<PAGE>

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

              /x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended September 30, 1999

                                       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 -14234

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

                         CARIBINER INTERNATIONAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                       <C>
                        DELAWARE                                                 13-3466655
              (STATE OR OTHER JURISDICTION                                    (I.R.S. EMPLOYER
           OF INCORPORATION OR ORGANIZATION)                                IDENTIFICATION NO.)

           16 WEST 61ST STREET, NEW YORK, NY                                       10023
        (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                 (ZIP CODE)
</TABLE>

                                 (212) 541-5300
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<S>                                                       <C>
                  TITLE OF EACH CLASS                               NAME OF EXCHANGE ON WHICH REGISTERED
--------------------------------------------------------  --------------------------------------------------------
        Common Stock, par value $0.01 per share                           New York Stock Exchange
</TABLE>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      None
                                (Title of Class)

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

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

     As of December 27, 1999, the aggregate market value of voting stock held by
non-affiliates of the registrant was $93,244,026.

     As of December 27, 1999, the registrant had 23,696,727 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 2000 Annual Meeting of Stockholders (the
    "Proxy Statement") are incorporated by reference into Part III hereof.

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

<PAGE>

                                     PART I

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

ITEM 1. BUSINESS

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

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

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

SERVICES

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

<PAGE>

     Specifically, Caribiner's services include:

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

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

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

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

          Training centers operated by the Company on behalf of clients who use
     such centers to train customers in the use of their products.

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

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

CLIENTS

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

     Caribiner Communications' clients include ARAMARK, Ford Motor Co., Home
Depot, IBM, McDonald's Corporation, Parke-Davis (a division of Warner Lambert)
and Pfizer, Inc.

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

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

     Among the ways the Company seeks to differentiate itself to clients from
other providers of business communications and corporate meeting services are by
its customer service, its breadth of creative and technical

                                       2

<PAGE>

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
employs a full-time sales and marketing staff and has dedicated a group of sales
and marketing executives to identify potential client relationship opportunities
and promote Caribiner's expertise and range of services. Generally, account
managers are assigned a number of different accounts which may be comprised of a
number of businesses or a number of divisions, departments or groups within the
same business.

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

OPERATIONS

     Communications Division. The Communications division maintains local
offices throughout the United States within those metropolitan areas where there
tend to be a high concentration of the Company's clients. Each office is run by
a general manager, who is supported by sales executives (the account managers)
who establish and foster customer relationships; creative and technical
personnel who direct concept development; and producers and project managers who
have ultimate responsibility for project execution, media creation and, if
relevant to the project, theatrical staging of an event.

     The Communications division also maintains full service operations in the
United Kingdom, Hong Kong, Australia and New Zealand. Such offices are staffed
in a similar manner to the division's North American offices.

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

     The Company's staging and meeting services services division, which is
based in Los Angeles, provides staging services and audiovisual equipment
rentals to corporate clients, production companies, trade associations and other
business communications services companies that require such services. The
Company's rental services division, which is based in Atlanta, provides
audiovisual equipment rentals to convention centers and corporate clients,
generally on a "drop-off" basis. Each of the staging and meeting services and
rental services divisions maintains regional inventory support and sales offices
in various locations throughout the U.S.

                                       3

<PAGE>

     Melville Exhibition Services.  MES, which is based in Birmingham, England,
provides exhibition services, including the rental of stand fittings, furniture,
floor coverings and floral displays and electrical contracting and visitor
registration services to exhibition and trade show organizers and conference and
convention centers.

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

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

EMPLOYEES

     As of October 31, 1999, Caribiner employed approximately 3,675 full-time
employees, of which 3,055 employees were located domestically and 620 were
located internationally.

     Except for 34 employees of the Company's hotel audiovisual outsourcing
subdivision of the AV operations, whose terms of employment are covered by a
collective bargaining agreement with a union, the Company has no full-time
employees whose employment is covered by collective bargaining or similar
agreements with unions; however, the Company and its subsidiaries do from time
to time independently contract with or hire part-time union personnel,
especially during the production of a particular meeting or event, and,
accordingly, the Company and/or its subsidiaries, is a party to certain
agreements with unions governing the hiring and terms of employment of such
personnel. Over the course of any given project period, the Company evaluates
the production personnel requirements and determines the extent to which it must
supplement its available employee base with the use of freelance contractors or
part-time employees. Depending on the timing and specific requirements of the
events and the number of overlapping events in any given planning period, the
use of freelance contractors and part-time employees can vary significantly. The
Company considers its relations with its full-time employees, part-time
employees and independent contractors to be good.

COMPETITION

     Although no firm data exists with respect to the size of the business
communications, audiovisual equipment rental 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 the competitive factors most important in the
business communications, audiovisual equipment rental and meeting services
industry are organizational breadth, creative, production and technical
expertise, demonstrated ability to execute projects, range of services offered,
range of industries serviced, size, geographical presence and price.

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

SEASONALITY

     The Company experiences quarterly variations in revenue, operating income
and net income as a result of many factors, including the timing of clients'
meetings and events, delays in or cancellation of clients' product launches and
events, as well as changes in the Company's revenue mix among its various
services offered.

                                       4

<PAGE>

Historically, the Company's business has tended to be slower in the first
quarter of its fiscal year mainly due to the Thanksgiving and Christmas holidays
when clients and hotel guests traditionally stage fewer meetings and events.

ITEM 2. PROPERTIES

     Caribiner's corporate headquarters and the New York office of the
Communications division are located in leased offices occupying approximately
40,000 square feet at 16 West 61st Street, New York, New York 10023-7604. The
lease for this space expires on May 31, 2000.

     The Company has entered into a lease for new office space located at 498
Seventh Avenue, New York, New York 10018. The lease calls for the Company to
occupy approximately 50,000 square feet of space initially, with an option to
occupy additional space in the future. The lease will expire in 2015. The
Company expects to relocate the headquarters of its Communications Division and
the New York office of such division to such new space in early 2000.
Alternatives are presently being considered for the relocation of the Company's
corporate headquarters.

     The Company also leases offices and warehouse space in cities throughout
the United States, as well as in London, Sydney, Melbourne, Brisbane, Auckland,
Wellington, Glasgow and Hong Kong. The Company believes that, to the extent
required, suitable additional or alternative space necessary for its operations
will be available as needed.

ITEM 3. LEGAL PROCEEDINGS

     On March 25, 1999, a purported shareholder class action was filed
in the United States District Court for the Southern District of New York (the
"Southern District") against the Company and certain of its current and former
officers and one of its directors. On May 7, 1999, a purported shareholder class
action substantially identical to the March 25th action was filed in the
Southern District against the Company and the same individuals named in the
March 25th action. Both lawsuits allege, among other things, that defendants
misrepresented the Company's ability to integrate various companies it was
acquiring and alleges violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and various rules promulgated thereunder. The lawsuits seek
unspecified money damages, plus costs and expenses, including attorneys' fees
and expert fees. The Company believes it has meritorious defenses to this action
and intends to defend the lawsuit vigorously. In November, 1999, the court
issued an order consolidating the lawsuits into a single action and appointing
lead plaintiffs and by the plaintiffs lead counsel. It is anticipated that an
amended consolidated complaint will be filed in early 2000.

     In addition to the litigation described above, from time to time the
Company is a party to various legal proceedings incidental to its business.
Although the ultimate disposition of these proceedings is not determinable, in
the opinion of the Company, none of such proceedings 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.

                                       5

<PAGE>

ITEM 4A. EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY

<TABLE>
<CAPTION>
NAME                                   AGE                            POSITION
------------------------------------   ---   -----------------------------------------------------------
<S>                                    <C>   <C>
Christopher A. Sinclair.............   49    Chairman of the Board, President and Chief Executive
                                               Officer of Caribiner International, Inc.

Robert F. Burlinson.................   60    Executive Vice President and Chief Financial Officer of
                                               Caribiner International, Inc.

Richard R. Gros.....................   45    Executive Vice President, Human Resources of Caribiner
                                               International, Inc.

Brian Shepherd......................   42    Executive Vice President of Caribiner International, Inc.
                                               and Chief Executive Officer of Caribiner Communications

John C. Voaden......................   49    Executive Vice President of Caribiner International, Inc.
                                               and Chief Executive Officer of Hospitality Resources
                                               Division

Raymond S. Ingleby..................   36    Vice Chairman of the Board of Caribiner International, Inc.

Errol M. Cook.......................   60    Director

Bryan D. Langton....................   63    Director

Sidney Lapidus......................   62    Director

David E. Libowitz...................   36    Director

C. Anthony Wainwright...............   66    Director
</TABLE>

     Christopher A. Sinclair has been President, Chief Executive Officer and a
director of the Company since December, 1998 and has been Chairman of the Board
of the Company since May, 1999. Prior to his joining the Company, he served as
President and Chief Executive Officer of Cutter Capital LLC, a venture capital
and commercial real estate investment firm, from March, 1998 to December, 1998.
From September, 1996 to March, 1998, he served as President and Chief Executive
Officer of Quality Food, Inc., a multi regional supermarket chain. Prior
thereto, Mr. Sinclair held various senior management positions with PepsiCo,
Inc., including Chairman and Chief Executive Officer of Pepsi-Cola Company from
April, 1996 to July, 1996, President and Chief Executive Officer of PepsiCo
Foods & Beverages International from 1993 to 1996 and President and Chief
Executive Officer of Pepsi-Cola International from 1989 to 1993. Mr. Sinclair is
a member of the Board of Directors of Venator Group, Inc. and Mattel, Inc.

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

     Richard R. Gros has been Executive Vice President Human Resources of the
Company since February, 1999. Prior to his joining the Company, Mr. Gros served
as Senior Vice President of Human Resources for the Frito Lay International
division of PepsiCo, Inc. from April, 1996 through July, 1998. Prior thereto,
Mr. Gros served as Vice President of Human Resources for PepsiCo Foods &
Beverages International from September, 1992, through March, 1996.

     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.

     John C. Voaden has been Executive Vice President of the Company and Chief
Executive Officer of the Company's Hospitality Resources (hotel audiovisual
outsourcing) division since May, 1999. Prior to his joining the Company,
Mr. Voaden served as Senior Vice President of Sales and Distribution for Carvel
Corporation, a consumer packaged goods company from 1995 through 1998. Prior
thereto, Mr. Voaden served as Regional Director for Coca Cola Bottling Company
of New York from 1988 through 1995.

                                       6

<PAGE>

     Raymond S. Ingleby has been Vice Chairman of the Board of the Company since
May, 1999. Mr. Ingleby has been a director of the Company since its formation in
1989 and served as Chairman of the Board from June, 1993 through May, 1999.
Mr. Ingleby also served as Chief Executive Officer of the Company from 1989 to
December, 1998.

     Errol M. Cook has been a director of the Company since June, 1992.
Mr. Cook presently serves as a Senior Advisor to E.M. Warburg, Pincus & Co., LLC
("EMW LLC"). Mr. Cook served as a Managing Director of EMW LLC or its
predecessor since March, 1991 through his retirement therefrom in December,
1998.

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

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

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

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

                                       7

<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. The number of stockholders of record of
Common Stock on December 1, 1999 was 142.

<TABLE>
<CAPTION>
                                                                                            PRICE RANGE
                                                                                           -------------
                                                                                           HIGH      LOW
                                                                                           ----      ---
<S>                                                                                        <C>       <C>
FISCAL 1998:
  First Quarter.........................................................................   $46 1/2   $36 11/16
  Second Quarter........................................................................    40 1/2    30 1/2
  Third Quarter.........................................................................    41 3/4    16 11/16
  Fourth Quarter........................................................................    18         8 5/16

FISCAL 1999:
  First Quarter.........................................................................   $10 3/4   $ 5 7/16
  Second Quarter........................................................................    10 9/16    7 1/8
  Third Quarter.........................................................................     8 15/16   4 9/16
  Fourth Quarter........................................................................     9 3/8     5 1/8
</TABLE>

     The closing price per share of the Common Stock on December 27, 1999 was
$5.9375.

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

                                       8

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

                            SELECTED FINANCIAL DATA

     The historical selected financial data presented below as of and for the
fiscal years ended September 30, 1995, 1996, 1997, 1998 and 1999, are derived
from, and are qualified by reference to, the consolidated financial statements
that have been audited by Ernst & Young LLP, independent auditors. The data
presented below should be read in conjunction with the Company's consolidated
financial statements and related notes thereto and other information included
elsewhere in this Form 10-K.

