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 March 31, 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: 0-24556
                              MARKER INTERNATIONAL
             (Exact name of registrant as specified in its charter)

               Utah                                     87-0372759
 (State or other jurisdiction of                      (I.R.S. Employer
  incorporation or organization)                     Identification No.)

         1070 West 2300 South
         Salt Lake City, Utah                              84119
  (Address of principal executive office)                (Zip Code)

       Registrant's telephone number, including area code: (801) 972-2100

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

           Securities registered pursuant to Section 12(g) of the Act:
                                 Title of Class
                                 --------------
                     Common Stock, par value $.01 per share

         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.    [X]

         The aggregate  market value of voting stock held by  non-affiliates  of
the  Registrant  as of June 30,  1999 (based upon the average of closing bid and
ask prices as of such date) was $4,344,825.

         The number of shares of Common  Stock  outstanding  as of June 30, 1999
was 11,140,577.

                   Documents incorporated by reference: None.


<PAGE>






<TABLE>
                                    FORM 10-K
                              MARKER INTERNATIONAL
                              --------------------
                                TABLE OF CONTENTS
                                -----------------
<CAPTION>
                                     PART I
                                                                                    Page
                                                                                    ----

<S>                                                                                   <C>
ITEM 1              Business..........................................................3


ITEM 2              Properties.......................................................14


ITEM 3              Legal Proceedings................................................15


ITEM 4              Submission of Matters to a Vote of Security Holders..............16

                                     PART II

ITEM 5              Market for the Registrant's Common Equity
                              and Related Stockholder Matters........................17


ITEM 6              Selected Consolidated Financial Data.............................19


ITEM 7              Management's Discussion and Analysis of Consolidated
                              Financial Condition and Results of Operations..........20


ITEM 7A             Quantitative and Qualitative Disclosures about Market Risk.......29


ITEM 8              Consolidated Financial Statements and
                              Supplementary Data.....................................30


ITEM 9              Changes in and Disagreements with Accountants
                              on Accounting and Financial Disclosure.................30

                                    PART III

ITEM 10             Directors and Executive Officers of the Registrant...............31


ITEM 11             Executive Compensation...........................................33


ITEM 12             Security Ownership of Certain Beneficial
                              Owners and Management..................................36


ITEM 13             Certain Relationships and Related Transactions...................36

                                     PART IV

ITEM 14             Exhibits, Consolidated Financial Statement
                              Schedules and Reports on Form 8-K......................40


SIGNATURES...........................................................................48
</TABLE>


<PAGE>


                                     PART I
                                     ------

         This form 10-K contains  forward-looking  statements within the meaning
of that term in the Private  Securities  Litigation  Reform Act of 1995 (Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934).  Additional written or oral forward-looking  statements may be made by
the Company  from time to time,  in filings  with the  Securities  and  Exchange
Commission or otherwise.  Statements  contained  herein that are not  historical
facts are forward-looking statements made pursuant to the safe harbor provisions
referenced above.  Forward-looking  statements may include,  but are not limited
to, projections of revenue, income or loss and capital expenditures,  statements
regarding  future  operations,   financing  needs,   compliance  with  financial
covenants  in loan  agreements,  plans  for  acquisition  or sale of  assets  or
businesses and  consolidation  of operations of newly acquired  businesses,  and
plans  relating  to  products  or  services  of  the  Company,   assessments  of
materiality,  predictions  of future  events  and the  effects  of  pending  and
possible  litigation,  as well as  assumptions  relating  to the  foregoing.  In
addition,  when used in this discussion,  the words  "anticipates,"  "believes,"
"estimates,"  "expects,"  "intends,"  "plans" and variations thereof and similar
expressions are intended to identify forward-looking statements.

         Forward-looking   statements  are  inherently   subject  to  risks  and
uncertainties,  some of which cannot be predicted or quantified based on current
expectations.  Consequently,  future  events and  actual  results  could  differ
materially  from  those  set  forth  in,  contemplated  by,  or  underlying  the
forward-looking  statements  contained  in this  Annual  Report  on  Form  10-K.
Statements in this Annual Report,  particularly in "Item 1. Business,"  "Item 3.
Legal Proceedings," the Notes to Consolidated  Financial Statements and "Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations," describe certain factors, among others, that could contribute to or
cause such  differences.  Other  factors that could  contribute to or cause such
differences include,  but are not limited to, unanticipated  developments in any
one or more of the following areas:  ability to secure  financing,  the rate and
consumer acceptance of new product  introductions,  competition,  the number and
nature of customers and their product orders,  pricing,  foreign  manufacturing,
sourcing  and  sales  (including  foreign  government   regulation,   trade  and
importation  concerns  and  fluctuation  in exchange  rates),  borrowing  costs,
changes in taxes due to changes in the mix of U.S. and non-U.S. revenue, pending
or  threatened  litigation,  the  availability  of key personnel and other risks
factors which may be detailed from time to time in the Company's  Securities and
Exchange Commission filings.

