent served as
President of ARAMARK's leisure and international businesses from 1985 to 1995,
where he was responsible for ARAMARK's international food service operations in
13 countries, as well as its domestic leisure operation, including hotel
services and concessions.

     Arthur F. Dignam has been Executive Vice President and Chief Financial
Officer of the Company since February, 1994 and Chief Administrative Officer
since November, 1995. Prior to joining the Company, Mr. Dignam worked as an
independent consultant from August, 1993 to January, 1994, and was Vice
President and Chief Financial Officer for Panavision International, the
privately-held predecessor to Panavision Inc., a company that manufactures high
quality cameras and accessories for the film and television industry, from
February, 1989 to July, 1993. 

     Mark M. Cohen has been Executive Vice President-Strategic Planning and
Development of the Company since July, 1997.  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. Prior to joining the Company, Mr. Cohen served
in various general management positions with Maritz Inc., a marketing service
and performance improvement company, from June, 1976 to November, 1993.

     Lawrence P. Golen has been Executive Vice President of the Company and
President of TAVS since October, 1996, when he joined the Company after its
acquisition of TAVS from General Electric Capital Computer Leasing Corporation
("GECCLC"). Prior thereto, Mr. Golen served as General Manager of TAVS from
September, 1994 to October, 1996 and as General Manager of the Test Equipment
Management Services division of GECCLC from May, 1994 to October, 1996. Prior
thereto, Mr. Golen served as Vice President-Marketing and Sales of Douglas
Manufacturing from January, 1993 to April, 1994. 

     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 has been the Chairman Emeritus of Holiday Inn Worldwide, a subsidiary of
Bass plc, since December, 1996. Prior thereto 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 Bass plc.

     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 Pacific Greystone Corporation, Knoll Inc., Grubb & Ellis and 
Panavision Inc., 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 TV Filme, Inc., as well as certain privately held companies.

     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 All-Comm Media Co., American Woodmark Corporation, Del Webb
Corp., Gibson Greetings, Inc. and Advanced Polymer Systems.

                                       6


<PAGE>

                                     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
Common Stock was not publicly traded prior to March 11, 1996, the date of its
initial public offering. The number of stockholders of record of Common Stock on
December 1, 1997 was 152.

                                                             Price Range
                                                             -----------
                                                           High          Low
                                                           ----          ---
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



Fiscal 1996:                                                                  
     Second Quarter (from March 11, 1996) ............    13 7/16      10 9/16 
     Third  Quarter ..................................    18 3/8       12 1/4 
     Fourth Quarter ..................................    21 1/2       14     

     The closing price per share of the Common Stock on December 22, 1997 was 
$38.00.
                                                                              
     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
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, 1997:

     1. On July 1, 1997, the Company granted to one employee options to purchase
an aggregate of 7,000 shares of Common Stock at an exercise price per share of
$32.78125 pursuant to a stock option agreement under the Company's 1996 Stock
Option Plan. Pursuant to the terms of such option agreement, one third of such
options vest on July 1, 1998; one third of such options vest and become
exercisable on July 1, 1999, and one third of such options vest and become
exercisable on July 1, 2000.

     2. On July 1, 1997, the Company issued and sold an aggregate of 10,152 
shares of Common Stock to ten former stockholders of SCH International Limited
(the "Sellers") (the capital stock of which was purchased by the Company in
June, 1996) in connection with the settlement of any future obligations of
the Company to make contingent payments to the Sellers.

     3. On July 3, 1997, the Company granted to four employees options to
purchase an aggregate of 12,000 shares of Common Stock at an exercise price per
share of $33.0625 pursuant to stock option agreements under the Company's 1996
Stock Option Plan. Pursuant to the terms of such option agreements, one third of
such options vest on July 3, 1998; one third of such options vest and become
exercisable on July 3, 1999, and one third of such options vest and become
exercisable on July 3, 2000.

     4. On July 3, 1997, the Company issued and sold an aggregate of 167,762
shares of Common Stock to three former stockholders of Bauer Audio Visual, Inc.
("Bauer") in connection with the purchase of all of the outstanding capital
stock of Bauer.

     5. On July 9, 1997, the Company granted to twenty-nine employees options to
purchase an aggregate of 42,100 shares of Common Stock at an exercise price per
share of $36.15625 pursuant to stock option agreements under the Company's 1996
Stock Option Plan. Pursuant to the terms of such option agreements, one third of
such options vest on July 9, 1998; one third of such options vest and become
exercisable on July 9, 1999, and one third of such options vest and become
exercisable on July 9, 2000.


     6. On July 9, 1997, the Company issued and sold an aggregate of 42,372
shares of Common Stock to six former stockholders of Envision Corporation
("Envision") in connection with the purchase of all of the outstanding capital
stock of Envision.


                                       7
<PAGE>



     7. On September 29, 1997, the Company granted to four employees options to
purchase an aggregate of 68,500 shares of Common Stock at an exercise price per
share of $40.1875 pursuant to stock option agreements under the Company's 1996
Stock Option Plan. Pursuant to the terms of such option agreements, one third of
such options vest on September 29, 1998; one third of such options vest and
become exercisable on September 29, 1999, and one third of such options vest and
become exercisable on September 29, 2000.

     There were no underwriters employed in connection with any of the
transactions set forth above.
 
      The transactions described above were effected in reliance upon an
exemption from the registration requirements of the Securities Act of 1933, as
amended, on the basis that such transactions did not involve any public
offering. The recipients of securities in each 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,
1997.
                                       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, 1993, 1994, 1995, 1996 and 1997, are derived
from, and are qualified by reference to, the 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 financial statements and
related notes thereto and other information included elsewhere in this Form
10-K.

<TABLE>
<CAPTION>
                                                                                     Year ended September 30,
                                                                  -----------------------------------------------------------------
                                                                    1993          1994          1995          1996          1997
                                                                  ---------     ---------     ---------     ---------     ---------
<S>                                                               <C>           <C>           <C>           <C>           <C>      
Statement of Operations Data:
Service revenue ..............................................    $  50,107     $  59,174     $  81,131     $ 148,330     $212,393 
Rental revenue  ..............................................          --            --            --            --       129,865
                                                                  ---------     ---------     ---------     ---------     ---------
   Total revenue .............................................       50,107        59,174        81,131       148,330      342,258

Cost of service revenue ......................................       34,907        39,724        54,312        99,797      143,002
Cost of rental revenue .......................................          --            --            --            --        83,764
                                                                  ---------     ---------     ---------     ---------     ---------
   Total revenue .............................................       34,907        39,724        54,312        99,797      226,776

Gross profit .................................................       15,200        19,450        26,819        48,533      115,492
Selling, general and administrative expenses .................       12,551        14,349        19,306        30,442       71,270
Non-cash compensation expense(a) .............................          --            --            --          1,072         --
Depreciation and amortization ................................        3,852         2,137         2,330         3,142       11,180
Write-off of certain intangibles(b) ..........................        4,614          --            --            --           --
                                                                  ---------     ---------     ---------     ---------     ---------
Total operating expenses .....................................       21,017        16,486        21,636        34,656       82,450
                                                                  ---------     ---------     ---------     ---------     ---------
Operating income (loss) ......................................       (5,817)        2,964         5,183        13,877       33,042
Interest expense with related parties ........................        1,435         2,107         2,234         1,199         --  
Interest expense, other ......................................          222           502         1,259           387        2,429
                                                                  ---------     ---------     ---------     ---------     ---------
Income (loss) before taxes ...................................       (7,474)          355         1,690        12,291       30,613
Provision for taxes ..........................................           23            62           264         4,302       12,551
                                                                  ---------     ---------     ---------     ---------     ---------
Net income (loss) ............................................       (7,497)          293         1,426         7,989     $ 18,062
Preferred stock dividends(c) .................................         (517)         (582)         (655)         (327)        --
                                                                  ---------     ---------     ---------     ---------     ---------
Net income (loss) available to common stockholders ...........    $  (8,014)    $    (289)    $     771     $   7,662     $ 18,062
                                                                  ---------     ---------     ---------     ---------     ---------
Earnings per common share(d) .................................                  $    0.60     $    0.25     $    0.53     $   0.83
                                                                                ---------     ---------     ---------     =========