<TABLE>
<CAPTION>
                                                                          YEAR ENDED SEPTEMBER 30,
                                                            -----------------------------------------------------
                                                              1995       1996       1997       1998       1999
                                                            ---------  ---------  ---------  ---------  ---------
                                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                         <C>        <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Service revenue...........................................  $  81,131  $ 148,330  $ 213,239  $ 296,393  $ 302,087
Rental revenue............................................         --         --    131,843    414,941    447,567
Intercompany eliminations.................................         --         --     (2,824)   (14,556)   (23,650)
                                                            ---------  ---------  ---------  ---------  ---------
         Total revenue....................................     81,131    148,330    342,258    696,778    726,004
Cost of service revenue...................................     54,312     99,797    144,980    204,511    211,576
Cost of rental revenue....................................         --         --     86,885    309,680    357,308
Intercompany eliminations.................................         --         --     (2,824)   (14,556)   (23,650)
                                                            ---------  ---------  ---------  ---------  ---------
         Total cost of revenue............................     54,312     99,797    229,041    499,635    545,234
                                                            ---------  ---------  ---------  ---------  ---------
Gross profit..............................................     26,819     48,533    113,217    197,143    180,770
Selling, general and administrative expenses..............     19,306     30,442     71,270    143,408    149,147
Restructuring charge(a)...................................         --         --         --      6,953     10,769
Loss on disposal of assets(b).............................         --         --         --         --     16,500
Non-cash compensation expense(c)..........................         --      1,072         --         --         --
Depreciation and amortization.............................      2,330      3,142      8,905     21,586     27,347
                                                            ---------  ---------  ---------  ---------  ---------
         Total operating expenses.........................     21,636     34,656     80,175    171,947    203,763
Equity in income of affiliated company....................         --         --         --        688         --
                                                            ---------  ---------  ---------  ---------  ---------
Operating income (loss)...................................      5,183     13,877     33,042     25,884    (22,993)
Interest expense with related parties.....................      2,234      1,199         --         --         --
Interest expense, other...................................      1,259        387      2,429     24,325     34,950
                                                            ---------  ---------  ---------  ---------  ---------
Income (loss) before taxes and extraordinary charge.......      1,690     12,291     30,613      1,559    (57,943)
Provision (benefit) for taxes.............................        264      4,302     12,551        624     (5,650)
                                                            ---------  ---------  ---------  ---------  ---------
Income (loss) before extraordinary charge.................      1,426      7,989     18,062        935    (52,293)
Extraordinary charge on early extinguishment of debt (net
  of income taxes of $403)(d).............................         --         --         --        605         --
                                                            ---------  ---------  ---------  ---------  ---------
Net income (loss).........................................      1,426      7,989     18,062        330    (52,293)
Preferred stock dividends(e)..............................       (655)      (327)        --         --         --
                                                            ---------  ---------  ---------  ---------  ---------
Net income (loss) available to common stockholders........  $     771  $   7,662  $  18,062  $     330  $ (52,293)
                                                            ---------  ---------  ---------  ---------  ---------
                                                            ---------  ---------  ---------  ---------  ---------
Basic and diluted earnings per common share:
  Income (loss) before extraordinary charge...............  $    0.25  $    0.53  $    0.83  $    0.04  $   (2.21)
  Extraordinary charge....................................         --         --         --      (0.03)        --
                                                            ---------  ---------  ---------  ---------  ---------
  Net income (loss) per common share......................  $    0.25  $    0.53  $    0.83  $    0.01  $   (2.21)
                                                            ---------  ---------  ---------  ---------  ---------
                                                            ---------  ---------  ---------  ---------  ---------
BALANCE SHEET DATA:
Working capital...........................................  $     352  $   7,488  $  36,151  $  56,974  $  34,457
Total assets..............................................     45,298    126,322    313,877    697,949    659,469
Total debt................................................     34,175     22,839     61,859    397,240    427,139
Stockholders' equity......................................    (12,434)    53,468    171,434    175,775    122,480
</TABLE>

                      See Notes to Selected Financial Data

                                       9

<PAGE>

                        NOTES TO SELECTED FINANCIAL DATA

     (a)  In connection with the Company's efforts to integrate its acquired
businesses, primarily in the audiovisual services division, and to streamline
its organizational structure, the Company recorded an aggregate pre-tax
restructuring charge of $7.0 million during the year ended September 30, 1998,
of which $3.8 million and $3.2 million were recorded in the three months ended
March 31, 1998 and September 30, 1998, respectively. In addition, in connection
with an assessment of its strategic and financial alternatives, during fiscal
1999 the Company continued the reorganization of its businesses. As a result, in
the fiscal quarter ended September 30, 1999 the Company recorded a pre-tax
restructuring charge of $10.8 million. These charges related primarily to
employee termination and severance costs, lease termination costs and certain
other asset write-offs.

     (b)  In connection with the Company's disposal of its design and
installation business headquartered in Atlanta, a pre-tax loss of $16.5 million
was recorded in the three months ended June 30, 1999.

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

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

     (e)  All preferred stock was converted into common stock in connection with
the Company's initial public offering.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Certain statements contained herein may be deemed to be forward-looking
statements as defined in the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and
unknown risks and uncertainties which may cause the Company's actual results in
future periods or plans for future periods to differ materially from what is
currently anticipated. Those risks include, among others, general competitive
factors, the Company's ability to continue operational improvements in its
businesses, the Company's ability to comply with the terms of its bank credit
agreement (including through the possible sale of one or more of its
businesses), the seasonality and episodic nature of the Company's business, the
resolution of the shareholder class action lawsuit currently pending against the
Company and other risks and uncertainties detailed from time to time in the
Company's filings with the Securities and Exchange Commission. Other factors and
assumptions not identified above were also involved in the derivation of these
forward-looking statements, and the failure of such other assumptions to be
realized, as well as other factors, may also cause actual results to differ
materially from those projected. The Company assumes no obligation to update
these forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements.

                                       10

<PAGE>

RESULTS OF OPERATIONS

     During fiscal 1999, the Company had five reportable operating segments: the
Communications Division, Hotel Services, Staging and Meeting Services, Rental
Services and MES. Prior to fiscal 1999, the Company operated its Hotel Services,
Staging and Meeting Services and Rental Services businesses (collectively, its
audiovisual services businesses) on a combined basis. Disaggregated information
related to the components within the audiovisual services businesses is not
practically determinable for fiscal 1997 and fiscal 1998.

     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. Service revenue and cost of service revenue reflects such
amounts for the Company's Communications Division for all periods presented.
Rental revenue and cost of rental revenue includes such amounts for the
Company's Hotel Services, Staging and Meeting Services, Rental Services and MES
segments, in fiscal 1999, and such amounts, as applicable, for the Company's
audiovisual services businesses and for MES in fiscal 1997 and 1998.

<TABLE>
<CAPTION>
                                                                          YEAR ENDED SEPTEMBER 30,
                                                     -------------------------------------------------------------------
                                                             1997                   1998                   1999
                                                     ---------------------  ---------------------  ---------------------
                                                                           (DOLLARS IN THOUSANDS)
<S>                                                  <C>         <C>        <C>         <C>        <C>         <C>
Service revenue....................................  $  213,239       62.3% $  296,393       42.5% $  302,087       41.6%
Rental revenue.....................................     131,843       38.5     414,941       59.6     447,567       61.6
Intercompany eliminations..........................      (2,824)      (0.8)    (14,556)      (2.1)    (23,650)      (3.2)
                                                     ----------  ---------  ----------  ---------  ----------  ---------
          Total revenue............................     342,258      100.0%    696,778      100.0%    726,004      100.0%
Cost of service revenue............................     144,980       42.4     204,511       29.4     211,576       29.1
Cost of rental revenue.............................      86,885       25.4     309,680       44.4     357,308       49.2
Intercompany eliminations..........................      (2,824)      (0.8)    (14,556)      (2.1)    (23,650)      (3.2)
                                                     ----------  ---------  ----------  ---------  ----------  ---------
          Total cost of revenue....................     229,041       66.9     499,635       71.7     545,234       75.1
                                                     ----------  ---------  ----------  ---------  ----------  ---------
Gross profit.......................................     113,217       33.1     197,143       28.3     180,770       24.9
Selling, general and administrative expenses.......      71,270       20.8     143,408       20.6     149,147       20.5
Restructuring charge...............................          --         --       6,953        1.0      10,769        1.5
Loss on disposal of assets.........................          --         --          --         --      16,500        2.3
Depreciation and amortization......................       8,905        2.6      21,586        3.1      27,347        3.8
                                                     ----------  ---------  ----------  ---------  ----------  ---------
          Total operating expenses.................      80,175       23.4     171,947       24.7     203,763       28.1
Equity in income of affiliated company.............          --         --         688         --          --         --
                                                     ----------  ---------  ----------  ---------  ----------  ---------
Operating income (loss)............................      33,042        9.6      25,884        3.7     (22,993)      (3.2)
Interest expense, net..............................       2,429        0.7      24,325        3.5      34,950        4.8
                                                     ----------  ---------  ----------  ---------  ----------  ---------
Income (loss) before taxes and extraordinary
  charge...........................................      30,613        8.9       1,559        0.2     (57,943)      (8.0)
Provision (benefit) for taxes......................      12,551        3.7         624        0.1      (5,650)      (0.8)
                                                     ----------  ---------  ----------  ---------  ----------  ---------
Income (loss) before extraordinary charge..........      18,062        5.2         935        0.1     (52,293)      (7.2)
Extraordinary charge on early extinguishment of
  debt (net of income taxes of $403)...............          --         --         605        0.1          --         --
                                                     ----------  ---------  ----------  ---------  ----------  ---------
Net income (loss)..................................  $   18,062        5.2% $      330         --  $  (52,293)      (7.2)%
                                                     ----------  ---------  ----------  ---------  ----------  ---------
                                                     ----------  ---------  ----------  ---------  ----------  ---------
</TABLE>

FISCAL 1999 COMPARED TO FISCAL 1998

     Introduction.  During the third quarter of fiscal 1999 the Company
determined that it was necessary to reevaluate its strategic plan and to take
steps to reduce its outstanding long-term indebtedness with the overall
objective of maximizing shareholder value. In connection therewith, in May,
1999, the Company retained Salomon Smith Barney as its financial advisor to
assist it in reviewing its existing operations and assessing strategic and
financial alternatives. As a result of these efforts, during the fourth quarter
of 1999 the Company concluded, among other matters, that it should further
reorganize its audiovisual services operations (the "Restructuring") and pursue
the possible sale of one or more of its business operations. Accordingly,
charges were taken in the fourth quarter of fiscal 1999, which included $10.8
million of restructuring charges for obsolete

                                       11

<PAGE>

systems and software, leases and severance, $6.2 million of additional
provisions for uncollectible accounts receivable and $3.7 million of equipment
write downs. In addition, $8.4 million of administrative expenses related to
the closed Atlanta-based headquarters for the audiovisual services businesses
were incurred in fiscal 1999.

     Revenue.  Revenue increased $29.2 million, or 4.2%, from $696.8 million in
fiscal 1998 to $726.0 million in fiscal 1999. Rental revenue increased
$32.6 million, or 7.9%, (before intercompany eliminations) primarily due to
growth in the Company's hotel audio visual services segment, increased local
market penetration from the rental services segment and consistent solid results
from the staging and meeting services and MES segments. Service revenue
increased $5.7 million, or 1.9%, in fiscal 1999 from $296.4 million in fiscal
1998 due to increased business activity in the United Kingdom.

     Gross Profit.  Total gross profit decreased $16.4 million, or 8.3%, from
$197.1 million in fiscal 1998 to $180.8 million in fiscal 1999. As a percentage
of service revenue, the gross profit margin (before intercompany eliminations)
was 31.0% and 30.0% in fiscal 1998 and 1999, respectively. The gross profit
margin was affected by the specific production requirements of the contracts
completed during the period, as well as to the impact of lower margins achieved
on the increased sales volume in 1999 from the United Kingdom market. Gross
profit as a percentage of rental revenue (before intercompany eliminations)
decreased to 20.2% in fiscal 1999 from 25.4% in the prior year due to commission
rate increases, as well as increased costs relating to the rental of audio
visual equipment used in operations. In addition, during Fiscal 1999, the
Company recorded a non-cash charge of $3.7 million for the write-down of audio
visual rental equipment identified during the Comany's reorganization of its
audio visual businesses. In accordance with generally accepted accounting
principles, as such charge does not satisfy the criterion for inclusion in the
restructuring charge, it has been included in cost of rental revenue. Excluding
the effect of this charge, the gross profit as a percentage of rental revenue
decreased to 21.0% in fiscal 1999 from 25.4% in fiscal 1998. Gross profit on
rental revenue for both fiscal 1998 and 1999 was reduced by $16.2 million of
depreciation expense related to rental equipment used in the audio visual
services business. Such depreciation expense is included in cost of rental
revenue.