         Readers   are   cautioned   not  to  place   undue   reliance   on  any
forward-looking  statements  contained  herein,  which speak only as of the date
hereof.  The Company  undertakes no obligation to publicly release the result of
any revisions to these  forward-looking  statements  that may be made to reflect
events or  circumstances  after the date hereof or to reflect the  occurrence of
unexpected events.

                                       2


<PAGE>

Item 1.  Business

Recent Events

         Letter of Intent with CT Sports  Holding AG - On March 7, 1999,  Marker
International  ("Marker"  or the  "Company")  signed a letter of intent  with CT
Sports Holding AG, a Swiss company ("CT Sports"),  pursuant to which the Company
will transfer  substantially  all of its assets and certain  liabilities under a
confirmed  chapter 11 plan of reorganization to a newly formed entity ("Newco").
In  exchange,  Marker will  receive a 15% equity  interest in Newco,  subject to
possible  adjustment.  The remaining 85% equity interest in Newco will be issued
to CT Sports in  exchange  for $15  million in cash  (subject  to  reduction  by
$1,025,501 as a result of the consummation of the transactions  under the Marker
Canada,  Ltd.  ("Marker  Canada")  Shareholders  Agreement  described below). CT
Sports is a newly formed entity owned by Tecnica  S.p.A.  and H.D.  Cleven,  the
principal shareholder of the Volkl Group.

         Under the letter of intent, Marker  International,  DNR USA, Inc. ("DNR
USA"), and DNR North America,  Inc. ("DNR North America") are required to file a
petition  for  relief  under  Chapter 11 of the United  States  Bankruptcy  Code
("Chapter  11")  within  14  days  of the  execution  of a  definitive  purchase
agreement.  Following  the execution of the purchase  agreement,  Marker will be
obligated to pay a $1.0 million  break-up fee to CT Sports if the acquisition is
not consummated and (i) Marker consummates any plan of reorganization other than
the plan agreed upon by CT Sports,  or (ii) Marker  consummates  any sale of its
stock or assets other than as contemplated by the purchase  agreement upon terms
more favorable to the  shareholders of Marker (an  "Alternative  Sale").  Marker
will not be obligated to pay the break-up fee if Marker's  failure to consummate
the acquisition is due to (i) circumstances beyond its control, Marker is not in
material  breach of the purchase  agreement  and Marker has not  consummated  an
Alternative  Sale,  or (ii) a  material  breach  by CT  Sports  of the  purchase
agreement. Marker is also required to reimburse CT Sports and its affiliates for
actual costs and expenses  incurred by them in connection  with the  acquisition
unless (i) either the letter of intent or the purchase  agreement is  terminated
in accordance  with terms or as a result of a material  breach by CT Sports,  or
(ii) CT Sports elects to abandon the acquisition.

         The letter of intent  requires a period of exclusivity  and cooperation
from  Marker.  There  are  numerous  conditions  to  CT  Sport's  obligation  to
consummate the acquisition. Such conditions include, but are not limited to, (a)
Newco  entering  into  employment   agreements  with  key  members  of  Marker's
management,  (b)  satisfactory  due diligence,  (c) there not being any material
adverse change in the business of the Company, (d) Marker and CT Sports entering
into  lockup  agreements  with a  majority  of  Marker's  shareholders  and  (e)
acceptable pre-bankruptcy agreements with key creditors.


                                       3

<PAGE>

         Marker  is  currently  in the  process  of  negotiating  the  terms and
conditions of a definitive  purchase agreement with CT Sports and is negotiating
with  certain of its  creditors  in order to satisfy  certain of the  conditions
precedent to the  acquisition.  There can be no assurance that Marker will enter
into a definitive purchase agreement with CT Sports on the terms contemplated in
the  letter of intent or that  Marker  will be able to  satisfy  the  conditions
precedent under any such agreement.