<CAPTION>
                                                                                      Year ended September 30,
                                                                  -----------------------------------------------------------------
                                                                     1993          1994         1995           1996         1997
                                                                  ---------     ---------     ---------     ---------     ---------
<S>                                                                <C>           <C>           <C>           <C>           <C>     
Balance Sheet Data:
Working capital (deficit) ...........................              $ (1,349)     $ (1,452)     $    352      $  7,488      $ 36,151
Total assets ........................................                15,182        31,266        45,298       126,322       313,877
Total debt, including accrued interest ..............                19,223        24,531        34,175        22,839        61,859
Stockholders' equity (deficit) ......................               (12,269)      (13,249)      (12,434)       53,468       171,434
</TABLE>

                      See Notes to Selected Financial Data


                                       9

<PAGE>


                        NOTES TO SELECTED FINANCIAL DATA


(a)  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 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.

(b)  Reflects adjustment to net realizable value of certain intangibles,
     principally module and film libraries acquired in purchase business
     transactions.

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

(d)  Earnings per common share for the years ending September 30, 1994, 1995 and
     1996 has been calculated using the weighted average number of shares of
     Common Stock outstanding during the period, plus Common Stock issued
     pursuant to the Management Stock Plan and warrants to purchase Common Stock
     issued at prices below the Initial Public Offering price of $17.00 per
     share during the twelve months immediately preceding December 15, 1995 (the
     initial filing date of the Registration Statement relating to the Initial
     Public Offering), assuming such Common Stock was outstanding for all
     periods presented. In addition, net income per common share assumes
     conversion of the Company's 11.5% Convertible Promissory Note (the
     "Convertible Note") and the conversion of all outstanding shares of
     preferred stock into shares of Common Stock (which, in each case, occurred
     on March 15, 1996) as if such conversions occurred on October 1, 1994.
     Accordingly, net income per common share reflects adjustments to eliminate
     interest expense incurred on the Convertible Note during each of fiscal
     1994, fiscal 1995 and fiscal 1996, and to eliminate accrued preferred stock
     dividends.


                                      10
<PAGE>


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

     Certain statements contained herein are forward-looking statements that
are made pursuant to 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 and the seasonality and episodic nature of the Company's business.

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,
                                                        --------------------------------------------------------------------------
                                                                 1995                      1996                     1997
                                                        ----------------------    ---------------------     ----------------------
                                                                                (Dollars in thousands)
<S>                                                     <C>             <C>       <C>             <C>      <C>             <C>   
Service revenue ....................................    $ 81,131        100.0%    $148,330        100.0%   $ 212,393        62.1%
Rental revenue .....................................         --           --           --           --       129,865        37.9
                                                        --------        -----     --------        -----     --------       ----- 
   Total revenue ...................................      81,131        100.0%     148,330        100.0%     342,258       100.0%

Cost of service revenue ............................      54,312         66.9       99,797         67.3      143,002        41.8 
Cost of rental revenue .............................         --           --           --           --        83,764        24.5
                                                        --------        -----     --------        -----     --------       -----
   Total cost of revenue ...........................      54,312         66.9       99,797         67.3      226,766        66.3
                                                        --------        -----     --------        -----     --------       -----
Gross profit .......................................      26,819         33.1       48,533         32.7      115,492        33.7
Selling, general and administrative expenses .......      19,306         23.8       30,442         20.5       71,270        20.8
Non-cash compensation expense ......................        --            --         1,072          0.7         --            --
Depreciation and amortization ......................       2,330          2.9        3,142          2.1       11,180         3.3
                                                        --------        -----     --------        -----     --------       ----- 
Total operating expenses ...........................      21,636         26.7       34,656         23.4       82,450        24.1
                                                        --------        -----     --------        -----     --------       ----- 
Operating income ...................................       5,183          6.4       13,877          9.4       33,042         9.6
Interest expense with related parties ..............       2,234          2.8        1,199          0.8         --            --
Interest expense, other ............................       1,259          1.6          387          0.3        2,429         0.7
                                                        --------        -----     --------        -----     --------       ----- 
Income before taxes ................................       1,690          2.1       12,291          8.3       30,613         8.9
Provision for taxes ................................         264          0.3        4,302          2.9       12,551         3.7
                                                        --------        -----     --------        -----     --------       ----- 
Net income .........................................    $  1,426          1.8%    $  7,989          5.4%   $  18,062         5.2%
                                                        ========        =====     ========        =====     ========       ===== 
</TABLE>


Results of Operations

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 audio visual equipment through the Company's Total
Audio Visual Services ("TAVS") 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 Audio Visual, 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 $67.0 million, or 138%, from $48.5
million in fiscal 1996 to $115.5 million in fiscal 1997, primarily as a result
of the revenue growth described above. As a percentage of service revenue, gross
profit was 32.7% in each of fiscal 1996 and 1997. Gross profit as a percentage
of rental revenue was 35.5%.

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 

                                       11

<PAGE>

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 $11.2 million in fiscal 1997, an increase of $8.1 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 $4.8 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 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.


Fiscal 1996 Compared to Fiscal 1995


Revenue. Revenue increased $67.2 million, or 83%, from $81.1 million in fiscal
1995 to $148.3 million in fiscal 1996. Through a combination of internal growth
and acquisitions, the Company increased its revenues from clients across a broad
range of industries. Increases in telecommunications, food services and
information technology clients

                                       12

<PAGE>

accounted for 14.6%, 12.3% and 12.3% of the revenue growth, respectively. In
addition, a new lodging client accounted for 8.7% of the increased revenue.
Approximately 25% of the increase was due to sales meetings in connection with a
triennial event held by an insurance client. The remainder of the increase in
revenue was spread among several other industries.

Gross profit. Gross profit increased 81% from $26.8 million in fiscal 1995 to
$48.5 million in fiscal 1996, primarily as a result of the revenue growth
described above. Gross profit as a percentage of revenue decreased slightly to
32.7% in fiscal 1996 from 33.1% in fiscal 1995.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $11.1 million, or 58%, from $19.3 million in

fiscal 1995 to $30.4 million in fiscal 1996. Salaries and related costs
increased $6.9 million resulting primarily from the addition of new offices and
personnel resulting from acquisitions and in support of other revenue growth, as
well as normal inflationary increases. Other general and administrative
expenses, including rent, occupancy and telephone, increased $2.6 million
resulting from the Company's overall growth. Direct selling expenses, including
commissions, advertising, travel and other costs related to obtaining business,
increased $1.6 million. Selling, general and administrative expenses as a
percentage of revenue declined from 23.8% in fiscal 1995 to 20.5% in fiscal 1996
as revenue increased more rapidly than such expenses. In fiscal 1996, the
Company also recorded a nonrecurring non-cash compensation expenses of $1.1
million resulting from 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
$0.8 million from $2.3 million in fiscal 1995 to $3.1 million in fiscal 1996.
This increase was primarily due to the purchase of computer equipment, fixed
assets acquired through acquisitions and goodwill resulting from such
acquisitions.