     Selling, general and administrative expenses.  Selling, general and
administrative expenses increased $5.7 million, or 4.0%, from $143.4 million in
fiscal 1998 to $149.1 million in fiscal 1999. Included in selling, general and
administrative expenses in fiscal 1999 is approximately $8.4 million in costs
incurred during fiscal 1999 related to the Company's former Atlanta-based
headquarters for the AV operations. Such costs primarily consist of rent on
facilities, certain administrative costs and consulting fees associated with the
completion of the Restructuring. In addition, the Company recorded an additional
charge of $6.2 million which represents additional reserves and write-offs
related to the accounts receivable of the former Atlanta-based audio visual
operations. The accounts receivable charge related primarily to disruptions in
collections and changes in certain billing procedures arising from the
Restructuring. Billing and collection efforts were affected because of personnel
turnover and other adverse impacts of the Restructuring. In connection with such
activities, and as part of the Company's periodic review of purchase accounting
accruals, approximately $2.6 million of aggregate liabilities established in
connection with certain acquisitions completed in fiscal 1996 and 1997 were
identified as excess and reversed. Excluding the impact of the accounts
receivable charge of $6.2 million, the reversal of the $2.6 million of excess
purchase accounting accruals and the above-described costs of $8.4 million,
selling, general and administrative expenses, as a percentage of revenue, was
approximately 18.9% in Fiscal 1999 as compared with 20.6% in Fiscal 1998.

     Loss of disposition of assets.  Effective June 30, 1999, the Company
disposed of its design and installation business headquartered in Atlanta. A
pre-tax loss of $16.5 million was incurred upon the disposition of the related
assets. Total net cash proceeds of approximately $2.0-$3.0 million are expected
upon final accounting of the disposition.

     Restructuring Charge.  In order to continue to streamline the
organizational structure and improve operational efficiencies, the Company
effectuated the Restructuring and recorded a pre-tax restructuring charge of
$10.8 million in the fiscal quarter ended September 30, 1999. The charge
included $1.5 million of employee termination and severance costs associated
with a further reduction in the workforce of approximately 60 people,
$4.0 million related to lease termination and other facility shut-down costs and
$5.3 million of computer software

                                       12

<PAGE>

and equipment no longer used as a result of the reorganization. The remaining
liability at September 30, 1999 was $2.7 million.

     In fiscal 1998, the Company initiated a review of its operations, focusing
on the integration of acquired businesses as well as the overall management and
organizational structure. Accordingly, during the fiscal quarter ended
March 31, 1998, the Company recorded a pre-tax restructuring charge of
$3.8 million. The charge included $2.8 million related to employee termination
and severance costs associated with a reduction in the workforce of
approximately 155 people and $1.0 million related to lease termination and other
costs. During the fiscal quarter ended September 30, 1998, the Company recorded
an additional pre-tax restructuring charge of $3.2 million in connection with
the continuation of the reorganization plan begun in March 1998. The charge
included $1.0 million related to the severance and termination costs for
approximately 330 people, $0.7 million of lease termination costs, $1.5 million
relating to the write-off of certain assets and other termination and shut down
costs. The total remaining restructuring liability as of September 30, 1998 was
$4.1 million and was fully utilized during fiscal 1999.

     Depreciation and amortization.  Depreciation and amortization expense for
fiscal 1999 was $27.3 million, an increase of $5.8 million from the prior year.
Purchase of property and equipment and the continued investment in information
technology resulted in increased depreciation expense of $4.1 million.
Amortization expense increased $1.7 million resulting primarily from increased
goodwill.

     Equity income of Affiliated Company.  In November, 1997, the Company
acquired a minority interest in Visual Action Holdings, Ltd. ("Visual Action")
through open market purchases resulting in the equity in income reflected for
the year ended September 30, 1998. The Company acquired a majority interest and
began consolidating the financial results of Visual Action as of December 1,
1997.

     Interest expense, net.  Interest expense, net increased by $10.6 million
due to higher average outstanding indebtedness as well as higher borrowing
costs.

     Provision for taxes.  The effective tax rate for the years ended September
30, 1999 and 1998 was 9.8% and 40%, respectively. The decrease in the effective
tax rate is attributable to the establishment of a valuation allowance for the
deferred tax assets arising from the fiscal 1999 net operating losses.

     Extraordinary Charge on Early Extinguishment of Debt.  In connection with
the acquisition of Visual Action, the Company entered into a new credit facility
in October, 1997. As a result, during the year ended September 30, 1998, the
Company wrote off approximately $0.6 million (net of taxes of $.4 million) of
the remaining unamortized debt issuance costs related to its former bank
facilities.

     Net (loss) income.  The Company realized a net loss of $52.3 million in the
year ended September 30, 1999 compared to net income of $0.3 million in the year
ended September 30, 1998. The basic and diluted loss per common share for fiscal
1999 was $2.21 as compared with earnings per common share of $0.01 for fiscal
1998. The net loss for the year ended September 30, 1999, excluding the effect
of the loss on the disposition of assets, the restructuring charge and the
charges included in selling, general and administrative expenses associated with
the closure of the Atlanta-based audiovisual facility would have been $5.0
million, or a net loss per common share of $0.21. Basic and diluted earnings per
common share before the restructuring charge and the extraordinary charge on
early extinguishment of debt would have been $0.22 for the year ended
September 30, 1998.

FISCAL 1998 COMPARED TO FISCAL 1997

     Revenue.  Revenue increased $354.5 million, or 103.6%, from $342.3 million
in fiscal 1997 to $696.8 million in fiscal 1998. Approximately 79.9% of the
increase represented revenue (before intercompany eliminations) from the
Company's audiovisual services division, primarily as a result of the Company's
acquisition of Visual Action effective December 1, 1997. Increases in the
Communications division's service revenue (before intercompany eliminations)
accounted for the remaining 20.1% of the total revenue growth, primarily from
clients in the financial services, government, insurance and information
technology industries. Decreases in service revenue from the automotive industry
were offset by increases in revenue from clients in the pharmaceuticals and food
service industries.

                                       13

<PAGE>

     Gross Profit.  Total gross profit increased $83.9 million, or 74.1%, from
$113.2 million in fiscal 1997 to $197.1 million in fiscal 1998, as a result of
the revenue growth described above. As a percentage of the Communications
division's service revenue, gross profit (before intercompany eliminations) was
32.0% and 31.0% in fiscal 1997 and fiscal 1998, respectively. Gross profit
(before intercompany eliminations) as a percentage of rental revenue was 34.1%
and 25.4% in fiscal 1997 and fiscal 1998, respectively. The decrease in the
gross margin on rental revenue resulted primarily from the impact of acquired
rental businesses, which had historically operated at lower gross margins, and
investments made to strengthen the infrastructure of the Company's rental
businesses to enable them to handle future revenue growth. Gross profit on
rental revenue for the years ended September 30, 1997 and 1998 was impacted by
$4.2 million and $16.2 million, respectively, of depreciation expense related to
rental equipment used in the audiovisual services businesses. Such depreciation
expense is included in cost of rental revenue.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased $72.1 million, or 101.2%, from $71.3 million
in fiscal 1997 to $143.4 million in fiscal 1998, resulting primarily from the
expansion of the Company as a result of its various acquisitions. Salaries and
related costs increased $43.9 million as a result of increased personnel to
support the overall growth of the Company and normal inflationary increases.
Other general and administrative expenses such as rent and related costs,
telephone, office supplies and equipment, as well as insurance and other
miscellaneous costs increased $21.7 million. Direct selling expenses such as
travel, marketing, postage and other costs related to obtaining business
increased $6.5 million. Selling, general and administrative expenses, as a
percentage of total revenue, were 20.8% and 20.6% in fiscal 1997 and 1998,
respectively.

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

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

     The total remaining restructuring liability as of September 30, 1998 was
$4.1 million and was fully utilized during fiscal 1999.

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

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

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

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

                                       14

<PAGE>

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

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

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

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,
                                                                    -----------------------------------
                                                                       1997         1998        1999
                                                                    -----------  -----------  ---------
<S>                                                                 <C>          <C>          <C>
Net cash provided by (used in):
  Operating activities............................................  $     7,884  $    22,990  $  14,839
  Investing activities............................................     (128,522)    (302,973)   (55,276)
  Financing activities............................................      122,113      285,499     27,257
</TABLE>

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

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

     In fiscal 1999, the Company generated $14.8 million from its operating
activities. Net income adjusted for depreciation and amortization, the
restructuring charges, the loss on disposal of assets, and the fixed asset write
offs provided $21.9 million. The net change in working capital used $7.0
million, with a decrease in accounts receivable, deferred charges and taxes
receivable, which were more than offset by an increase in prepaid expenses and
other current assets and decreases in deferred income, accounts payable and
accrued expenses and other liabilities. Investing activities used $55.3 million
due to acquisition-related expenditures and fixed asset

                                       15

<PAGE>

purchases, primarily audiovisual and computer equipment, as well as information
technology enhancements. Financing activities provided $27.3 million, of which
$174.6 million was provided by drawings under the Company's bank facilities,
offset by repayments of $144.5 million and $2.8 million was used to pay
financing fees in connection with amendments to the Company's credit agreement.

     On October 28, 1997, the Company entered into a new loan agreement with a
syndicate of banks pursuant to which the Company increased its aggregate
available bank financing from $100 million to $550 million, consisting of a $300
million six year revolving line of credit (the "Revolving Facility") to be
utilized in connection with future acquisitions and for working capital and
general corporate purposes and a $250 million six year term loan (the "Term
Facility" and together with the Revolving Facility, the "Credit Agreement"),
which was fully utilized in connection with the acquisition of Visual Action.
Amounts outstanding under the Company's former credit facility were repaid with
the proceeds from the Credit Agreement. The Company recognized an extraordinary
loss of $0.6 million, net of taxes of $0.4 million in the quarter ended December
31, 1997 resulting from the write-off of the unamortized debt issuance fees
relating to the Company's former credit facility. Approximately $4.8 million in
debt issuance fees were incurred in connection with the Credit Agreement. Such
fees are being amortized over the term of the Credit Agreement.

     In May, 1998, the Company repaid approximately $26 million under the Term
Facility thereby permanently reducing availability thereunder by such amount. In
December, 1998 and July 1999, the terms of the Revolving Facility were amended
to reduce the aggregate availability thereunder from $300 million to $250
million, to amend certain financial covenants contained therein and to increase
the interest rate on amounts outstanding under the Credit Agreement.

     At June 30, 1999, the Company did not achieve certain of the financial
covenants specified in the Credit Agreement. In connection with the amendments
made to the Credit Agreement in July 1999 (the "July 1999 Amendment"), the
lenders waived through March 30, 2000, all defaults that have arisen or may
arise from the failure to satisfy the specified financial covenants for
June 30, 1999, September 30, 1999 and December 31, 1999. As part of such
amendment, the Company agreed, among other things, to revised covenants
regarding minimum consolidated earnings before interest, taxes, depreciation and
amortization ("EBITDA") as defined in the Credit Agreement, for the twelve month
periods ending June 30, September 30 and December 31, 1999, and to restrictions
on the amount of permitted capital expenditures (as described in the Credit
Agreement) for the three month periods ending September 30 and December 31,
1999.

     At September 30, 1999, the Company was not in compliance with the covenants
set forth in the July 1999 Amendment. On December 23, 1999, the Company obtained
a further amendment (the "December 1999 Amendment") to the Credit Agreement
that, among other things, extended the waivers under the July 1999 Amendment
until October 1, 2000, and waived through October 1, 2000 all defaults arising
from the failure at September 30, 1999 to satisfy the financial covenants
specified in the July 1999 Amendment. As part of the December 1999 Amendment,
the Company agreed to a minimum consolidated adjusted EBITDA covenant that is
based on post-September 30, 1999 consolidated EBITDA (as defined in the Credit
Agreement), and to restrictions on the amount of capital expenditures that may
be made by the Company during the fiscal year ending September 30, 2000. The
minimum required consolidated adjusted EBITDA, as defined, for fiscal 2000
exceeds levels achieved in fiscal 1999.

     In addition to the waivers and revised financial covenants described above,
the December 1999 Amendment provides for the deferral through October 1, 2000 of
the principal payments due under the Term Facility on December 31, 1999 and
March 31, 2000. The December 1999 Amendment also includes a consent by the
lenders that will allow the Company to pursue the possible sale of its
audiovisual businesses, provided that certain timing requirements are met and
minimum net proceeds exceed a specified amount. If such a transaction is
consummated, the Company would be obligated to use the net proceeds, subject to
certain adjustments, to pay down amounts outstanding under the Credit Agreement,
and would be subject to revised financial covenants. There can be no assurance
that any such transaction will be entered into or consummated, or that it will
meet the parameters required by the December 1999 Amendment.

     Fees of approximately $1.2 million, $1.4 million and $1.0 million were
incurred in connection with the amendments made to the Credit Agreement in
December, 1998, July, 1999, and December 1999, respectively. Such fees will be
amortized over the remaining term of the Credit Agreement.

                                       16

<PAGE>

     The maturity date of each of the Term Facility and the Revolving Facility
is October, 2001. Interest on outstanding amounts under the Credit Agreement 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 applicable
margins are subject to change based on the occurrence of certain events. The
interest rate on the Credit Agreement is presently LIBOR plus 3.25%. The
applicable interest margin is subject to upward adjustment of 0.75% on March 1,
2000 if the Company has not entered into a definitive agreement to sell its
audiovisual businesses by such date and an additional 0.75% on June 1, 2000 if
such transaction has not been consummated by such date.