         The  transaction  does not require the  Company's  other  subsidiaries,
including  Marker USA, Marker Japan,  Marker Ltd.,  Marker Austria GmbH ("Marker
Austria"), Marker Canada and Marker Deutschland GmbH ("Marker Germany"), to file
a voluntary  petition for relief under  Chapter 11 and,  therefore,  the Company
currently does not anticipate filing voluntary petitions for these subsidiaries.

         Sale of Marker Canada  Interest - On June 18, 1999,  CT Sports,  Marker
International,  Marker Canada and Lapointe Rosenstein,  as escrow agent, entered
into a shareholders  agreement (the "Shareholders  Agreement") pursuant to which
CT Sports  purchased 200 class "A" shares of Marker Canada for a purchase  price
of Cdn $1.5 million  (U.S.  $1.0  million).  The 200 class "A" shares  represent
66.66% of the outstanding voting and participating  shares of Marker Canada. The
remaining  100 class "A"  shares,  representing  33.33% of the  outstanding  and
voting shares,  are held by the Company.  The purpose of this transaction was to
provide working capital to Marker Canada.

         CT Sports  will hold its 200 shares in the name of and on the behalf of
Marker  International GmbH (in foundation),  which upon formation will be deemed
to be the  shareholder  of such shares.  The purchase  price of Cdn $1.5 million
(U.S.  $1.0 million)  will be deducted from the U.S. $15 million  required to be
contributed by CT Sports to Newco pursuant to the purchase agreement between the
Company and Newco (the  "Asset  Purchase  Agreement").  CT Sports has the option
(the "Option") to require Marker to sell to CT Sports all of Marker's 100 shares
of Marker Canada for a purchase price of Cdn $750,000 (U.S. $0.5 million),  less
all amounts then payable by Marker or any of its  subsidiaries to Marker Canada,
CT Sports or any subsidiary or affiliate of CT Sports. The Option is exercisable
if (i) the  transactions  contemplated  by the Asset Purchase  Agreement are not
consummated  on or  before  December  31,  1999,  (ii)  Marker  or  any  of  its
subsidiaries  is acquired by, merges with or sells all or a substantial  part of
its assets or securities to a person other than CT Sports,  its  subsidiaries or
affiliates,  (iii) Marker makes a motion or application in the bankruptcy  court
to reject the Option,  or (iv) Marker contests the validity or enforceability of
the Option or denies it has any obligations under the Shareholders Agreement.

         In connection with the Shareholders Agreement,  each of Marker, Tecnica
S.p.A.  and the Volkl Group  entered into  distribution  agreements  with Marker
Canada granting Marker Canada the exclusive right to distribute certain products
in Canada for a period of five years.

         License of Apparel  Business - On March 8, 1999, the Company and Marker
Ltd., a  wholly-owned  subsidiary  of Marker,  entered into a license  agreement


                                       4

<PAGE>

granting  Ski  &  Sports  Recreation  Company,  L.L.C.  ("SSRC")  an  exclusive,
worldwide right to manufacture,  market and sell the Company's clothing,  gloves
and luggage products (the "Apparel Business")  utilizing the Marker tradename in
return for royalty payments equal to a percentage of net sales which ranges from
3% to 5%. The initial term of the  agreement is from April 1, 1999 through March
31, 2009 and is  automatically  extended for  additional one year periods unless
sooner terminated by either party in accordance with the agreement.  The Company
has the right to terminate the license  agreement in the event annual sales fall
below a certain level.  In addition,  the Company has an option for the 24 month
period  commencing  on April 1, 1999 and ending on March 31,  2001 to acquire by
assignment  all of the rights of SSRC under the license  agreement for a formula
price based upon earnings  before  interest and taxes as set forth in the Option
and Right of First Refusal Agreement dated March 8, 1999 between the Company and
Marker Ltd. and SSRC. Further,  the Company has a right of first refusal through
March 31,  2002 as to any sale or transfer  of the  business  and assets used by
SSRC for the  manufacture,  sale  and  marketing  of the  Apparel  Business.  In
connection with the license agreement, SSRC agreed to purchase certain assets of
Marker Ltd. for $859,000,  of which  $450,000 was paid at closing,  $204,500 was
due on July 10,  1999 (but  remains  unpaid)  and  $204,500 is due on August 31,
1999. With respect to certain Olympic  inventory,  SSRC agreed to pay 60% to 75%
of the net sales price to the Company as the sales price is received.