Interest expense. Interest expense with related parties decreased by $1.0
million from fiscal 1995 to fiscal 1996 due to the repayment and conversion of
debt as of March 15, 1996 in connection with the Company's initial public
offering. Net interest expense, decreased by $0.9 million from fiscal 1995 to
fiscal 1996 due to a lower average borrowing level, the repayment of outstanding
balances as of March 15, 1996 in connection with the Company's initial public
offering, and interest income earned on the proceeds from the initial public
offering.

Income before taxes. Income before taxes increased from $1.7 million in fiscal
1995 to $12.3 million in fiscal 1996 as revenue growth from internal business
and acquired businesses contributed to the improved earnings of the Company.

                                       13
<PAGE>

Provision for taxes. The provision for taxes as a percentage of income before
taxes was 35.0% and 15.6% for fiscal 1996 and fiscal 1995, respectively. The
increase in the effective rate is due primarily to income before tax in excess
of the utilization of available net operating loss carryforwards which are not
subject to limitations.

Net income. Net income increased to $8.0 million in fiscal 1996 from net income
of $1.4 million in fiscal 1995, for the reasons set forth in the preceding
paragraphs. Pro forma net income per common share increased in fiscal 1996 to
$0.53 from $0.25 in fiscal 1995. Excluding the effect of the nonrecurring
non-cash compensation charge of $1.1 million, pro forma 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,
                                             1995                 1996                  1997
                                       -----------------    -----------------      ----------------
<S>                                    <C>                   <C>                   <C>
Net cash provided by (used in):
     Operating activities              $           444       $        7,260        $        6,852
     Investing activities                       (7,758)             (46,204)             (128,522) 
     Financing activities                        7,255               47,077               123,145
</TABLE>

In fiscal 1995, the Company generated approximately $0.4 million from operating
activities. The expansion of operating activities and revenue growth resulted in
higher working capital requirements. Investing activities included the purchase
of property and equipment and acquisitions of intangibles and businesses that
required approximately $7.8 million. Financing activities provided approximately
$7.3 million through use of the bank facilities in place during fiscal 1995.

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 

                                       14

<PAGE>

dividends. In addition, $0.2 million was used to repurchase the Company's common
stock in fiscal 1996.

In fiscal 1997, the Company generated $6.9 million from its operating
activities. Net income plus amortization and depreciation provided $31.1
million. The net change in working capital used $24.3 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 $123.2 million, of which
$135.9 million was provided by the Company's existing banking facilities, $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.


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 to be used in connection with future
acquisitions and for working capital and general corporate purposes and a $250
million six year term loan ("the 1997 Facilities") to be utilized in connection
with the acquisition of Visual Action Holdings plc (See "--Recent
Developments). Amounts outstanding under the 1996 Facilities were repaid with
the proceeds from the 1997 Facilities. The Company will recognize an
extraordinary loss of $1.0 million in the quarter ending December 31, 1997
resulting from the write-off of the unamortized debt issuance fees relating to
the 1996 Facilities. Approximately $4.8 million in debt issuance fees were
incurred in connection with the 1997 Facilities. Such fees will be amortized
over the term of the 1997 Facilities.  The maturity date of each of the 1997
Facilities 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 currently LIBOR plus 1.125%.
The applicable interest rates will increase by 2.0% if principal or interest is
not paid when due (after applicable grace periods). As of December 12, 1997, the
Company had approximately $327.4 million outstanding under the 1997 Facilities.

Capital expenditures were $1.6 million in fiscal 1995, $2.2 million in fiscal
1996 and $17.7 million in fiscal 1997. 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, the
purchase of audio-visual rental equipment and the 

                                       15

<PAGE>

continued investment in information technology comprised the major portion of

capital expenditures.

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, 1996 and 1997. 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 1996                                  Fiscal 1997
                                        --------------------------------------------    --------------------------------------------
                                          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 ..........................    $ 20,407     $ 31,220    $ 48,150    $ 48,553    $ 52,659     $ 77,435    $103,199    $108,965
Gross profit .....................       7,066       10,190      15,576      15,701      17,830       26,085      35,377      36,200
Operating income (loss) ..........         (87)       1,576       6,556       5,832       1,770        6,903      13,670      10,699
Net income (loss) ................        (898)         643       4,408       3,836         736        3,721       8,013       5,592
</TABLE>

Recent Developments

On October 29, 1997, pursuant to an offer document dated November 1, 1997, the
("Offer Document"), the Company announced a cash offer (the "Offer") by its
wholly-owned United Kingdom subsidiary, Caribiner Services Limited, to acquire
all of the outstanding capital shares of Visual Action Holdings plc, a United
Kingdom company ("Visual Action").

Visual Action provides corporate meetings services, including audio-visual and
exhibition, and broadcast video services in the United States and the United
Kingdom. The Company has announced that it intends to dispose of Visual Action's
broadcast video services unit as soon as practicable.

On November 25, 1997, the Company declared the offer to be unconditional in all
respects, thereby committing Caribiner Services Limited to purchase all Visual
Action shares validly tendered pursuant to the Offer. As of November 24, 1997,
by means of open market purchases and shares tendered pursuant to the Offer
Document, the Company, through Caribiner Services Limited, owned or had the
obligation to acquire a total of 46,680,682 shares of Visual Action (or
approximately 93.2% of the issued shares capital). Thereafter, Caribiner
Services Limited began the process of acquiring those shares of Visual Action
not tendered pursuant to the Offer by compulsory purchases pursuant to the
provisions of the UK Companies Act of 1985. Such compulsory purchases are
expected to be completed during February 1998.

                                       16

<PAGE>

The total acquisition price for the shares is expected to be approximately
$253.0 million. In addition, the Company assumed approximately $44.3 million in
outstanding indebtedness of Visual Action. The Company expects to incur
transaction costs of approximately $3.0 million. All such costs will be financed
through the Company's 1997 Facilities.

                                       17
<PAGE>

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 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 TAVS, customers are
billed upon completion of the staging service or rental. TAVS provides audio
visual 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.

                                       18
<PAGE>


Income Taxes

     The Company's effective tax rates for fiscal 1995, fiscal 1996 and fiscal
1997 were 15.6%, 35.0% and 41.0%, respectively. In fiscal 1995, the lower
effective tax rate resulted from the utilization of federal net operating loss
("NOL") carryforwards. The increase in the effective tax rates for fiscal 1996
is due primarily to income before tax in excess of available NOL carryforwards.
The increase in the fiscal 1997 effective tax rate resulted from income before
taxes not being offset by NOLs. In future years, as in fiscal 1997, the Company
does not expect to recognize any material benefit related to the utilization of
NOL carryforwards and expects to reflect a tax rate in accordance with statutory
tax rates adjusted for book/tax differences such as non-deductible expenses.

New Accounting Pronouncements


     In February, 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share ("Statement 128"), which is required to be
adopted for the quarter ended December 31, 1997. At that time, the Company will
be required to change the method currently used to compute earnings per share
and to restate all prior periods. A dual presentation of basic and diluted
earnings per share will be required. The basic earnings per share, which will
replace primary earnings per share will exclude the dilutive effect of stock
options. The impact of Statement 128 on the calculation of the Company's primary
and fully diluted earnings per share is not expected to be material.

     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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 

         Not applicable to Company for fiscal year ended September 30, 1997.

<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, 1996 and 1997, 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,
1997. 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, 1996 and 1997 and the consolidated results of its operations and

its cash flows for each of the three years in the period ended September 30,
1997, in conformity with generally accepted accounting principles.