     Principal on the Term Facility is payable in quarterly installments,
subject to the deferrals described above, with the final scheduled payment due
on October 1, 2001. Subject to reductions in such quarterly installments for any
prepayments made under the Term Facility, at present, the Company will be
required to repay an aggregate of: (i) $17.8 million in fiscal 2000, (ii) $50.4
million in fiscal 2001 and (iii) $132.4 million in fiscal 2002. The Company is
permitted and intends (to the extent available) to draw on the Revolving
Facility to make certain of the above payments.

     The Credit Agreement is secured by substantially all of the assets of the
Company and its material subsidiaries, and the Company and its subsidiaries have
pledged the stock of their respective subsidiaries for the ratable benefit of
its lending banks. In addition to the financial covenants described above, the
Credit Agreement contains certain other covenants and restrictions customary for
credit facilities of a similar nature, including, without limitation,
restrictions on the ability of the Company to pay dividends.

     The aggregate scheduled payments of all long-term debt outstanding at
September 30, 1999 (including amounts outstanding under the Term Facility), for
the next three fiscal years, are as follows: 2000--$19.1 million; 2001--$75.9
million; 2002-$332.1 million; totaling $427.1 million.

     Capital expenditures were $17.7 million in fiscal 1997, $46.5 million in
fiscal 1998 and $45.4 million in fiscal 1999. During fiscal 1997, the purchase
of additional personal computers and expanded capabilities for the computer
system accounted for the largest areas of expenditure. During fiscal 1998 and
fiscal 1999, the purchase of audiovisual rental equipment and the continued
investment in information technology comprised the major portion of capital
expenditures.

     The Company believes it will be able to satisfy the financial and other
covenants included in the Credit Agreement, as amended by the December 1999
Amendment. Further, the Company continues to believe it necessary to take
actions to reduce its indebtedness under the Credit Agreement, including the
possible sale of one or more of its operations. In connection therewith, the
Company's financial advisor, Salomon Smith Barney, is assisting the Company in
assessing strategic and financial alternatives. There can be no assurance that
the Company will be able to take such actions or that it will be able to remain
in compliance with the financial covenants specified in the Credit Agreement
during the twelve months ending September 30, 2000. Unless further amendments or
waivers were to be obtained from the lenders, the failure to satisfy the
specified financial covenants or the occurrence of any other event of default
under the Credit Agreement, as amended, would entitle the lenders to, among
other things, accelerate the maturity of the outstanding borrowings under the
Credit Agreement, and exercise all or any of their other rights or remedies. Any
such acceleration or other exercise of rights and remedies would likely have a
material adverse effect on the Company.

     As of December 29, 1999, the Company had approximately $437.2 million
outstanding under the Credit Agreement, of which $237.6 million was outstanding
under the Revolving Facility. Cash on hand as of such date was $5.0 million. The
Company believes that cash flow from operations and available credit under the
Revolving Facility will be sufficient to meet operating needs through the end of
fiscal 2000.

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, 1998
and 1999. 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.

                                       17

<PAGE>

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 1998(A)                               FISCAL 1999(A)(B)(C)
                              --------------------------------------------    --------------------------------------------
                                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....................   $122,449    $187,378    $202,898    $184,053    $159,983    $203,696    $192,361    $169,964
Gross profit...............     35,749      56,819      58,331      46,244      40,717      56,783      50,732      32,538
Operating income (loss)....      3,135      13,256      16,802      (7,309)     (2,532)     14,727      (8,295)    (26,893)
Net income (loss)..........       (477)      3,765       5,836      (8,794)     (6,035)      3,688     (11,859)    (38,087)
</TABLE>

NOTES TO QUARTERLY RESULTS

     (a) In connection with the Company's efforts to integrate its acquired
businesses, primarily in the audiovisual services division, and to streamline
its organizational structure, the Company recorded an aggregate pre-tax
restructuring charge of $7.0 million during the year ended September 30, 1998,
of which $3.8 million and $3.2 million were recorded in the three months ended
March 31, 1998 and September 30, 1998, respectively. In addition, in connection
with an assessment of its strategic and financial alternatives, during fiscal
1999, the Company continued the reorganization of its business. As a result, in
the fiscal quarter ended September 30, 1999, the Company recorded a pre-tax
restructuring charge of $10.8 million. These charges related primarily to asset
write-offs, lease termination costs and employee severance.

     (b) The net loss incurred during the first quarter of fiscal 1998 includes
the write-off of approximately $0.6 million (net of taxes of $0.4 million) of
the remaining unamortized debt issuance costs related to the Company's former
bank facilities.

     (c) Operating losses for the three and twelve months ended September 30,
1999 include approximately $11.4 million and $18.3 million, respectively, of
costs relating to the Company's former Atlanta-based headquarters for its
audiovisual services businesses.

     (d) Results of operations for the year ended September 30, 1999 include
operating losses of $2.9 million from the Company's design and installation
business, which was disposed effective June 30, 1999. A pre-tax loss of
$16.5 million in respect of such disposition was recorded at June 30, 1999.

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 the Company's AV
Operations, customers are billed upon completion of the staging service or
rental. The Company provides audiovisual equipment rentals to customers based on
published price lists. Billings prior to delivery date are carried as deferred
income in the Company's financial statements and costs incurred prior to the
delivery date are carried as deferred charges. 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.

YEAR 2000 COMPLIANCE

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

                                       18

<PAGE>

     The Company's Computer Applications consist of both internal systems and
systems provided by third parties. The Company has completed a comprehensive
Year 2000 readiness program, which has included completing an inventory of all
computer related systems that might have a Year 2000 exposure, testing of those
systems, and remedying the systems to be Year 2000 compliant. The Company
believes that it has substantially achieved Year 2000 readines.

     Although the Company believes that it will be able to resolve the Year 2000
Issue, there can be no assurance that the Company will identify all susceptible
systems or that systems provided by third parties will be Year 2000 compliant or
that any resulting Year 2000 Issues would not have an adverse effect on the
results of operations of the Company. The Company has developed contingency
plans that it believes can address any disruptions that may be caused by Year
2000-related occurrences.

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company has operations in various foreign countries. In the normal
course of business, these operations are exposed to fluctuations in currency
values. Management does not consider the impact of currency fluctuations to
represent a significant risk. The Company's interest expense is sensitive to
changes in the general level of U.S. interest rates. In this regard, changes in
the U.S. rates affect the interest paid on a portion of its debt. The Company
does not generally enter into derivative financial instruments in the normal
course of business, nor are such instruments used for speculative purposes.

                                       19

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         REPORT OF INDEPENDENT AUDITORS

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

We have audited the accompanying consolidated balance sheets of Caribiner
International, Inc. (the "Company") as of September 30, 1998 and 1999, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended September 30, 1999. 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, 1998 and 1999 and the consolidated results of its operations and
its cash flows for each of the three years in the period ended September 30,
1999, in conformity with generally accepted accounting principles.

                                          /s/ ERNST & YOUNG LLP

New York, New York
December 28, 1999

                                       20

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEETS
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                SEPTEMBER 30,
                                                                                             --------------------
                                                                                               1998        1999
                                                                                             --------    --------
<S>                                                                                          <C>         <C>
                                          ASSETS
Current Assets:
  Cash and cash equivalents...............................................................   $ 15,117    $  1,675
  Trade accounts receivable, net of allowance for doubtful accounts of $2,150 in 1998 and
     $4,693 in 1999.......................................................................    124,936     100,446
  Deferred charges........................................................................     12,923       8,301
  Prepaid expenses and other current assets...............................................     11,610      20,173
                                                                                             --------    --------
     Total Current Assets.................................................................    164,586     130,595
  Property and equipment, net.............................................................     98,070     100,438
  Goodwill, net...........................................................................    419,581     409,204
  Taxes receivable........................................................................      4,479       4,548
  Deferred tax asset......................................................................        362          --
  Other assets............................................................................     10,871      14,684
                                                                                             --------    --------
Total Assets..............................................................................   $697,949    $659,469
                                                                                             --------    --------
                                                                                             --------    --------

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt.......................................................   $  1,000    $  1,299
  Trade accounts payable..................................................................     23,739      22,527
  Accrued expenses and other current liabilities..........................................     39,449      40,436
  Accrued production costs................................................................     25,331      20,259
  Deferred income.........................................................................     18,093      11,617
                                                                                             --------    --------
     Total Current Liabilities............................................................    107,612      96,138
  Long-term debt..........................................................................    396,240     425,840
  Deferred income.........................................................................      8,409       4,975
  Deferred tax liability..................................................................         --       7,892
  Other liabilities.......................................................................      9,913       2,144
                                                                                             --------    --------
Total Liabilities.........................................................................    522,174     536,989

Stockholders' Equity:
  Preferred stock, $.01 par value:
     2,000 shares authorized, none issued and outstanding at 1998 and 1999................         --          --
  Common stock, $.01 par value:
     40,000 voting shares authorized, and 23,689 and 23,697 shares issued and outstanding
      at 1998 and 1999, respectively......................................................        236         236
  Additional paid-in capital..............................................................    167,608     167,677
  Accumulated other comprehensive income (loss)...........................................     (3,714)     (4,785)
  Retained earnings (deficit).............................................................     11,645     (40,648)
                                                                                             --------    --------
     Total Stockholders' Equity...........................................................    175,775     122,480
                                                                                             --------    --------
Total Liabilities and Stockholders' Equity................................................   $697,949    $659,469
                                                                                             --------    --------
                                                                                             --------    --------
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       21

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED SEPTEMBER 30,
                                                                                --------------------------------
                                                                                  1997        1998        1999
                                                                                --------    --------    --------
                                                                                     (AMOUNTS IN THOUSANDS,
                                                                                     EXCEPT PER SHARE DATA)
<S>                                                                             <C>         <C>         <C>
Service revenue..............................................................   $213,239    $296,393    $302,087
Rental revenue...............................................................    131,843     414,941     447,567
Intercompany eliminations....................................................     (2,824)    (14,556)    (23,650)
                                                                                --------    --------    --------

     Total revenue...........................................................    342,258     696,778     726,004
                                                                                --------    --------    --------
Cost of service revenue......................................................    144,980     204,511     211,576
Cost of rental revenue (note 4)..............................................     86,885     309,680     357,308
Intercompany eliminations....................................................     (2,824)    (14,556)    (23,650)
                                                                                --------    --------    --------

     Total cost of revenue...................................................    229,041     499,635     545,234
                                                                                --------    --------    --------

Gross profit.................................................................    113,217     197,143     180,770

Operating expenses:
  Selling, general and administrative expenses (note 4)......................     71,270     143,408     149,147
  Restructuring charge (note 3)..............................................         --       6,953      10,769
  Loss on disposal of assets (note 5)........................................         --          --      16,500
  Depreciation and amortization..............................................      8,905      21,586      27,347
                                                                                --------    --------    --------

     Total operating expenses................................................     80,175     171,947     203,763

Equity in income of affiliated company (note 5)..............................         --         688          --
                                                                                --------    --------    --------

Operating income (loss)......................................................     33,042      25,884     (22,993)

Interest expense, net........................................................      2,429      24,325      34,950
                                                                                --------    --------    --------

Income (loss) before taxes and extraordinary charge..........................     30,613       1,559     (57,943)
Provision (benefit) for taxes................................................     12,551         624      (5,650)
                                                                                --------    --------    --------

Income (loss) before extraordinary charge....................................     18,062         935     (52,293)
Extraordinary charge on early extinguishment of debt (net of income taxes of
  $403) (note 7).............................................................         --         605          --
                                                                                --------    --------    --------
Net income (loss)............................................................   $ 18,062    $    330    $(52,293)
                                                                                --------    --------    --------
                                                                                --------    --------    --------

Basic and diluted earnings per common share:
  Income (loss) before extraordinary charge..................................   $   0.83    $   0.04    $  (2.21)
  Extraordinary charge.......................................................         --       (0.03)         --
                                                                                --------    --------    --------

Net income (loss) per common share...........................................   $   0.83    $   0.01    $  (2.21)
                                                                                --------    --------    --------
                                                                                --------    --------    --------
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       22