         Marker Germany and Marker Austria  Stockholder's  Deficit - As of March
31, 1999,  Marker Germany and Marker  Austria,  on a stand alone  unconsolidated
basis, each had a net stockholder's  deficit.  Under the applicable foreign laws
and  regulations,  in order  to avoid  bankruptcy  proceedings,  these  entities
require additional capital infusions. Marker and CT Sports are in the process of
negotiating  the Asset Purchase  Agreement and debt  restructuring  arrangements
with certain of Marker's  creditors.  If  successful,  these  negotiations  will
result in capital  infusions  which will  increase the  stockholder's  equity of
these entities. There can be no assurance that the Company will be successful in
increasing  stockholder's  equity at a level sufficient to avoid such bankruptcy
proceedings.

         Non-compliance with Debt Covenants / Defaults / Debt Restructuring - As
of March 31, 1999, the Company was not in compliance with a minimum tangible net
worth covenant under a $3.0 million  Canadian Dollar (U.S. $2.0 million) line of
credit  agreement with the Royal Bank of Canada ("Royal Bank").  The Company was
also not in compliance with margin requirements under the same line of credit as
of March 31,  1999.  On June 22,  1999,  the Royal Bank  notified the Company of
several terms and  conditions  that it requires the Company to meet in order for
the Royal Bank to continue to provide  financing to the Company.  The Company is
currently in the process of attempting  to comply with the terms and  conditions
that  the  Royal  Bank has  outlined  in its  letter  and is in the  process  of
negotiating  with a new lender in order to obtain  financing.  In the event that
non-compliance is not cured or waived, the Royal Bank may exercise its rights to
demand payment of all amounts due and/or foreclose on the Company's assets which
are  pledged  as  collateral  under  the  agreement  which  could  also  lead to
cross-defaults  under the Company's other credit  arrangements.  There can be no
assurance  that the  Company  will be able to cure its  non-compliance,  reach a
satisfactory agreement with Royal Bank or secure financing from a new lender.

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
outstanding   balance.   In  the  event  that  an   agreement  is  not  reached,
HypoVereinsbank could proceed to obtain a judgment against the Company and force
the Company into an involuntary  bankruptcy.  There can be no assurance that the
Company will reach a satisfactory agreement with HypoVereinsbank.


                                       5
<PAGE>


         The Company did not make the required interest payments of $125,000 due
in October  1998 and  $125,000  due in April  1999 on the  Series A Bonds.  As a
result,  the  bondholder  has the right to declare the Series A Bonds in default
and  accelerate  the entire  outstanding  balance of $11.4  million plus accrued
interest.  On March 26, 1999, CT Sports entered into a  restructuring  agreement
with the bondholder  which is contingent,  among other things,  Marker  entering
into a definitive  purchase  agreement  with CT Sports.  Under the agreement the
Series A Bonds will be reduced to an aggregate  principal  amount of  $5,750,000
and  payable in four equal  annual  installments  of  $750,000  with  $2,750,000
payable after 5 years. The agreement also requires  interest  payments at 2% per
annum during the first four years,  and thereafter a variable rate not exceeding
the prime  rate on  commercial  loans in Japan  plus 0.5%.  The  agreement  also
requires that certain  personal  guarantees of Eiichi  Isomura on Marker Japan's
debt  obligations  be  satisfied  commencing  on the  sixth  anniversary  of the
bankruptcy court confirming a plan of reorganization.  There can be no assurance
that the  bondholder  will  not  declare  the  Series  A Bonds  in  default  and
accelerate the outstanding balance.

         Subsequent to March 31, 1999 the Company notified M&T Bank and KeyBank,
banks with which the Company had certain foreign exchange arrangements, that the
Company would be unable to utilize its foreign exchange  contracts as originally
intended.  As a result, on May 25, 1999 M&T Bank terminated the foreign exchange
netting agreement (the "Netting  Agreement") dated May 1, 1997 with the Company.
Pursuant to its rights under the Netting Agreement, M&T Bank canceled and closed
out all outstanding  foreign exchange contracts for a loss of $3.7 million as of
May 21, 1999 and demanded immediate payment of this amount. Although the Company
is currently negotiating with M&T Bank to restructure this obligation, there can
be no assurance  that the Company will reach a  satisfactory  agreement with M&T
Bank. In the event that an agreement is not reached, M&T could proceed to obtain
a  judgment  against  the  Company  and force the  Company  into an  involuntary
bankruptcy.  As of  June  30,  1999,  the  aggregate  loss on  foreign  exchange
contracts with M&T Bank and KeyBank totaled approximately $5.1 million. The loss
on the KeyBank  contracts  will  continue to fluctuate as a result of changes in
the exchange rates.