New York, New York
December 3, 1997

                                       19
<PAGE>

                          CARIBINER INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  September 30,
                                                                            --------------------------
                                                                              1996             1997
                                                                            ---------        ---------
                                                                              (amounts in thousands)
<S>                                                                         <C>              <C>      
                              ASSETS
Current Assets:
Cash and cash equivalents, including restricted cash of $852 in 1997        $   8,432        $  10,253
Trade accounts receivable, net of allowance for doubtful
   accounts of $305 in 1996 and $740 in 1997                                   36,202           77,780
Deferred charges                                                                8,989           10,229
Prepaid expenses and other current assets                                       3,395            9,128
                                                                            ---------        ---------
          Total Current Assets                                                 57,018          107,390
Property and equipment, net                                                    21,181           45,714
Goodwill, net                                                                  47,723          157,154
Other assets                                                                      400            3,619
                                                                            ---------        ---------
          TOTAL ASSETS                                                      $ 126,322        $ 313,877
                                                                            =========        =========
               LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank line of credit                                                         $   6,000        $      --
Current portion of long-term debt                                                 649            1,217
Trade accounts payable                                                          7,530           18,816
Accrued expenses and other current liabilities                                  8,503           23,200
Accrued production costs                                                       11,355           11,055
Taxes payable                                                                   2,158            4,726
Deferred income                                                                13,335           12,225
                                                                            ---------        ---------
          Total Current Liabilities                                            49,530           71,239
Long-term debt                                                                 16,190           60,642
Deferred income                                                                 5,007            5,617
Deferred tax liability                                                            410              715
Other liabilities                                                               1,717            4,230
                                                                            ---------        ---------
          TOTAL LIABILITIES                                                    72,854          142,443

Stockholders' Equity:
Preferred stock, $.01 par value:
2,000 shares authorized, none issued and outstanding at 1996 and 1997              --               --
Common stock, $.01 par value:
40,000 voting shares authorized, 19,197 and 23,417 shares issued
   and outstanding at 1996 and 1997, respectively                                 192              234
Additional paid-in capital                                                     59,937          159,874
Translation adjustment                                                             86               11
Retained earnings (deficit)                                                    (6,747)          11,315
                                                                            ---------        ---------
          TOTAL STOCKHOLDERS' EQUITY                                           53,468          171,434
                                                                            ---------        ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $ 126,322        $ 313,877
                                                                            =========        =========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       20

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                               Year ended September 30,
                                                        --------------------------------------
                                                                (amounts in thousands)
                                                          1995           1996           1997
                                                        --------       --------       --------
<S>                                                     <C>            <C>            <C>     
Service Revenue                                         $ 81,131       $148,330       $212,393
Rental Revenue                                                --             --        129,865
                                                        --------       --------       --------
   Total Revenue                                          81,131        148,330        342,258
                                                        --------       --------       --------
Cost of Service Revenue                                   54,312         99,797        143,002
Cost of Rental Revenue                                        --             --         83,764
                                                        --------       --------       --------
   Total Cost of Revenue                                  54,312         99,797        226,766
                                                        --------       --------       --------
Gross profit                                              26,819         48,533        115,492
Operating expenses:
     Selling, general and administrative expenses         19,306         30,442         71,270
     Non-cash compensation expense                            --          1,072             --
     Depreciation and amortization                         2,330          3,142         11,180
                                                        --------       --------       --------
Total operating expenses                                  21,636         34,656         82,450
                                                        --------       --------       --------
Operating income                                           5,183         13,877         33,042
Interest expense with related parties                      2,234          1,199             --

Other interest expense, net                                1,259            387          2,429
                                                        --------       --------       --------
Income before taxes                                        1,690         12,291         30,613
Provision for taxes                                          264          4,302         12,551
                                                        --------       --------       --------
     Net income                                         $  1,426       $  7,989       $ 18,062
                                                        ========       ========       ========
     Earnings per common share                          $   0.25       $   0.53       $   0.83
                                                        ========       ========       ========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       21

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            Year ended September 30,
                                                                     -------------------------------------------
                                                                              (amounts in thousands)
                                                                       1995             1996             1997
                                                                     ---------        ---------        ---------
<S>                                                                  <C>              <C>              <C>      
Cash flows from operating activities:
    Net income                                                       $   1,426        $   7,989        $  18,062
    Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
    Non-cash compensation expense                                           --            1,072               --
    Depreciation and amortization                                        2,330            3,142           13,082
    Change in assets and liabilities, net of amounts acquired:
        (Increase) in accounts receivable                               (6,407)          (4,520)         (19,547)
        (Increase) decrease in deferred charges                         (2,559)            (770)           1,469
        (Increase) in prepaid expenses and other
          current assets                                                  (262)            (974)          (3,928)
        Decrease (increase) in other assets                                151              443           (2,464)
        (Decrease) in accounts payable                                    (131)          (1,650)            (450)
        Increase (decrease) in deferred income                           2,875              (63)          (5,165)
        Increase in accrued expenses and other
          liabilities                                                    3,021            2,591            5,793
                                                                     ---------        ---------        ---------
        Net cash provided by operating activities                          444            7,260            6,852
                                                                     ---------        ---------        ---------
Cash flow used in investing activities:
    Purchase of property and equipment                                  (1,606)          (2,222)         (17,725)
    Acquisition of intangibles and businesses, net of cash
      acquired                                                          (6,152)         (43,982)        (110,797)
                                                                     ---------        ---------        ---------
    Net cash used in investing activities                               (7,758)         (46,204)        (128,522)

                                                                     ---------        ---------        ---------
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               --
    Net proceeds from (repayments of) bank line of credit                2,550            1,780           (6,000)
    Proceeds from long-term debt                                         6,000           18,000          135,870
    Repayments of long-term debt                                        (1,298)         (14,669)         (92,517)
    Payment of preferred dividends                                          --           (2,202)              --
    Proceeds from issuance of common stock under the
      1993 Management Stock Plan                                             5              174               --
    Repurchase of common stock                                              (2)            (177)              --
                                                                     ---------        ---------        ---------
    Net cash provided by financing activities                            7,255           47,077          123,145
                                                                     ---------        ---------        ---------
Effect of exchange rate changes on cash and cash equivalents                --               86              346
                                                                     ---------        ---------        ---------
Net (decrease) increase in cash and cash equivalents                       (59)           8,219            1,821
Cash and cash equivalents beginning of year                                272              213            8,432
                                                                     ---------        ---------        ---------
Cash and cash equivalents end of year                                $     213        $   8,432        $  10,253
                                                                     =========        =========        =========
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       22

<PAGE>


                          CARIBINER INTERNATIONAL, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                  for the Three Years Ended September 30, 1997
                             (amounts in thousands)

<TABLE>
<CAPTION>
                                                                    Common Stock                Preferred  Stock    
                                                             ------------------------       ------------------------

                                                              Shares          Amount         Shares          Amount  
                                                             --------        --------       --------        -------- 
<S>                                                          <C>             <C>            <C>             <C>      
Balance at October 1, 1994                                      4,903        $     49            450        $      5
                                                                                                                     
Repurchase of 1993 Management Stock Plan shares by the
   Company                                                        (50)              *             --              -- 
Issuance of warrants to purchase 588 shares of common
   stock                                                           --              --             --              -- 
Issuance of common stock under the 1993 Management                150               1             --              -- 
   Stock Plan
Accrued preferred stock dividends                                  --              --             --              -- 
Net income                                                         --              --             --              -- 
                                                             --------        --------       --------        -------- 