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED SEPTEMBER 30,
                                                                              -----------------------------------
                                                                                1997         1998         1999
                                                                              ---------    ---------    ---------
                                                                                    (AMOUNTS IN THOUSANDS)
<S>                                                                           <C>          <C>          <C>
Cash flows from operating activities:
  Net income (loss)........................................................   $  18,062    $     330    $ (52,293)
  Adjustments to reconcile net income (loss) to net cash provided by
     operating activities:
     Restructuring charge, net of cash payments............................          --        4,125        9,669
     Loss on disposal of assets............................................          --           --       16,500
     Fixed asset write-offs................................................          --           --        4,439
     Extraordinary charge on early extinguishment of debt, net of tax......          --          605           --
     Depreciation and amortization.........................................      13,082       37,801       43,563
  Change in assets and liabilities, net of amounts acquired:
     (Increase) decrease in accounts receivable............................     (19,547)     (11,158)      18,206
     (Increase) decrease in deferred charges...............................       1,469       (1,880)       2,235
     (Increase) decrease in prepaid expenses and other current assets......      (3,714)       1,280       (9,030)
     (Increase) decrease in taxes receivable...............................       2,867      (11,935)         185
     (Decrease) in other assets............................................      (1,646)      (3,866)      (1,503)
     (Decrease) in accounts payable........................................        (450)      (3,851)        (290)
     Increase (decrease) in deferred income................................      (5,165)       6,428       (9,582)
     Increase (decrease) in accrued expenses and other liabilities.........       2,926        5,111       (7,260)
                                                                              ---------    ---------    ---------

     Net cash provided by operating activities.............................       7,884       22,990       14,839
                                                                              ---------    ---------    ---------

Cash flows from investing activities:
     Purchase of property and equipment....................................     (17,725)     (46,454)     (45,410)
     Net proceeds from disposition of businesses...........................          --       48,892           --
     Acquisition of intangibles and businesses, net of cash acquired.......    (110,797)    (305,411)      (9,866)
                                                                              ---------    ---------    ---------

     Net cash used in investing activities.................................    (128,522)    (302,973)     (55,276)
                                                                              ---------    ---------    ---------

Cash flows from financing activities:
  Net proceeds from issuance of common stock...............................      85,792           --           --
  Proceeds from exercise of stock options..................................          --          667           --
  Net repayments of bank line of credit....................................      (6,000)          --           --
  Proceeds from long-term debt.............................................     135,870      759,122      174,550
  Repayments of long-term debt.............................................     (92,517)    (470,478)    (144,457)
  Deferred financing fees..................................................      (1,032)      (3,812)      (2,836)
                                                                              ---------    ---------    ---------

     Net cash provided by financing activities.............................     122,113      285,499       27,257
                                                                              ---------    ---------    ---------
Effect of exchange rate changes on cash and cash equivalents...............         346         (652)        (262)
                                                                              ---------    ---------    ---------

Net increase (decrease) in cash and cash equivalents.......................       1,821        4,864      (13,442)
Cash and cash equivalents beginning of year................................       8,432       10,253       15,117
                                                                              ---------    ---------    ---------

Cash and cash equivalents end of year......................................   $  10,253    $  15,117    $   1,675
                                                                              ---------    ---------    ---------
                                                                              ---------    ---------    ---------
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       23

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  FOR THE THREE YEARS ENDED SEPTEMBER 30, 1999
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                         ACCUMULATED
                                                COMMON STOCK     ADDITIONAL   RETAINED     OTHER            TOTAL
                                              ----------------    PAID-IN     EARNINGS   COMPREHENSIVE   STOCKHOLDERS'
                                              SHARES    AMOUNT    CAPITAL     (DEFICIT)  INCOME (LOSS)     EQUITY
                                              -------   ------   ----------   --------   -------------   -------------
<S>                                           <C>       <C>      <C>          <C>        <C>             <C>
Balance at September 30,
  1996......................................  $19,197    $192     $ 59,937    $ (6,747)     $    86        $  53,468
Net income..................................       --      --           --      18,062           --           18,062
Foreign currency translation adjustment.....       --      --           --          --          (75)             (75)
                                                                                                           ---------
Other comprehensive income..................                                                                  17,987
Issuance of common stock under non-employee
  directors' stock plan.....................        2      --           37          --           --               37
Issuance of common stock upon offering......    3,744      37       85,754          --           --           85,791
Issuance of common stock upon acquisitions
  completed during fiscal 1997..............      474       5       14,146          --           --           14,151
                                              -------    ----     --------    --------      -------        ---------

Balance at September 30,
  1997......................................   23,417     234      159,874      11,315           11          171,434
Net income..................................       --      --           --         330           --              330
Foreign currency translation adjustment.....       --      --           --          --       (3,725)          (3,725)
                                                                                                           ---------
Other comprehensive (loss)..................                                                                  (3,395)
Issuance of common stock upon acquisitions
  completed during fiscal 1998..............      239       2        7,042          --           --            7,044
Issuance of common stock upon exercise of
  stock options.............................       33       *          692          --           --              692
                                              -------    ----     --------    --------      -------        ---------
Balance at September 30,
  1998......................................   23,689     236      167,608      11,645       (3,714)         175,775

Net loss....................................       --      --           --     (52,293)          --          (52,293)

Foreign currency translation adjustment.....       --      --           --          --       (1,071)          (1,071)
                                                                                                           ---------

Other comprehensive (loss)..................                                                                 (53,364)

Issuance of common stock....................        8       *           69          --                            69
                                              -------    ----     --------    --------      -------        ---------
Balance at September 30,
  1999......................................   23,697    $236     $167,677    $(40,648)     $(4,785)       $ 122,480
                                              -------    ----     --------    --------      -------        ---------
                                              -------    ----     --------    --------      -------        ---------
</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 a producer of meetings,
events and training programs, a provider of audiovisual equipment rentals, sales
and installations and related staging services, and a provider of related
business communications and corporate meeting services that enable businesses to
inform, sell to and train their sales forces, dealers, franchisees, partners,
stockholders and employees. As used herein, the terms "Caribiner" or the
"Company" refer to Caribiner International, Inc. and its subsidiaries, and the
references to a fiscal year are to the Company's fiscal year ended September 30
in the referenced year.

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 fiscal 1997 and fiscal 1998
consolidated financial statements to conform to the current year presentation.

  Revenue Recognition

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

     Rental revenue is recognized over the related rental period.

  Cost of Revenue

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

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

  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.

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.

                                       25

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

  Goodwill

     Goodwill represents the excess of the cost over the fair value of net
assets of purchased businesses and is amortized on a straight-line basis over
periods ranging from 15 years to 40 years. Accumulated amortization of goodwill
was $20.0 million and $33.4 million at September 30, 1998 and 1999,
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, 1997, 1998 and 1999 were $0.3 million,
$0.9 million and $1.2 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
component of accumulated other comprehensive income (loss) in stockholders'
equity. The gains and losses resulting from foreign currency transactions are
included in the Company's current results of operations. Transaction gains or
losses in the years ended September 30, 1997, 1998 and 1999 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.

3. RESTRUCTURING CHARGE

     During the third quarter of fiscal 1999 the Company determined that it was
necessary to reevaluate its strategic plan and to take steps to reduce its
outstanding long-term indebtedness with the overall objective of maximizing
shareholder value. In connection therewith, in May, 1999, the Company retained
Salomon Smith Barney as its financial advisor to assist it in reviewing its
existing operations and assessing strategic and financial alternatives. As a
result of these efforts, during the fourth quarter of 1999 the Company
concluded, among other matters, that it should further reorganize its
audiovisual services operations (the "Restructuring") and pursue the possible
sale of one or more of its business operations.

     As a result, in the fiscal quarter ended September 30, 1999, the Company
recorded a pre-tax restructuring charge of $10.8 million. The charge included
$1.5 million of employee termination and severance costs associated with a
further reduction in the workforce of approximately 60 people, $4.0 million
related to lease

                                       26

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. RESTRUCTURING CHARGE--(CONTINUED)

termination and other facility shut-down costs and $5.3 million of computer
software and equipment no longer usable as a result of the reorganization. The
remaining liability at September 30, 1999 was $2.7 million.

     In fiscal 1998, the Company initiated a review of its operations, focusing
on the integration of its businesses as well as the overall management and
organizational structure, which resulted in the initiation of the Restructuring.

     Accordingly, during the fiscal quarter ended March 31, 1998, the Company
recorded a pre-tax restructuring charge of $3.8 million. The charge included
$2.8 million related to employee termination and severance costs associated with
a reduction in the workforce of approximately 155 people and $1.0 million
related to lease termination and other costs. During the fiscal quarter ended
September 30, 1998, the Company recorded an additional pre-tax restructuring
charge of $3.2 million in connection with the continuation of the reorganization
plan begun in March 1998. The charge included $1.0 million related to the
severance and termination costs for approximately 330 people, $0.7 million of
lease termination costs, $1.5 million relating to the write-off of certain
assets and other termination and shut down costs to be incurred during the
Restructuring. The total remaining restructuring liability as of September 30,
1998 was $4.1 million and was fully utilized during fiscal 1999.

4. OTHER COSTS ASSOCIATED WITH REALIGNMENT OF BUSINESS

     During fiscal 1999, the Company recorded additional charges of
$9.9 million related to the Restructuring described in Note 3 but which did not
satisfy the accounting criteria for inclusion in the restructuring charge. These
charges included $6.2 million of additional reserves and write-offs related to
the accounts receivable of the former Atlanta-based audio visual operations. The
accounts receivable charge related primarily to disruptions in certain billing
procedures which the Company believes arose from the Restructuring. Such
accounts receivable related charge is included in selling, general and
administrative expenses in the accompanying financial statements.

     In addition, during fiscal 1999, the Company recorded a non-cash charge of
$3.7 million for audio visual rental equipment losses. The charge was identified
during the Company's reorganization of its audio visual businesses from its
former Atlanta-based audio visual headquarters to the respective business unit
facilities. In accordance with generally accepted accounting principles, as such
charge does not satisfy the criterion for inclusion in the restructuring charge,
it has been included in cost of rental revenue.

5. BUSINESS ACQUISITIONS/DISPOSITIONS

  Fiscal 1997 Acquisitions

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

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

     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

                                       27

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. BUSINESS ACQUISITIONS/DISPOSITIONS--(CONTINUED)


consideration of approximately $11.4 million, which consisted of $8.4 million in
cash paid at closing, $1.0 million placed in escrow to be paid at a later date
upon satisfaction of certain terms and conditions, and the issuance of 76,360
shares of the Company's common stock having a fair market value of approximately
$2.0 million. In addition, the Company repaid approximately $0.6 million in
outstanding indebtedness of Show Solutions at closing.

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

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

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

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

  Fiscal 1998 Acquisitions/Dispositions

     Effective December 1, 1997, the Company acquired the outstanding capital
stock of Visual Action for an aggregate purchase price of $253.0 million
(excluding transaction costs). In addition, the Company assumed approximately
$44.3 million in outstanding indebtedness of Visual Action. Visual Action
provides corporate meeting services, including audiovisual and exhibition
services, in the United States and United Kingdom. The goodwill resulting from
the acquisition of Visual Action is being amortized over 40 years. The cost of
the acquisition, including transaction costs, was financed through the Company's
loan agreement entered into in October, 1997 (see Note 7). Prior to December
1997, the Company had acquired a minority interest through open market purchases
resulting in the equity in income reflected for the period.

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

     In May, 1998, the Company completed the disposition of the broadcast video
services business of Visual Action for approximately $27.6 million in cash,
excluding transaction costs of $2.0 million. In July, 1998, the Company
completed the disposition of the U.K.-based audiovisual staging operations of
Visual Action for approximately $26.7 million in cash. The Company retained the
hotel audiovisual outsourcing services portion of this business, integrating it
with Visual Action's existing U.K. operations. The Company used the cash
proceeds from the sales of the businesses to repay outstanding bank debt. No
gain or loss was recognized on such disposition transactions.

     In addition, during fiscal 1998, the Company made seven additional
acquisitions with an aggregate purchase price of $24.7 million, consisting
principally of cash and shares of the Company's common stock.

                                       28

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. BUSINESS ACQUISITIONS/DISPOSITIONS--(CONTINUED)

  Fiscal 1999 Dispositions

     During fiscal 1999, in connection with the Company's consolidation of hotel
audio visual outsourcing operations in Chicago, and as part of the Company's
periodic review of the purchase accounting accruals, approximately $2.6 million
of liabilities established in connection with certain of the acquisitions
completed in fiscal 1996 and 1997 were identified as excess and reversed.

     Effective June 30, 1999, the Company disposed of its design and
installation business headquartered in Atlanta. A pre-tax loss of $16.5 million
was incurred upon the disposition of the related assets. Total net cash proceeds
of approximately $2.0-$3.0 million are expected upon final accounting of the
disposition.

     The Company accounted for its acquisitions in accordance with the purchase
method and, accordingly, operations of the acquired businesses are included in
the accompanying consolidated statements of operations from their respective
dates of acquisition.

     Certain of the Company's acquisitions have provided for contingent payments
for three years following the purchase based upon the achievement of certain
performance goals relating to revenue, gross profit or earnings before interest,
taxes, depreciation and amortization. Contingent payments are accounted for as
additional purchase price as they become known. During the years ending
September 30, 1997 and 1999, $2.1 million and $4.5 million was paid and/or
accrued as additional consideration with respect to these acquisitions. There
were no such payments made in fiscal 1998.