         The Company is not in compliance  with several loan covenants under the
terms and conditions of the revolving  credit  agreement among the Company,  its
U.S. subsidiaries and First Security Bank. On June 14, 1999, First Security Bank
notified the Company that the termination of the Netting Agreement with M&T Bank
constituted  a default  under the revolving  credit  facility.  Also, as of June
30,1999,  the Company's  outstanding  balance on its line of credit exceeded the
available  borrowing  base  for a  period  greater  than  the ten day  mandatory
repayment  period  allowed  under the  revolving  credit  agreement  which  also
constitutes a default. As of July 14, 1999, First Security Bank had not declared
the line of credit in default, but has reserved the right to do so. In the event
that the bank declares the line of credit in default,  the bank can exercise its
rights  to  demand  payment  of all  amounts  due  under  the  revolving  credit
agreement,  foreclose on the  Company's  assets which are pledged as  collateral
under the agreement, or force the Company into an involuntary bankruptcy.  There
can be no assurance that the Company will be able to cure its  non-compliance or
reach a satisfactory agreement with the bank.


                                       6
<PAGE>


         On March 31, 1999,  the Company's DM 58.7 million (U.S.  $32.3 million)
line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank  expired.
HypoVereinsbank  and  Deutsche  Bank AG have  agreed to extend the  credit  line
through August 31, 1999 based on numerous  conditions.  Such conditions include,
but are not limited to, (i) the consummation of the transactions contemplated by
the Asset  Purchase  Agreement  (ii) Marker and CT Sports  entering  into lockup
agreements   with  a  majority   of   Marker's   shareholders   and   acceptable
pre-bankruptcy  agreements  with  key  creditors,  and  (iii)  product  purchase
guarantees  by CT Sports.  There can be no  assurance  that the Company  will be
successful in meeting these conditions.  In the event that the Company is unable
to meet  these  conditions,  the  German  banks  could  terminate  the bank line
immediately and force the Company into an involuntary bankruptcy.

         On January 14, 1999,  the  Company,  in  coordination  with Zions First
National Bank ("Zions")  disposed of its leased snowboard  equipment  through an
auction. The net proceeds of the auction were paid to Zions. The balance of $1.8
million was to be paid  according to the original  terms of the lease.  On March
17, 1999,  the Company  signed an agreement with Zions whereby the Company would
make a lump sum payment of $170,000  on or before July 1 as full  settlement  of
the remaining  lease  obligation of $1.7 million.  On June 30, 1999, the Company
signed a revised  agreement  with Zions whereby the Company paid $30,000 on June
30, 1999,  and must pay the remaining  $140,000 on or before October 1, 1999. In
the event this payment is not made,  the Company  remains  liable for the entire
$1.7 million obligation. There can be no assurance that the Company will be able
to satisfy its  obligation to pay the remaining  $140,000 to Zions by October 1,
1999.

         Although  the  Company is  seeking  to  alleviate  its  current  fiscal
problems  by,  among other  things,  restructuring  the  Company's  obligations,
obtaining additional financing,  entering into the Asset Purchase Agreement with
CT Sports,  and filing a voluntary  petition for relief under  Chapter 11 of the
United  States  Code,  there  can be no  assurance  that  the  Company  will  be
successful  in such  endeavors  or that the  Company  will not be forced into an
involuntary bankruptcy. Accordingly, there is substantial doubt that the Company
will be able to continue as a going concern.

General

         Marker is a leading designer,  developer,  manufacturer and marketer of
alpine ski bindings in North America, Europe and Asia. Marker International is a
holding  company which operates its business  through its  subsidiaries,  Marker
Germany, Marker USA, Marker Japan, Marker Austria and Marker Canada (see "Recent
Events"  regarding the sale of 66.66% of the equity interests in Marker Canada).
Substantially  all of the  Company's  ski  bindings are  manufactured  by Marker
Germany,  which also  distributes  bindings in Germany,  to  subsidiaries of the
Company, and to independent distributors in countries where the Company does not
have a distribution subsidiary.