Balance at September 30, 1995                                   5,003              50            450               5 
Issuance of common stock under the 1993 Management
   Stock Plan                                                     174               2             --              -- 
Issuance of warrants to purchase 151 shares of common
   stock                                                           --              --             --              -- 
Repurchase of common stock                                        (62)              *             --              -- 
Accrued preferred stock dividends                                  --              --             --              -- 
Conversion of Convertible Note into preferred stock                --              --            600               6 
Conversion of preferred stock into common stock                 7,193              72         (1,050)            (11)
Exercise of warrants                                            1,069              11             --              -- 
Issuance of common stock upon consummation of initial
   public offering                                              5,756              57             --              -- 
Issuance of common stock upon acquisition of
   Lighthouse, Ltd.                                                64               *             --              -- 
Non-cash compensation charge                                       --              --             --              -- 
Translation adjustment                                             --              --             --              -- 
Net income                                                         --              --             --              -- 
                                                             --------        --------       --------        -------- 
Balance at September 30, 1996                                  19,197        $    192             --              -- 
Issuance of common stock under non-employee directors'
   stock plan                                                       2              --             --              -- 
Issuance of common stock upon offering                          3,744              37             --              -- 
Issuance of common stock upon acquisitions completed
   during fiscal 1997                                             474               5             --              -- 

<CAPTION>
                                                                                  Retained                        Total
                                                                 Additional       Earnings     Translation    Stockholders'
                                                             
                                                              Paid in Capital     (Deficit)     Adjustment   Equity (Deficit)
                                                              ---------------     ---------     ----------   ----------------
<S>                                                           <C>                 <C>           <C>          <C>             
Balance at October 1, 1994                                        $  1,878        ($15,180)             --       ($13,248)
                                                                                                                        
Repurchase of 1993 Management Stock Plan shares by the
   Company                                                              (2)             --              --             (2)
Issuance of warrants to purchase 588 shares of common
   stock                                                                40              --              --             40
Issuance of common stock under the 1993 Management                       5              --              --              6
   Stock Plan
Accrued preferred stock dividends                                       --            (655)             --           (655)
Net income                                                              --           1,426              --          1,426
                                                                  --------        --------        --------       --------

Balance at September 30, 1995                                        1,921         (14,409)             --        (12,433)
Issuance of common stock under the 1993 Management
   Stock Plan                                                          172              --              --            174
Issuance of warrants to purchase 151 shares of common
   stock                                                                79              --              --             79
Repurchase of common stock                                            (177)             --              --           (177)
Accrued preferred stock dividends                                       --            (327)             --           (328)
Conversion of Convertible Note into preferred stock                 11,979              --              --         11,985
Conversion of preferred stock into common stock                        (46)             --              --             15

Exercise of warrants                                                 1,680              --              --          1,691
Issuance of common stock upon consummation of initial
   public offering                                                  42,257              --              --         42,315
Issuance of common stock upon acquisition of
   Lighthouse, Ltd.                                                  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                                       59,937          (6,747)             86         53,468
Issuance of common stock under non-employee directors'
   stock plan                                                           37              --              --             37
Issuance of common stock upon offering                              85,754              --              --         85,791
Issuance of common stock upon acquisitions completed
   during fiscal 1997                                               14,146              --              --         14,151
</TABLE>

*Less than $1 thousand

                                       23

<PAGE>

                          CARIBINER INTERNATIONAL, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                  for the Three Years Ended September 30, 1997
                             (amounts in thousands)

<TABLE>
<CAPTION>
                                          Common Stock                   Preferred Stock      
                                     ------------------------        ------------------------ 
                                      Shares          Amount          Shares          Amount  
                                     --------        --------        --------        -------- 
<S>                                  <C>             <C>             <C>             <C>

Translation adjustment                     --              --              --              -- 
Net income                                 --              --              --              -- 
                                    ========================================================= 
Balance at September 30, 1997          23,417       $     234              --       $      -- 
                                    ========================================================= 

<CAPTION>
                                                      Retained                         Total
                                      Additional      Earnings       Translation     Stockholders'
                                    Paid in Capital   (Deficit)      Adjustment    Equity (Deficit)
                                    ---------------   ---------      ----------    ----------------
<S>                                 <C>               <C>            <C>           <C>           
Translation adjustment                        --              --             (75)             (75)
Net income                                    --          18,062              --           18,062
                                    ================================================================================
Balance at September 30, 1997          $ 159,874       $  11,315       $      11        $ 171,434
                                    ================================================================================
</TABLE>


*Less than $1 thousand

        See accompanying notes to the consolidated financial statements.

                                       24
<PAGE>


                          CARIBINER INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   THE COMPANY

     Caribiner International, Inc., (the "Company") is engaged in the production
of meetings, events and training programs, a provider of audio visual 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 $12 million principal amount of the
Company's 11.5% Convertible Promissory Note (the "Convertible Note") and $4
million Cumulative Redeemable Convertible Voting Preferred Stock, par value $.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. Immediately prior to the initial Public Offering, the
Convertible Note was converted into 0.6 million shares of Preferred Stock, which
were then immediately converted into 2.1 million shares of the Company's Common
Stock. Upon consumption of the Initial Public Offering, accrued interest of $6.3
million relating to the Convertible Note was paid to Warburg. In addition,
Warburg exercised its warrants to purchase 1.1 million shares of common stock at
a weighted average exercise price of $3.16.

     Subsequently, in March, 1997, the Company consummated an offering of 4.1
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 September 30, 1996
consolidated balance sheet to conform to the current year's presentation.

   Revenue Recognition

     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 which is often 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.

                                       25

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

   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.

   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 3,
Business Acquisitions, 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, 1997, the Company held $0.9 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 25 years. Accumulated amortization of goodwill
was $2.6 million and $6.8 million at September 30, 1996 and 1997, 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, 1995, 1996 and 1997 were $0.2 million,
$0.2 million and $0.3 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

                                       26

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

operations. There were no transaction gains or losses in the year ended
September 30, 1995. Transaction gains or losses in the years ended September 30,
1996 and 1997 were not significant.

   Foreign Operations

     The Company's foreign operations, which are predominantly located in the 
United Kingdom, had identifiable assets, including goodwill, of $55.4 million

at September 30, 1997. The revenue and operating profit of the Company's foreign
operations included in the results of operations for the year ended September
30, 1997 were $52.8 million and $1.5 million, respectively. The Company's
foreign operations during the years ended September 30, 1995 and 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.

   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 February, 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share ("Statement 128"), which is required to be
adopted on December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. A dual presentation of basic and diluted earnings per share
will be required. The basic earnings per share, which will replace primary
earnings per share, will exclude the dilutive effect of stock options. The
impact of Statement 128 on the calculation of the Company's primary and fully
diluted earnings per share is not expected to be material.

     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.  BUSINESS ACQUISITIONS

     During fiscal 1996 and fiscal 1997, 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 1996 Acquisitions

     In January, 1996, the Company acquired substantially all of the assets of
Koors Perry & Associates, Inc. ("Koors Perry") for $4.8 million including the

issuance of a promissory note of $1.5 million as partial consideration. In
connection with the acquisition of Koors Perry, contingent payments were to be
made in each of the three years following the consummation of the transaction
based upon the achievement of certain performance goals. The contingent payments
relating to the years ending September 30, 1996 and 1997 have been paid and/or
accrued and have been appropriately treated as additional purchase price. In
November, 1997, the Company settled the contingent payment relating to the year
ending September 30, 1998 by granting the former sellers of Koors Perry
aggregate consideration of approximately $1.7 million, which consists of cash of
$1.2 million payable in March, 1999 and the issuance of 10,920 shares of the
Company's common stock having a fair market value of $0.5 million. The
settlement, which is accounted for as additional purchase price, has been
reflected as additional goodwill in the accompanying balance sheet at 
September 30, 1997.

                                       27

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     In June, 1996, the Company acquired substantially all of the assets and
assumed certain of the liabilities of Lighthouse, Ltd. for $7.3 million, which
consisted of cash and the issuance of 63,642 shares of the Company's Common
Stock having a value of $1.0 million.