     The following unaudited consolidated pro forma results of operations of the
Company for the years ended September 30, 1998 and 1999 give effect to the
acquisitions of Visual Action and Right Source, as well as the dispositions of
the Company's broadcast video services unit, its U.K. staging and equipment
rental services unit, and its Atlanta-based design and installation business and
reflect the extraordinary charge resulting from the write-off of unamortized
fees relating to the Company's former bank facilities (see Note 7), as if such
transactions had occurred in each case on October 1, 1997. The other
acquisitions completed by the Company would not have had or did not have, as the
case may be, a significant effect on the Company's results of operations during
the years ended September 30, 1998 and 1999.

<TABLE>
<CAPTION>
                                                                  YEAR ENDED SEPTEMBER 30,
                                                           -------------------------------------
                                                                            1998
                                                           -------------------------------------
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                                        <C>
Revenue.................................................                 $ 695,290
Income before taxes and extraordinary charge............                   (18,527)
Net income..............................................                   (19,942)
Pro forma basic and diluted earnings per common share...                 $   (0.84)

<CAPTION>

                                                                  YEAR ENDED SEPTEMBER 30,
                                                           -------------------------------------
                                                                           1999
                                                          -------------------------------------

<S>                                                        <C>
Revenue.................................................                $ 703,685
Income before taxes and extraordinary charge............                  (38,447)
Net income..............................................                  (39,231)
Pro forma basic and diluted earnings per common share...                $   (1.65)
</TABLE>

     The above calculation of pro forma basic and diluted net income per common
share assumes that approximately 23,616,398 and 23,695,126 shares were
outstanding during 1998 and 1999, respectively.

     The unaudited pro forma consolidated results of operations do not purport
to be indicative of the actual results of operations that would have occurred
had the acquisitions described above been made at the beginning of fiscal 1998
or of results which may occur in the future.

                                       29

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. PROPERTY AND EQUIPMENT

     At September 30, 1998 and 1999 property and equipment consisted of:

<TABLE>
<CAPTION>
                                                                                   AT SEPTEMBER 30,
                                                                         ------------------------------------
                                                                             1998                1999
                                                                         ----------------    ----------------
                                                                                    (IN THOUSANDS)
<S>                                                                      <C>                 <C>
Audiovisual rental and production equipment...........................       $ 85,254            $ 97,274
Furniture and fixtures................................................         13,280               9,363
Information systems...................................................         25,438              24,718
Leasehold improvements................................................         11,670              12,293
Other.................................................................          2,065              10,349
                                                                             --------            --------
                                                                              137,707             153,997
Less--accumulated depreciation and amortization.......................         39,637              53,559
                                                                             --------            --------
                                                                             $ 98,070            $100,438
                                                                             --------            --------
                                                                             --------            --------
</TABLE>

     The related depreciation and amortization expense for the years ended
September 30, 1998 and 1999 was $25.7 million and $28.9 million, respectively.

7. DEBT

     At September 30, 1998 and 1999, long-term debt consisted of:

<TABLE>
<CAPTION>
                                                                                   AT SEPTEMBER 30,
                                                                         ------------------------------------
                                                                             1998                1999
                                                                         ----------------    ----------------
                                                                                    (IN THOUSANDS)
<S>                                                                      <C>                 <C>
Credit Agreement......................................................       $394,500            $425,280
Notes payable.........................................................          1,825               1,415
Other.................................................................            915                 444
                                                                             --------            --------
                                                                              397,240             427,139
Less--current portion of long-term debt...............................          1,000               1,299
                                                                             --------            --------
                                                                             $396,240            $425,840
                                                                             --------            --------
                                                                             --------            --------
</TABLE>

     At September 30, 1999, the carrying amount of the above commitments
approximated fair value.

     On October 28, 1997, the Company entered into a loan agreement with a
syndicate of banks pursuant to which the Company increased its aggregate
available bank financing from $100 million to $550 million, consisting of a
$300 million six year revolving line of credit (the "Revolving Facility") to be
utilized in connection with future acquisitions and for working capital and
general corporate purposes and a $250 million six year term loan ( the "Term
Facility" and together with the Revolving Facility, the "Credit Agreement") to
be utilized in connection with the acquisition of Visual Action. (See Note 5,
Business Acquisitions/Dispositions). The Company recognized an extraordinary
loss of $0.6 million in the quarter ended December 31, 1997 resulting from the
write-off of the unamortized debt issuance fees relating to the Company's former
bank facilities. Approximately $4.8 million in debt issuance fees were incurred
in connection with the Credit Agreement. Such fees are being amortized over the
term of the Credit Agreement.

     In May, 1998, the Company repaid approximately $26 million under the Term
Facility thereby permanently reducing availability thereunder by such amount. In
December, 1998, and July 1999 the terms of the Revolving Facility were amended
to reduce the aggregate availability thereunder from $300 million to $250
million, to amend certain financial covenants contained therein and to increase
the interest rate on amounts outstanding under the Credit Agreement. Fees of
approximately $1.2 million and $1.4 million were incurred in connection with the
amendments made to the Credit Agreement in December, 1998 and July 1999,
respectively. Such fees will be amortized over the remaining term of the Credit
Agreement. As of December 21, 1999, the Company had

                                       30

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

7. DEBT--(CONTINUED)

approximately $447.2 million outstanding under the Credit Agreement. Cash on
hand as of such date was $11.8 million.

     At June 30, 1999, the Company did not achieve certain of the financial
covenants specified in the Credit Agreement. In connection with the amendments
made to the Credit Agreement in July 1999 (the "July 1999 Amendment"), the
lenders waived through March 30, 2000 all defaults that have arisen or may arise
from the failure to satisfy the specified financial covenants for June 30, 1999,
September 30, 1999 and December 31, 1999. As part of such amendment, the Company
agreed, among other things, to revised covenants regarding minimum consolidated
earnings before interest, taxes, depreciation and amortization ("EBITDA"), as
defined in the Credit Agreement for the twelve month periods ending June 30,
September 30 and December 31, 1999, and to restrictions on the amount of
permitted capital expenditures (as defined in the Credit Agreement), for the
three month periods ending September 30 and December 31, 1999.

     At September 30, 1999, the Company was not in compliance with the covenants
set forth in the July 1999 Amendment. On December 23, 1999, the Company obtained
a further amendment (the "December 1999 Amendment") to the Credit Agreement
that, among other things, extended the waivers under the July 1999 Amendment to
October 1, 2000, and waived through October 1, 2000 all defaults arising from
the failure at September 30, 1999 to satisfy the financial covenants specified
in the July 1999 Amendment. As part of the December 1999 Amendment, the Company
agreed to a minimum consolidated adjusted EBITDA covenant that is based on
post-September 30, 1999 consolidated EBITDA (as defined in the Credit
Agreement), and to restrictions on the amount of capital expenditures that may
be made by the Company during the fiscal year ending September 30, 2000. The
minimum required consolidated adjusted EBITDA, as defined, for fiscal 2000
exceeds levels achieved in fiscal 1999.

     In addition to the waivers and revised financial covenants described above,
the December 1999 Amendment provides for the deferral through October 1, 2000 of
the principal payments due under the Term Facility on December 31, 1999 and
March 31, 2000. The December 1999 Amendment also includes a consent by the
lenders that will allow the Company to pursue the possible sale of its
audiovisual businesses, provided that certain timing requirements are met and
minimum net proceeds exceed a specified amount. If such a transaction is
consummated, the Company would be obligated to use the net proceeds, subject to
certain adjustments, to pay down amounts outstanding under the Credit Agreement
and would be subject to revised financial covenants. There can be no assurance
that any such transaction will be entered into or consummated, or that it will
meet the parameters required by the December 1999 Amendment.

     The Company believes it will be able to satisfy the financial and other
covenants included in the Credit Agreement, as amended. Further, the Company
continues to believe it necessary to take actions to reduce its indebtedness
under the Credit Agreement, including the possible sale of one or more of its
operations. In connection therewith, the Company's financial advisor, Salomon
Smith Barney, is assisting the Company in assessing strategic and financial
alternatives. There can be no assurance that the Company will be able to take
such actions or that it will be able to remain in compliance with the financial
covenants specified in the Credit Agreement during the twelve months ending
September 30, 2000. Unless further amendments or waivers were to be obtained
from the lenders, the failure to satisfy the specified financial covenants or
the occurrence of any other event of default under the Credit Agreement, as
amended, would entitle the lenders to, among other things, accelerate the
maturity of the outstanding borrowings under the Credit Agreement, and exercise
all or any of their other rights or remedies. Any such acceleration or other
exercise of rights and remedies would likely have a material adverse effect on
the Company.

     As of December 29, 1999, the Company had approximately $437.2 million
outstanding under the Credit Agreement, of which $237.6 million was outstanding
under the Revolving Facility. Cash on hand at such date was $5.0 million.

                                       31

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

7. DEBT--(CONTINUED)

     Fees of approximately $1.2 million, $1.4 million and $1.0 million were
incurred in connection with the amendments made to the Credit Agreement in
December, 1998, July, 1999, and December 1999, respectively. Such fees will be
amortized over the remaining term of the Credit Agreement.

     The maturity date of each of the Term Facility and the Revolving Facility
is October, 2001. Interest on outstanding amounts under the Credit Agreement 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 applicable
margins are subject to change based on the occurrence of certain events. The
interest rate on the Credit Agreement is presently LIBOR plus 3.25%. The
applicable interst margin is subject to upward adjustment of 0.75% on March 1,
2000 if the Company has not entered into a definitive agreement to sell its
audiovisual businesses by such date and an additional 0.75% on June 1, 2000 if
such transaction has not been consummated by such date.

     Principal on the Term Facility is payable in quarterly installments,
subject to the deferrals described above, with the final scheduled payment due
on October 1, 2001. Subject to reductions in such quarterly installments for any
prepayments made under the Term Facility, at present, the Company will be
required to repay an aggregate of: (i) $17.8 million in fiscal 2000,
(ii) $50.4 million in fiscal 2001 and (iii) 132.4 million in fiscal 2002. The
Company is permitted and intends (to the extent available) to draw on the
Revolving Facility to make certain of the above payments.

     The Credit Agreement is secured by substantially all of the assets of the
Company and its material subsidiaries, and the Company and its subsidiaries have
pledged the stock of their respective subsidiaries for the ratable benefit of
its lending banks. In addition to the financial covenants described above, the
Credit Agreement contains certain other covenants and restrictions customary for
credit facilities of a similar nature, including without limitation,
restrictions on the ability of the Company to pay dividends.

     The aggregate scheduled payments of all long-term debt outstanding at
September 30, 1999 (including amounts outstanding under the Term Facility), for
the next three fiscal years, are as follows: 2000--$19.1 million;
2001--$75.9 million; 2002--$332.1 million; totaling $427.1 million.

8. CAPITAL STOCK

  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
2,500,000 shares of the Company's common stock shall be available for grant,
subject to authorization by the Compensation Committee of the Board of
Directors. The purchase price per share under the Option Plan is the market
price of the common stock on the grant date. Generally, options granted under
the Option Plan vest over a period of three years from the grant date.

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

The Sinclair Options

     In connection with an employment agreement, dated as of December 21, 1998,
between Christopher A. Sinclair and the Company, the Board of Directors approved
the grant to Mr. Sinclair of options to purchase an

                                       32

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. CAPITAL STOCK--(CONTINUED)

aggregate of 600,000 shares of common stock (the "Sinclair Options"), subject to
the approval of the stockholders of the Company.

     The stockholders of the Company approved the grant of the Sinclair Options
at the Annual Meeting of Stockholders held on March 16, 1999. Of the Sinclair
Options, (i) 350,000 options have an exercise price per share of $8.5625, which
was the average of the high and the low reported sale prices of the common stock
on December 21, 1998 ("Option Grants A"), and (ii) 250,000 options have an
exercise price per share of the $15.00 ("Option Grant B"). The market price of
the Company's Common Stock on March 16, 1999, was less than the exercise price
of each of Option Grant A and Option Grant B.

     The Board of Directors granted the Sinclair Options to Mr. Sinclair to
induce him to join the Company as its President and Chief Executive Officer and
to provide additional motivation and incentive for Mr. Sinclair in the
performance of his duties on behalf of the Company beyond the cash compensation
paid pursuant to the terms of his employment agreement with the Company.

     Except for their respective exercise prices, the terms and conditions of
Option Grant A and Option Grant B are identical in all respects. In addition,
although the Sinclair Options were not granted under the 1996 Option Plan,
except for certain terms relating to the vesting and exercise of options upon
resignation or termination from employment, the terms and conditions of the
stock options granted under the 1996 Option Plan have been substantially
incorporated into the terms and conditions of the Sinclair Options.

     As of September 30, 1999, stock options to purchase an aggregate of
1,989,406 shares of Common Stock were outstanding, of which options to purchase
67,426 shares of Common Stock were vested.