     Also in June, 1996, the Company acquired SCH International Limited
("Spectrum") for $5.1 million, a London-based communications services company.
In connection with the acquisition of Spectrum, contingent payments were to be
made in each of three years following the closing of the transaction, based upon
the achievement of certain performance goals. Such contingent payments would be
accounted for as additional purchase price as they became known. In July, 1997,
the Company settled all future contingent payments by granting to the sellers of
Spectrum aggregate consideration consisting of approximately $8.8 million in
cash and the issuance of 10,152 shares of the Company's Common Stock having a
fair market value of approximately $0.3 million. The settlement was accounted
for as additional purchase price.

     In September, 1996, the Company completed its acquisition of Total Audio
Visual Services ("TAVS"), a leading provider of audio visual equipment rentals,
sales and related staging services, including hotel audio visual outsourcing
services, for $26.6 million.

     Except for the promissory note and the Common Stock issuance described
above, these transactions were financed through a combination of cash and bank
borrowings.

   Fiscal 1997 Acquisitions

     In December, 1996, the Company acquired all of the outstanding capital
stock of Rome Network, Inc. ("Rome"), a regional producer of meetings and events
headquartered in San Francisco, for aggregate consideration of $3.2 million,

which consisted of approximately $2.4 million in cash and the issuance of 30,990
shares of the Company's common stock having a fair market value of approximately
$0.8 million.

     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 audio visual 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 audio visual equipment rentals, sales and related staging services,
including hotel audio visual equipment rentals, sales and related staging
services, including hotel audio visual 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.

     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 May, 1997, the Company acquired substantially all of the assets of
Wavelength Corporate Communications Pty Limited ("Wavelength"), a provider of
business communications services in Australia and New Zealand, for aggregate

                                       28

<PAGE>


                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

consideration of approximately $2.0 million, which consisted of $1.9 million in
cash and the issuance of 2,998 shares of the Company's common stock having a
fair market value of approximately $0.1 million.

     Also in May, 1997, the Company acquired all of the outstanding capital
stock of Watts/Silverstein, Inc. ("Watts/Silverstein"), a Seattle-based business
communications company. The Company paid approximately $4.1 million in cash,
which included the repayment at closing of approximately $0.7 million in
outstanding indebtedness of Watts/Silverstein, and the issuance of 30,826 shares

of the Company's common stock having a fair market value of approximately $0.9
million.

     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 Audio Visual, Inc. ("Bauer"), a provider of audio visual equipment rentals
and audio visual 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.

     Also, in July, 1997, the Company acquired all of the outstanding capital
stock of Envision corporation ("Envision"), a Boston-based business
communications services provider. Consideration paid for the acquisition was
$5.6 million in cash and the issuance of 42,372 shares of the Company's common
stock having a fair market value of approximately $1.5 million.

     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.

                                       29

     The accounting for these 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 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, 1995, 1996 and 1997, $1.8 million, $1.4 million and $2.1 million,
respectively, were paid and/or accrued as additional consideration with respect
to these acquisitions for such fiscal years.

     The following unaudited consolidated pro forma results of operations of the
Company for the years ended September 30, 1996 and 1997 give effect to the
following transactions as if they occurred on October 1, 1995: (i) the
acquisitions of Lighthouse, Ltd., Spectrum, TAVS, Projexions, Blumberg, Show
Solutions, WCT and Bauer (ii) decreased interest expense and preferred stock
dividends resulting from the repayment of substantially all outstanding bank
borrowings and other long-term indebtedness of the Company from proceeds of the
Company's Initial Public Offering and (iii) the repayment with the proceeds of
the initial public offering and the offering of common stock completed in March

1997 of the bank borrowings that would have been incurred in connection with the
acquisitions of Lighthouse, Spectrum, TAVS, Projexions and Blumberg as if such
acquisitions had occurred on October 1, 1995. The effect of the acquisitions of
Koors Perry, Rome, Wavelength, Watts Silverstein and Envision on the Company's
results of operations for the year ended September 30, 1996 and 1997 is
insignificant.

                                                          Year ended
                                                         September 30,
                                                 ------------------------------
                                                    1996              1997
                                                 ------------     -------------
                                                         (in millions,
                                                    except per share data)
Revenue  .....................................   $  370.0         $  439.2
Income before taxes...........................       18.2             30.2
Net income....................................       11.1             17.5
Pro forma net income per common share.........   $   0.51         $   0.76

     The above calculation of pro forma net income per common share assumes that
approximately 21,880,000 million and 23,065,000 million shares were outstanding
during 1996 and 1997, 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 been made at the beginning of fiscal 1996 or of results which may
occur in the future.

                                       30
<PAGE>
   Subsequent Event

     On October 29, 1997, pursuant to an offer document dated November 1, 1997,
the ("Offer Document"), the company announced a cash offer (the "Offer") by its
wholly-owned United Kingdom subsidiary, Caribiner Services Limited, to acquire
all of the outstanding capital shares of Visual Action Holdings plc, a United
Kingdom company ("Visual Action").

     Visual Action provides corporate meeting service, including audio-visual
and exhibition, and broadcast video services in the United States and the United
Kingdom. The Company has announced that it intends to dispose of Visual Action's
broadcast video services unit as soon as practicable.

     On November 25, 1997, the Company declared the offer to be unconditional in
all respects, thereby committing Caribiner Services Limited to purchase all
shares of Visual Action validly tendered pursuant to the Offer. As of November
24, 1997, by means of open market purchases and shares tendered pursuant to the
Offer Document, the Company, through Caribiner Services Limited, owned or had
the obligation to acquire a total of 46,680,682 shares of Visual Action (or
approximately 93.2% of the issued shares capital). Thereafter, Caribiner
Services Limited began the process of acquiring those shares of Visual Action
not tendered pursuant to the Offer by compulsory purchases pursuant to the
provisions of the UK Companies Act of 1985. Such compulsory purchases are
expected to be completed during February 1998.



                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The total acquisition price for the shares is expected to be approximately
$253.0 million. In addition, the Company assumed approximately $44.3 million  in
outstanding indebtedness of Visual Action. The Company expects to incur
transaction costs of approximately $3.0 million. All such costs will be financed
through the Company's bank facilities. (See Note 5.)

     Assuming the acquisition of Visual Action had occurred on October 1, 1996,
revenue calculated on a pro forma basis for the Company would have been $610.7
million for the year ended September 30, 1997.

4.   PROPERTY AND EQUIPMENT

     At September 30, 1996 and 1997 property and equipment consisted of:

                                                         At September 30,
                                                      ---------------------
                                                        1996         1997
                                                         (in thousands)
                                                      ---------------------
Audio visual rental and production equipment          $15,468       $32,644
Furniture and fixtures                                  4,180         8,208
Information systems                                     3,924        12,077
Leasehold improvements                                  2,782         5,447
Other                                                     705         1,658
                                                      -------       -------
                                                       27,059        60,034
Less--accumulated depreciation and amortization         5,878        14,320
                                                      -------       -------
                                                      $21,181       $45,714
                                                      =======       =======

     The related depreciation and amortization expense for the years ended
September 30, 1996 and 1997 was $2.1 million and $8.5 million, respectively.

5.   DEBT

     At September 30, 1996 and 1997, long-term debt consisted of:

                                                         At September 30,
                                                      ---------------------
                                                        1996         1997
                                                          (in thousands)
                                                      ---------------------
Bank term loan                                        $15,000       $58,800
Notes payable                                           1,243         2,294
Other                                                     596           765
                                                      -------       -------
                                                       16,839        61,859

Less--current portion of long-term debt                   649         1,217
                                                      -------       -------
                                                      $16,190       $60,642
                                                      =======       =======

     At September 30, 1997, the carrying amount of the above commitments
approximated fair value.

     The aggregate payments of long-term debt outstanding at September 30, 1997,
for the next five years, are as follows: 1998--$1.2 million; 1999--$0.6
million; 2000--$0.3 million; 2001--$0.3 million; and 2002--$0.1 million;
thereafter--$59.4 million; totaling $61.9 million.

     At September 30, 1996, $6.0 million was outstanding under the Company's
former line of credit and $15.0 million was outstanding under the former term
facility. As of September 30, 1996, each of the line of credit and the term
facility bore interest at the rate of 9.25% per annum which was 1% over the
lender's prime rate. On December 4, 1996, 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 $27 million to $100 million consisting
of a, $75 million reducing revolving credit facility 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 then existing
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, accrued interest at either (i) LIBOR plus an
applicable margin or (ii) an alternate base rate based on the

                                       31

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 applicable rates
would increase by 2.0% if principal or interest was not paid when due (after
applicable grace periods). 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. At September 30, 1997, 
outstanding debt bore interest at a weighted average rate of 7.2%.

     In connection with the acquisition of Koors Perry, a non-interest bearing
promissory note for $1.5 million, which was payable over three years, was 
issued as partial consideration of the purchase price. At September 30, 1996 and
1997, approximately $1.2 million and $0.8 million was included in long-term debt
representing the present value of such promissory note.

     Subsequent Event


     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 and a $250 million six year term loan
(the "1997 Facilities") which were utilized in connection with the acquisition
of Visual Action Holdings plc. (Note 3, Business Acquisitions). Amounts
outstanding under the 1996 Facilities were repaid with the proceeds from the
1997 Facilities. An extraordinary loss of $0.9 million will be recognized in the
quarter ending December 31, 1997 relating to the write-off of the unamortized
debt issuance fees relating to the 1996 Facilities. The maturity date of each of
the 1997 Facilities 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 currently LIBOR plus
1.125%. The applicable interest rates will increase by 2.0% if principal or
interest is not paid when due (after applicable grace periods).

6.   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 $.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 thousand 
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.

                                       32

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     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
728,000 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. Options vest over a period of three
years from the grant date. As of September 30, 1997, stock options to purchase
an aggregate of 718,900 shares of Common Stock were outstanding, of which
options to purchase 116,974 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.

<PAGE>

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

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 for fiscal
1996 and $675,000 or $0.03 per share for fiscal 1997 after accounting for
stock-based compensation effective for awards made after October 1, 1995 and
thereafter.

A summary of the status of the Company's Option Plan at September 30, 1997 and
activity during the years ended September 30, 1997 is as follows:

                                       1996                    1997
                                          Weighted                Weighted
                                          average                  average
(in thousands of shares)       Shares  exercise price  Shares   exercise price 
-------------------------------------------------------------------------------

Outstanding at beginning of      
   year                          --         --          303        $14.75
Options granted                 303       14.75         461         28.38
Options exercised                --         --
Options forfeited/expired        --         --          (27)        16.14
Options outstanding
   at end of year               303       14.75         737         23.22
                              _______    ________    ________     ________
Exercisable at end 
   of year                        3       20.19         110         15.84
                              _______    ________    ________     ________

Weighted average fair
   value of options 
   granted during 
   the year                                6.08                     10.67
                                         ________                 ________


<PAGE>

A summary of information about stock options outstanding and options exercisable
at September 30, 1997 is as follows (in thousands of shares):

                             Options Outstanding            Options Exercisable
-------------------------------------------------------------------------------
                                    Weighted     Weighted             Weighted
                                     Average      Average              Average
Range of exercise                   Remaining    Exercise             Exercise
  prices              Shares          Term         Price    Shares      Price 
-------------------------------------------------------------------------------
$12.84 to $14.44        265            8.82       $14.41      88        $14.41

$20.19 to $29.28        284            9.35       $22.82      22        $21.58

$31.75 to $40.188       188            9.84       $36.22      --         --

$12.84 to $40.188       737            9.29       $20.86      --         --


7.   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,
1995, 1996 and 1997, the Company paid such vendors approximately $1.3 million,
$1.6 million and $0.6 million respectively.

     Rent paid to related parties during the years ending September 30, 1996 and
1997 was $0.1 million and $0.6 million, respectively. No rent was paid to
related parties during the year ended September 30, 1995.


8.   EMPLOYEE BENEFIT PLAN

     The Company maintains a defined contribution plan of the profit sharing
type, covering all qualified employees. Company contributions to the plan each
year are based on net income and are at the discretion of the Board of
Directors. There were no Company contributions for fiscal 1995 and fiscal 1996. 
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 Code of
1986, as amended). Company matching contributions during the year ending
September 30, 1997 totaled $0.1 million.

9.   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. Differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and income tax purposes 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.

                                       33

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Significant components of the Company's deferred tax assets and liabilities
as of September 30, 1996 and September 30, 1997 are as follows:

                                                          1996         1997
                                                         -------      -------
                                                            (in thousands)
                                                         --------------------
     Deferred tax assets:
         NOL and tax credit carryforwards                $ 1,410      $   973
         Amortization of intangibles                         192           --

         Allowance for doubtful accounts                     128          155
         Other reserves                                      187        1,654
                                                         -------      -------
              Total deferred tax assets                    1,917        2,782
         Valuation allowance                              (1,317)        (672)
                                                         -------      -------
     Net deferred tax assets                             $   600      $ 2,110
                                                         -------      -------
     Deferred tax liabilities:
         Tax over book depreciation and amortization         985        1,899
         Amortization of intangibles                          --          890
         Other                                                25           36
                                                         -------      -------
              Total deferred tax liabilities             $ 1,010      $ 2,825
                                                         -------      -------
     Net deferred tax liability                          $   410      $   715
                                                         -------      -------

     At September 30, 1997, 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, 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:

                                        1995           1996           1997
                                      --------       --------       --------
                                                  (in thousands)
                                                  --------------   
     Current:
        Federal                       $     42       $  2,121       $  7,224
        State                              222          1,736          2,150
        Foreign                             --             35          1,112
                                      --------       --------       --------
             Total current tax             264          3,892         10,486

     Deferred:
        Federal                             --            281          1,758
        State                               --            129            352
        Foreign                             --             --            (45)
 
                                      --------       --------       --------
             Total deferred tax             --            410          2,065
                                      --------       --------       --------
     
     Total provision for taxes        $    264       $  4,302       $ 12,551 
                                      ========       ========       ========


                                       34

<PAGE>


                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     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>
                                                        1995            1996            1997
                                                      --------        --------        --------
                                                                   (in thousands)
                                                                   --------------   
<S>                                                   <C>             <C>             <C>     
        Tax expense at statutory rate                 $    575        $  4,302        $ 10,714
        State income tax net of federal benefit            147           1,212           1,626
        Non-cash compensation expense                       --             375              --
        Non-deductible expenses                            163             264             596
        Change in valuation allowance                     (900)         (2,012)           (645)
        Other                                              279             161             260
                                                      --------        --------        --------
                                                      $    264        $  4,302        $ 12,551
                                                      ========        ========        ========
</TABLE>



10.   MAJOR CUSTOMERS

      Revenue from two customers in the automotive and information technology 
industries aggregated 34% and 16%, respectively, in fiscal 1995 and 15% and 13%,
respectively, in 1996. Revenue from a customer in the insurance industry
aggregated 11% in fiscal 1996. There was no revenue from this customer in 1995.
Amounts due from the two customers in the automotive and information technology
industries represented 46% and 17%, respectively, at September 30, 1995, and 24%
and 10%, respectively, at September 30, 1996, of accounts receivable. Amounts
due from the customer in the insurance industry represented 5% of accounts
receivable at September 30, 1996. In fiscal 1997, 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.

11.   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: 1998--$5.0 million; 1999--$4.3
million; 2000--$3.4 million; 2001--$2.4 million; 2002 -- $1.5 million;
thereafter--$7.9 million; totaling $24.5 million.