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

     The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions:
risk-free interest rate of 5%, 4% and 6% in 1997, 1998 and 1999, respectively; a
dividend yield of 0% in 1997, 1998 and 1999; volatility of 32.7% in 1997, 67.4%
in 1998 and 77.4% in 1999, respectively, and an expected life of 5 years in
1997, 1998 and 1999.

     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 $675,000, or $0.03 per share, $823,000, or
$0.03, and $1,372,000, or $.06 per share, for fiscal years 1997, 1998 and 1999,
respectively.

                                       33

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. CAPITAL STOCK--(CONTINUED)

     A summary of the status of the Company's option plans at September 30, 1999
and activity during the years ended September 30, 1999 is as follows:

<TABLE>
<CAPTION>
                                                       1997                        1998                        1999
                                             ------------------------    ------------------------    ------------------------
                                                 WEIGHTED AVERAGE            WEIGHTED AVERAGE            WEIGHTED AVERAGE
                                             ------------------------    ------------------------    ------------------------
                                             SHARES    EXERCISE PRICE    SHARES    EXERCISE PRICE    SHARES    EXERCISE PRICE
                                             ------    --------------    ------    --------------    ------    --------------
                                                                         (IN THOUSANDS OF SHARES)
<S>                                          <C>       <C>               <C>       <C>               <C>       <C>
Outstanding at beginning of year..........     303         $14.75          737         $23.22        1,048         $21.75
Options granted...........................     461          28.38          561          20.25        2,024           8.68
Options exercised.........................      --             --          (30)         23.38           --             --
Options forfeited/expired.................     (27)         16.14         (220)         23.10       (1,083)         16.06
                                              ----         ------        ------        ------        ------        ------
Options outstanding at end of year........     737          23.22        1,048          21.75        1,989           9.23
                                              ----         ------        ------        ------        ------        ------
Exercisable at end of year................     110          15.84          275          20.69           67          16.52
                                              ----         ------        ------        ------        ------        ------
Weighted average fair value of options
  granted during the year.................                  10.67                       12.00                        5.80
                                                           ------                      ------                      ------
</TABLE>

     A summary of information about stock options outstanding and options
exercisable at September 30, 1999 is as follows (In thousands of shares):

<TABLE>
<CAPTION>
                                                        OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                                           ----------------------------------------------    --------------------------
                                                     WEIGHTED AVERAGE    WEIGHTED AVERAGE              WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES                   SHARES    REMAINING TERM      EXERCISE PRICE      SHARES    EXERCISE PRICE
----------------------------------------   ------    ----------------    ----------------    ------    ----------------
<S>                                        <C>       <C>                 <C>                 <C>       <C>
$6.66 to $8.56..........................   1,600           9.25               $ 7.81            --              --
$14.44 to $20.63........................     384           8.90               $15.71            64          $16.24
$21.875 to $32.78.......................       5           7.48               $21.98             3          $21.94
                                           ------                                             ----
$6.66 to $32.78.........................   1,989           9.18               $ 9.23            67          $16.52
</TABLE>

9. 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,
1997, 1998 and 1999, the Company paid such vendors approximately $0.6 million,
$1.4 million and $2.1 million, respectively.

     Rent paid to related parties during the years ending September 30, 1997,
1998 and 1999 was $0.6 million, $0.6 million and $0.4 million, respectively.

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

10. EMPLOYEE BENEFIT PLANS

     The Company maintains several defined contribution plans covering all
qualified employees. Effective January 1, 1997, the Company began matching $0.25
for each dollar contributed by an employee, up to a maximum of 3% of such
employee's base compensation (subject to applicable limits under the Internal
Revenue Code of 1986, as amended. In addition, the Company continues to maintain
several existing defined contribution plans that it inherited in connection with
its acquisition of Visual Action in December, 1997. Under such plans, the
Company contributes varying amounts ranging from $0.25 to $0.50 for each dollar
contributed by an

                                       34

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

10. EMPLOYEE BENEFIT PLANS--(CONTINUED)

employee to such plan up to a maximum of 4% of base salary. Company matching
contributions during the years ended September 30, 1998 and 1999 totaled
$1.0 million and $1.6 million, respectively.

11. INCOME TAXES

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

     Significant components of the Company's deferred tax assets and liabilities
as of September 30, 1998 and September 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                                                             1998       1999
                                                                            ------    --------
                                                                              (IN THOUSANDS)
<S>                                                                         <C>       <C>
DEFERRED TAX ASSETS:
NOL and tax credit carryforwards.........................................   $1,776    $ 23,900
Accrued interest.........................................................      247         247
Allowance for doubtful accounts..........................................      733         691
Restructuring and other reserves.........................................    4,351       1,791
                                                                            ------    --------
Total deferred tax assets................................................    7,107      26,629
Valuation allowance......................................................     (653)    (14,640)
                                                                            ------    --------
Net deferred tax assets..................................................    6,454      11,989

DEFERRED TAX LIABILITIES:
Tax over book depreciation and amortization..............................    5,293       8,003
Adjustments for differences in basis of acquired assets..................       --       8,000
Amortization of intangibles..............................................      389       3,653
Other....................................................................      410         225
                                                                            ------    --------
Total deferred tax liabilities...........................................    6,092      19,881
                                                                            ------    --------
Net deferred tax liability/(asset).......................................   $ (362)   $  7,892
                                                                            ------    --------
                                                                            ------    --------
</TABLE>

     At September 30, 1999, the Company had net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $54.3 million, of
which, $1.6 million expire in the years 2001 through 2007 and $52.7 million
expire in the year 2019. The Company also has tax loss carryforwards for state
and local tax purposes. A valuation allowance has been recorded to the extent
the Company believes the benefit from the tax loss carryforwards will not be
realized. In addition, approximately $1.6 million of the NOL carryforwards may
be subject to limitations under the change in ownership provisions of the
Internal Revenue Code and 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.

                                       35

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. INCOME TAXES--(CONTINUED)

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

<TABLE>
<CAPTION>
                                                                            1997       1998       1999
                                                                           -------    -------    -------
                                                                                  (IN THOUSANDS)
<S>                                                                        <C>        <C>        <C>
Current:
  Federal...............................................................   $ 7,224    $(2,041)   $(6,052)
  State.................................................................     2,150        831        (58)
  Foreign...............................................................     1,112        280        206
                                                                           -------    -------    -------
          Total current tax.............................................    10,486       (930)    (5,904)
Deferred:
  Federal...............................................................     1,758      1,345     (1,879)
  State.................................................................       352       (992)       858
  Foreign...............................................................       (45)     1,201      1,275
                                                                           -------    -------    -------
          Total deferred tax............................................     2,065      1,554        254
                                                                           -------    -------    -------
Total provision for taxes...............................................   $12,551    $   624    $(5,650)
                                                                           -------    -------    -------
                                                                           -------    -------    -------
</TABLE>

     For fiscal 1999, tax benefit has been recorded to the extent the current
year tax loss can be carried back and for a portion of the tax loss carried
forward.

     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>
                                                                           1997       1998        1999
                                                                          -------    -------    --------
                                                                                  (IN THOUSANDS)
<S>                                                                       <C>        <C>        <C>
Tax expense at statutory rate..........................................   $10,714    $   546    $(20,280)
State income tax expense/(benefit) (net of federal tax)................     1,626       (104)        521
Non-deductible goodwill amortization...................................       483      1,236       5,745
Non-deductible expenses................................................       113        181         587
Losses without benefit.................................................      (645)       (19)     10,478
Rate differential related to foreign operations........................        --     (1,205)     (2,760)
Other..................................................................       260        (11)         59
                                                                          -------    -------    --------
                                                                          $12,551    $   624    $ (5,650)
                                                                          -------    -------    --------
                                                                          -------    -------    --------
</TABLE>

12. SEGMENT INFORMATION

     In accordance with Financial Accounting Standards Board Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information, set forth
below is selected financial information about the Company's reportable operating
segments.

  Description of Segments

     During fiscal 1999, the Company had five reportable segments: the
Communications Division, Hotel Services, Staging and Meeting Services, Rental
Services and Melville Exhibition Services, Ltd. ("MES"). The Communications
Division produces meetings, events and training programs that enable businesses
to inform, sell to and train their sales forces, dealers, stockholders and
employees. Hotel Services provides audiovisual equipment rental services to
hotels via an on-site presence of both equipment and technical support staff.
The Staging and Meeting Services Division is a provider of audiovisual
equipment, technical labor and related staging services to production companies
and other corporations for use during meetings, trade shows, conventions and
presentations. Rental Services is a remote full service provider on an as-needed
basis to local and national

                                       36

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. SEGMENT INFORMATION--(CONTINUED)

corporations, convention centers and smaller hotels. MES provides exhibition
services in the United Kingdom, offering fully integrated services to exhibition
organizers, hall owners, exhibitors and other exhibition contractors.

     During fiscal 1999, the Company reorganized its audiovisual services
businesses into separate operating units: Hotels Services, Staging and Meeting
Services and Rental Services. Prior to fiscal 1999, the Company operated the
audiovisual services businesses on a combined basis. It is impracticable to
furnish separate financial data relating to the fiscal years ended
September 30, 1997 and 1998 in conformity with the current reporting segments
within the audiovisual services group.

  Measurement of Segment Profit or Loss

     The Company evaluates performance based upon revenues, gross profit and
profit or loss from operations before interest, income taxes, depreciation and
amortization ("EBITDA"). The accounting policies of the reportable segments are
the same as those described in Note 2, Summary of Significant Accounting
Policies. Interdivision sales are recorded at the Company's costs; there is no
intercompany profit or loss on interdivision sales.

YEAR ENDED SEPTEMBER 30, 1999 (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                  STAGING &                             TOTAL
                       HOTEL      MEETING      RENTALS                  AUDIO
                      SERVICES    SERVICES     SERVICES    OTHER(B)     VISUAL       MES      COMMUNICATIONS     TOTAL
                      --------    ---------    --------    --------    --------    -------    --------------    --------
<S>                   <C>         <C>          <C>         <C>         <C>         <C>        <C>               <C>
Revenue............   $261,597     $89,390     $ 22,212      22,319    $395,518    $52,049       $302,087       $749,654
Gross Profit.......     52,894       8,149        6,480       8,834      76,357     17,602         90,511        184,470
EBITDA.............     37,142      11,416        4,176      (2,607)     50,127(a)   5,856         23,522         79,505
Segment assets.....     91,089      32,161       13,471          --     136,721     17,329         86,756        240,806
Capital
 expenditures......     21,347       8,962        2,583         196      33,088      1,732         10,591         45,411
</TABLE>

(a) Excludes $8.4 million in costs incurred during fiscal 1999 related to the
    Company's former Atlanta-based audio visual headquarters.

(b) Represents results of operations of the Company's design and installation
    business which was disposed in June, 1999.

YEAR ENDED SEPTEMBER 30, 1998 (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 AUDIO
                                                                 VISUAL       MES      COMMUNICATIONS     TOTAL
                                                                --------    -------    --------------    --------
<S>                                                             <C>         <C>        <C>               <C>
Revenue......................................................   $366,697    $48,243       $296,393       $711,333
Gross Profit.................................................     86,960     18,301         91,882        197,143
EBITDA.......................................................     38,398      7,706         26,240         72,344
Segment assets...............................................    142,154     22,430        107,213        271,797
Capital expenditures.........................................     30,791      1,545         14,118         46,454
</TABLE>

YEAR ENDED SEPTEMBER 30, 1997 (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                AUDIO
                                                                VISUAL       MES       COMMUNICATIONS     TOTAL
                                                               --------    --------    --------------    --------
<S>                                                            <C>         <C>         <C>               <C>
Revenue.....................................................   $131,844    $     --       $213,238       $345,082
Gross Profit................................................     44,959          --         68,258        113,217
EBITDA......................................................     23,237          --         24,065         47,302
Segment assets..............................................     80,386          --         71,859        152,245
Capital expenditures........................................     13,780          --          3,945         17,725
</TABLE>

                                       37

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. SEGMENT INFORMATION--(CONTINUED)

RECONCILIATIONS TO CONSOLIDATED STATEMENT OF OPERATIONS (amounts in thousands)

<TABLE>
<CAPTION>
                                                                                  1999        1998        1997
                                                                                --------    --------    --------
<S>                                                                             <C>         <C>         <C>
Total external revenue for reportable segments...............................   $726,004    $696,777    $342,258
Interdivision revenue for reportable segments................................     23,650      14,556       2,825
Elimination of interdivision revenue.........................................    (23,650)    (14,556)     (2,825)
                                                                                --------    --------    --------
  Total consolidated revenue.................................................   $726,004    $696,777    $342,258
                                                                                --------    --------    --------
                                                                                --------    --------    --------
Total "EBITDA" for reportable segments.......................................   $ 79,505    $ 72,344    $ 47,302
Rental equipment write-downs included in cost of rental revenue..............     (3,700)         --          --
Restructuring charge.........................................................    (10,769)     (6,953)         --
Loss on disposal of assets...................................................    (16,500)         --          --
Reserves/write-offs relating to accounts receivable..........................     (6,167)         --          --
Costs related to the former Atlanta-based audiovisual headquarters...........     (8,407)         --          --
Corporate expenses...........................................................    (13,392)     (1,705)     (1,178)
                                                                                --------    --------    --------
Total consolidated operating income before depreciation and amortization
  expense....................................................................     20,570      63,686      46,124
Depreciation and amortization expense,
  including depreciation in cost of revenue..................................    (43,563)    (37,802)    (13,082)
                                                                                --------    --------    --------
  Total consolidated operating income (loss).................................   $(22,993)   $ 25,884    $ 33,042
                                                                                --------    --------    --------
                                                                                --------    --------    --------
</TABLE>

RECONCILIATIONS TO CONSOLIDATED BALANCE SHEETS (amounts in thousands)
<TABLE>
<CAPTION>
                                                                                 1999         1998         1997
                                                                                 ----         ----         ----
<S>                                                                            <C>          <C>          <C>
Total assets for reportable segments.......................................    $240,806     $271,797     $152,245
Goodwill, net..............................................................     409,204      419,581      157,154
Corporate assets...........................................................       9,459        6,571        4,478
                                                                               --------     --------     --------
   Total consolidated assets...............................................    $659,469     $697,949     $313,877
                                                                               --------     --------     --------
                                                                               --------     --------     --------
</TABLE>

  Foreign Operations

     The Company's foreign operations, principally located in the United
Kingdom, had identifiable assets, including goodwill, of $55.4 million,
$99.4 million and $105.1 million at September 30, 1997, 1998 and 1999,
respectively. Revenues of $52.8 million, $143.9 million and $153.9 million, and
operating profits of $1.5 million, $12.1 million and $10.7 million, related to
the Company's foreign operations are included in the results of operations for
the years ended September 30, 1997, 1998 and 1999, respectively.