     Rent expense charged to operations in fiscal 1995, fiscal 1996 and fiscal
1997 was $2.0 million, $2.7 million, and $6.6 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.


12.   SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     Interest paid was $0.8 million, $7.9 million and $2.0 million during the
years ended September 30, 1995, 1996 and 1997, respectively. Taxes paid were
$0.3 million, $2.1 million and $8.1 million during the years ended September 30,
1995, 1996 and 1997, respectively.

                                       35

<PAGE>

                          CARIBINER INTERNATIONAL, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.   EARNINGS PER COMMON SHARE

     The weighted average number of shares of common stock outstanding during
the years ended September 30, 1995, 1996 and 1997, is 13,240,006, 16,490,214 and
21,719,333 respectively.

     Earnings per common share for the years ended September 30, 1995 and 1996

has been computed on a pro forma basis assuming conversion of the convertible
note and all outstanding shares of preferred stock into common stock (which, in
each case, occurred on March 15, 1996 immediately prior to the Company's initial
public offering) as if such conversions occurred on October 1, 1995. The pro
forma earnings per share reflects adjustments to eliminate the interest expense
incurred on the convertible note and to eliminate accrued preferred stock
dividends. Pursuant to the requirements of the Securities and Exchange
Commission, common stock issued under the 1993 Management Stock Plan and
warrants to purchase common stock issued at prices below the initial public
offering price per share during the twelve months immediately preceding the date
of the initial filing of the Company's Registration Statement on Form S-1
(registration no. 33-80481) have also been included in the calculation of common
shares, using the treasury stock method, as if they were outstanding for the
years ended September 30, 1995 and 1996.

     Of the net proceeds from the sale of shares of common stock offered by the
Company in its public offering completed in March, 1997, approximately $64.5
million were used to repay aggregate outstanding bank borrowings. Assuming the
issuance and sale of only that number of shares of common stock which would have
generated net proceeds sufficient to repay indebtedness of $64.5 million, and
assuming that such indebtedness had been repaid as of October 1, 1996,
supplementary pro forma net income per share would have been $0.85. For purposes
of this computation, the weighted average number of shares of common stock
outstanding during the 22,845,000.

     Of the net proceeds from the sale of shares of common stock offered by the
Company in the initial public offering completed in March, 1996, approximately
$25.6 million were used to repay aggregate outstanding bank borrowings and other
long-term indebtedness, including accrued interest, and preferred stock
dividends. Assuming the issuance and sale of only that number of shares of
common stock which would have generated net proceeds sufficient to repay
indebtedness of $25.6 million, and assuming that such indebtedness had been
repaid as of October 1, 1995, supplementary pro forma net income per share would
have been $0.53 for the year ended September 30, 1996. For purposes of this
computation, the weighted average number of shares of common stock outstanding
during the year ended September 30, 1996 is 17,939,568.

                                       36


<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

          The Company filed the following reports on Form 8-K (i) during the
     three months ended September 30, 1997 and (ii) since October 1, 1997
     through the date hereof:

Date of Filing        Items Reported                 Subject of Report
--------------        --------------          ----------------------------------
July 18, 1997             2, 7                Announcing the completion of the 
                                              acquisition of Bauer
                                            
August 25, 1997              7                Form 8-K/A containing financial
                                              information in connection with the
                                              acquisition of Bauer
                                            
December 9, 1997          2, 7                Announcing the completion of the 
                                              acquisition of VAH
                                            
(c)  Reference is made to Item 14(a)(3) above.

(d)  REference is made to Item 14(a)(2) above.


                                       37

<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 22, 1997.


                                  CARIBINER INTERNATIONAL, INC.
                                  (Registrant)
                                                               
                                  By: /S/ ARTHUR F. DIGNAM
                                     -------------------------------------------
                                     Name:  Arthur F. Dignam
                                     Title: Executive Vice President, Chief 
                                            Financial and Administrative 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, Chief                        December 22, 1997
-------------------------------------           Executive Officer and Director
          Raymond S. Ingleby                    (Principal Executive Officer)
                                             
                                             
         /S/ ARTHUR F. DIGNAM                 Executive Vice President, Chief                     December 22, 1997
-------------------------------------           Financial and Administrative
           Arthur F. Dignam                     Officer (Principal Financial and
                                                Accounting Officer)
                                             
                                             
           /S/ ERROL M. COOK                  Director                                            December 22, 1997
-------------------------------------        
             Errol M. Cook                   
                                             

         /S/ BRYAN D. LANGTON                 Director                                            December 22, 1997
-------------------------------------        
           Bryan D. Langton                  

                                             
          /S/ SIDNEY LAPIDUS                  Director                                            December 22, 1997
-------------------------------------        
            Sidney Lapidus                   
                                             

                                             
         /S/ DAVID E. LIBOWITZ                Director                                            December 22, 1997
-------------------------------------        
           David E. Libowitz                 
                                             
                                             
                                      
     /S/ C. ANTHONY WAINWRIGHT               Director                                             December 22, 1997
-------------------------------------        
        C. Anthony Wainwright
</TABLE>


                                       S-1

<PAGE>
                                INDEX TO EXHIBITS

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

Exhibit
 Number                       Description of Document
-------                       -----------------------
2.1     Agreement of Purchase and Sale of Stock, dated December 19, 1996, by and
        among the Company, Blumberg Communications, Inc. and each of the
        Stockholders listed on schedule A thereto (schedules omitted--the
        Company agrees to furnish a copy of any schedule to the Commission upon
        request) (filed as Exhibit 2.1 to the Company's Current Report on Form
        8-K filed with the Commission on February 12, 1997 and incorporated
        herein by reference)

2.2     Agreement of Purchase and Sale of Assets, dated January 8, 1997, by and
        among the Company, Video Supply Company, Inc., Projections/Video Supply
        Company and Robert Haney (schedules omitted--the Company agrees to
        furnish a copy of any schedule to the Commission upon request) (filed as
        Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the
        Commission on January 24, 1997 and incorporated herein by reference)

2.3     Agreement of Purchase and Sale of Stock, dated May 29, 1997, by and
        among the Company, Bauer Audio Visual, Inc. and each of the Stockholders
        listed on schedule A thereto (schedules omitted--the Company agrees to
        furnish a copy of any schedule to the Commission upon request) (filed as
        Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the
        Commission on July 18, 1997 and incorporated herein by reference)

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 three
        months ended March 31, 1996 and incorporated herein by reference)

3.2     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 (filed as an exhibit to the
        Company's Registration Statement on Form S-1 (Registration No. 33-80481)
        and incorporated herein by reference)

+10.2   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
        Form 10-K for the fiscal year ended September 30, 1996 and incorporated
        herein by reference)

+10.3   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)

+10.4   Employment Agreement, dated as of October 1, 1995, between the Company
        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)

<PAGE>

+10.5   Employment Agreement, dated as of December 1, 1995, between the Company
        and Arthur F. Dignam (filed as an exhibit to the Company's Registration
        Statement on Form S-1 (Registration No. 33-80481) and incorporated
        herein by reference)

+10.6   Employment Agreement, dated as of December 1, 1995, 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)

+10.7   Employment Agreement, dated as of July 25, 1995, 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)

+10.8   Employment Agreement, dated October 14, 1996, between the Company and
        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)

+10.9   Employment Agreement, dated September 22, 1997, between the Company and
        Richard H. Vent

10.10   Credit Agreement, dated as of October 28, 1997, 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 omitted--the Company agrees
        to furnish a copy of any schedule to the Commission upon request)

10.11   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)

11.1    Statement Regarding Computation of Earnings Per Common Share

11.2    Statement Regarding Computation of Supplementary Pro Forma Income Per
        Common Share

21      Subsidiaries of the Company

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).