13. 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, 2000--$16.1 million; 2001--$13.8
million; 2002--$12.4 million; 2003--$11.2 million; 2004--$9.8 million;
thereafter--$19.7 million; totaling $83.0 million.

     Rent expense charged to operations in fiscal 1997, fiscal 1998 and fiscal
1999 was $6.6 million, $9.4 million and $11.0 million, respectively.

     On March 25, 1999, a purported shareholder class action was filed
in the United States District Court for the Southern District of New York (the
"Southern District") against the Company and certain of its current and former
officers and one of its directors. On May 7, 1999, a purported shareholder class
action substantially identical to the March 25th action was filed in the
Southern District against the Company and the same individuals named in the
March 25th action. Both lawsuits allege, among other things, that defendants
misrepresented the Company's ability to integrate various companies it was
acquiring and alleges violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and various rules promulgated thereunder. The lawsuits seek
unspecified money damages, plus costs and expenses, including attorneys' fees
and expert fees. The Company believes it has meritorious defenses to this action
and intends to defend the lawsuit vigorously. In November, 1999, the Court
issued an order consolidating the lawsuits into a single action and appointing
lead plaintiffs and lead counsel. It is anticipated that an amended consolidated
complaint will be filed by the plaintiffs in early 2000.

     In addition to the litigation described above, from time to time, the
Company is a party to various in legal proceedings incidental to its business.
Although the ultimate disposition of these proceedings is not determinable, in
the opinion of the Company, none of such proceedings has had or is likely to
have a material adverse effect on the Company's results of operations, financial
condition or liquidity.

                                       38

<PAGE>

                         CARIBINER INTERNATIONAL, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

14. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     Interest paid was $2.0 million, $21.9 million and $33.5 million during the
years ended September 30, 1997, 1998 and 1999, respectively. Taxes paid were
$8.1 million and $12.2 million during the years ended September 30, 1997 and
1998 respectively. No taxes were paid during the year ended September 30, 1999.

15. EARNINGS PER COMMON SHARE

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

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

<TABLE>
<CAPTION>
                                                                          1997       1998        1999
                                                                        --------    -------    --------
                                                                            (AMOUNTS IN THOUSANDS,
                                                                           EXCEPT PER SHARE AMOUNTS)
<S>                                                                     <C>         <C>        <C>
Net income for basic and diluted earnings per share:
  Income before taxes and extraordinary charge.......................   $ 30,613    $ 1,559    $(57,943)
  Tax provision......................................................    (12,551)      (624)     (5,650)
                                                                        --------    -------    --------
  Net income before extraordinary charge.............................     18,062        935     (52,293)
  Extraordinary charge...............................................         --       (605)         --
                                                                        --------    -------    --------
  Net income.........................................................   $ 18,062    $   330    $(52,293)
                                                                        --------    -------    --------
                                                                        --------    -------    --------
Weighted average shares of common stock outstanding:
  Weighted average shares of common stock outstanding for basic
     earnings per share..............................................     21,719     23,616      23,695
  Effect of stock options............................................         --         --          --
                                                                        --------    -------    --------
  Weighted average shares of common stock outstanding for diluted
     earnings per share..............................................     21,719     23,616      23,695
                                                                        --------    -------    --------
                                                                        --------    -------    --------
Basic and diluted earnings per share:
  Net income before extraordinary charge.............................   $   0.83    $  0.04    $  (2.21)
  Extraordinary charge...............................................         --      (0.03)         --
                                                                        --------    -------    --------
  Net income.........................................................   $   0.83    $  0.01    $  (2.21)
                                                                        --------    -------    --------
                                                                        --------    -------    --------
</TABLE>

                                       39

<PAGE>

ITEM 9. CHANGES 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 herby incorporated by
reference. See also "Executive Officers and Directors of the Company" set forth
in Item 4A of Part I hereto.

ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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

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

          (2) Financial Statement Schedules.

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

          (3) Exhibits

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

     (b) Reports on Form 8-K

     None.

                                       40

<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 29, 1999.

                                              CARIBINER INTERNATIONAL, INC.
                                                       (Registrant)

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

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
                SIGNATURE                                       TITLE                              DATE
------------------------------------------  ---------------------------------------------   ------------------
<S>                                         <C>                                             <C>

       /s/ CHRISTOPHER A. SINCLAIR          Chairman of the Board, President and Chief       December 29, 1999
------------------------------------------  Executive Officer (Principal Executive
         Christopher A. Sinclair            Officer)


         /s/ ROBERT F. BURLINSON            Executive Vice President and Chief Financial     December 29, 1999
------------------------------------------  Officer (Principal Financial and Accounting
           Robert F. Burlinson              Officer)


          /s/ RAYMOND S. INGLEBY            Director                                         December 29, 1999
------------------------------------------
            Raymond S. Ingleby


            /s/ ERROL M. COOK               Director                                         December 29, 1999
------------------------------------------
              Errol M. Cook


           /s/ BRYAN D. LANGTON             Director                                         December 29, 1999
------------------------------------------
             Bryan D. Langton


            /s/ SIDNEY LAPIDUS              Director                                         December 29, 1999
------------------------------------------
              Sidney Lapidus


          /s/ DAVID E. LIBOWITZ             Director                                         December 29, 1999
------------------------------------------
            David E. Libowitz


        /s/ C. ANTHONY WAINWRIGHT           Director                                         December 29, 1999
------------------------------------------
          C. Anthony Wainwright
</TABLE>

                                       41

<PAGE>

                      [This page intentionally left blank]

<PAGE>

                               INDEX TO EXHIBITS

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

<TABLE>
<CAPTION>
EXHIBIT
NUMBER    DESCRIPTION OF DOCUMENT
------    ---------------------------------------------------------------------------------------------------------
<S>       <C>   <C>
  3.1      --   Restated Certificate of Incorporation of the Company, filed March 15, 1996, with the Secretary of
                State of the State of Delaware (filed as Exhibit 3.1 to the Company's Quarterly Report on
                Form 10-Q for the quarterly period ended March 31, 1996 and incorporated herein by reference).
  3.2      --   Certificate of Amendment to the Restated Certificate of Incorporation of the Company, filed
                March 30, 1998, with the Secretary of State of the State of Delaware (filed as Exhibit 3.2 to the
                Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1998 and
                incorporated herein by reference).
  3.3      --   Third Amended and Restated By-Laws of the Company (filed as Exhibit 3.3 to the Company's Quarterly
                Report on Form 10-Q for the quarterly period ended December 31, 1998 and incorporated herein by
                reference).
    4      --   Specimen of Certificate of Common Stock of the Company (filed as Exhibit 4 to the Company's
                Registration Statement on Form S-1 (Registration No. 33-80481) and incorporated herein by
                reference).
+10.1      --   1996 Stock Option Plan of the Company, as amended (filed as exhibit 10.1 to the Company's Quarterly
                Report on Form 10-Q for the quarterly period ended March 31, 1999 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 Fork 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 (the "Ingleby Employment Agreement"), by and
                between the Company and Raymond S. Ingleby (filed as Exhibit 10.5 to the Company's Registration
                Statement on Form S-1 (Registration No. 33-80481) and incorporated herein by reference).
+10.5      --   Amendment No.1, dated as of October 1, 1998, to the Ingleby Employment Agreement.
+10.6      --   Amendment No. 2, dated as of May 13, 1999, to the Ingleby Employment Agreement.
+10.7      --   Employment Agreement, dated as of December 21, 1998, by and between the Company and Christopher A.
                Sinclair (filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year
                ended September 30, 1998 and incorporated herein by reference).
+10.8(a)   --   Stock Option Agreement, dated as of December 21, 1998, between the Company and Christopher A.
                Sinclair in respect of the grant to Mr. Sinclair of options to purchase an aggregate of 350,000
                shares of common stock of the Company (filed as Exhibit 10.2(a) to the Company's Quarterly Report
                on Form 10-Q for the quarterly period ended December 31, 1998 and incorporated herein by
                reference).
+10.8(b)   --   Stock Option Agreement, dated as of December 21, 1998, between the Company and Christopher A.
                Sinclair in respect of the grant to Mr. Sinclair of options to purchase an aggregate of 250,000
                shares of common stock of the Company (filed as Exhibit 10.2(a) to the Company's Quarterly Report
                on Form 10-Q for the quarterly period ended December 31, 1998 and incorporated herein by
                reference).
+10.9      --   Employment Agreement, dated as of July 25, 1995, by and between Caribiner, Inc. and Brian Shepherd
                (filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended
                September 30, 1996 and incorporated herein by reference).
+10.10     --   Employment Agreement, dated June 9, 1998, by and between the Company and Robert F. Burlinson (filed
                as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
                June 30, 1998).
+10.11     --   Letter Agreement, dated April 1, 1999, by and between the Company and Richard R. Gros.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER    DESCRIPTION OF DOCUMENT
------    ---------------------------------------------------------------------------------------------------------
<S>       <C>   <C>
+10.12     --   Letter Agreement, dated April 29, 1999, by and between the Company and John C. Voaden.
10.13      --   Credit Agreement, dated as of October 28, 1997 (the "Credit Agreement"), among the Company,
                Caribiner, Inc., the several lenders named therein and the Chase Manhattan Bank, as Administrative
                Agent, and Merrill Lynch Capital Corporation, as Syndication Agent (schedules and exhibits
                omitted--the Company agrees to furnish a copy of any schedule or exhibit to the Commission upon
                request) (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year
                ended September 30, 1997 and incorporated herein by reference).
10.14      --   First Amendment and Agreement, dated as of March 31, 1998, to the Credit Agreement (schedules and
                exhibits omitted--the Company agrees to furnish a copy of any schedule or exhibit to the Commission
                upon request) (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal
                year ended September 30, 1998 and incorporated herein by reference).
10.15      --   Second Amendment and Waiver, dated as of December 18, 1998, to the Credit Agreement (schedules and
                exhibits omitted--the Company agrees to furnish a copy of any schedule or exhibit to the Commission
                upon request) (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal
                year ended September 30, 1998 and incorporated herein by reference).
10.16      --   Third Amendment and Waiver, dated as of July 30, 1999, to the Credit Agreement (schedules and
                exhibits omitted--the Company agrees to furnish a copy of any schedule or exhibit to the Commission
                upon request) (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
                quarterly period ended June 30, 1999 and incorporated herein by reference).
10.17      --   Fourth Amendment, Consent and Waiver, dated as of December 23, 1999, to the Credit Agreement
                (schedules and exhibits omitted--the Company agrees to furnish a copy of any schedule or exhibit to
                the Commission upon request.)
10.18      --   Stockholders Agreement, dated as of March 15, 1996, among the Company, Warburg, Pincus Investors,
                L.P. and Raymond S. Ingleby (filed as an exhibit to the Company's Registration Statement on Form
                S-1 (Registration No. 33-80481) and incorporated herein by reference).
   21      --   Subsidiaries of the Company.
   23      --   Consent of Ernst & Young LLP.
   27      --   Financial Data Schedule.
</TABLE>

------------------
  + 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) of the
    requirements to Form 10-K.