         In  addition,  prior to September  1998,  Marker  designed,  developed,
manufactured and marketed snowboards, Interface Step-in SystemsTM, traditional


                                       7
<PAGE>


snowboard  bindings and snowboard boots.  Marker operated its snowboard business
through DNR Sportsystem  Ltd. ("DNR  Sportsystem"),  an 80% owned  subsidiary of
Marker AG, a wholly-owned  subsidiary of the Company, and Marker's  wholly-owned
subsidiaries,  DNR USA, Inc. ("DNR USA"),  DNR North  America,  Inc. ("DNR North
America") and DNR Japan Co.,  Ltd.  ("DNR  Japan").  DNR  Sportsystem  designed,
developed and distributed  snowboards and related products. DNR USA manufactured
snowboards for distribution under the Santa CruzTM and MarkerTM brand names. DNR
North America and DNR Japan, through their own sales force, marketed snowboards,
Interface Step-in SystemsTM,  snowboard bindings and boots directly to retailers
in the United  States and Japan,  respectively.  The Company  has  substantially
completed the process of exiting the snowboard business through  dissolution and
sale of its snowboard subsidiaries and related assets. On December 14, 1998, the
Company sold its 80% interest in DNR Sportsystem Ltd. for nominal  consideration
and the elimination of all outstanding  intercompany  balances.  On December 31,
1998, the Company sold the building and land that housed the Company's snowboard
manufacturing  operations  for $3.1 million.  On January 14, 1999, the Company's
leased snowboard  manufacturing equipment was disposed of through an auction and
the net proceeds of the auction were paid to the equipment  lessor.  The Company
has a remaining  obligation of $1.7 million to the lessor,  which is included in
the  liabilities  of  continuing  operations.  The Company is  currently  in the
process  of  collecting  its  remaining  outstanding  snowboard  receivables  of
$171,000,  net of allowance for doubtful  accounts,  as of March 31, 1999, which
will complete the Company's exit from the snowboard business.

         The  Company  was  incorporated  in 1981 under the laws of the State of
Utah. The Company's  principal  executive  offices are located at 1070 West 2300
South, Salt Lake City, Utah 84119 and its telephone number is (801) 972-2100.

Products

         Ski Bindings
         ------------

         The  Company  designs,  develops,   manufactures  and  distributes  ski
bindings  consisting of more than 25 high quality models.  The models range from
high  performance  racing  models,  such as the Logic CP Biometric M9.1 Turbo SC
RacingTM and other top-end  models  featuring the Company's  patented  Selective
Control SystemTM,  BiometricTM  Programmed Upward Release and Comshock PistonTM,
to the children's M9 model. Suggested retail prices in the United States of such
models range from $120 to $395.

         In addition to a ski binding's primary function of attaching a ski to a
ski boot,  the binding serves as a safety  mechanism.  The timing of a binding's
release  mechanism is significant  in both its retention and release  functions.
When a skier applies an amount of force to a ski binding that exceeds the safety
setting of the binding, the binding is designed to release the ski boot from the
ski in order to decrease the risk of injury to the skier.  Therefore,  a binding
must be designed to recognize specific levels of force exerted against it.


                                       8
<PAGE>



         Marker bindings feature LogicTM,  BiometricTM,  Edge Pressure  SystemTM
and Gliding AFDTM technology.  The Company's patented technology tightly couples
the ski boot and binding,  resulting in a binding system that is designed not to
be affected by  contamination  between the ski boot and binding and provide more
power to the ski, less fatigue to the skier.

         Soft Goods
         ----------

         The Company  designed,  distributed  and  marketed  apparel for adults,
gloves  and ski and  non-ski  luggage.  The  Company's  clothing  line  featured
quality,  functional and versatile  performance  wear for year-round  sports and
recreational activities available at a wide range of prices.

         The Company's apparel lines, gloves and luggage were sold year round to
retailers mainly in the United States through Marker Ltd.'s own sales force.

         In October  1995,  Marker Ltd.  was  selected by the Salt Lake  Olympic
Organizing  Committee for the 2002 Olympic  Winter Games  ("SLOC") as a licensee
for the sale of winter  outerwear,  polar  fleece,  luggage  and gloves with the
imprint and  embroidery  of the 2002 Olympic  Winter  Games.  In February  1996,
Marker Ltd. was selected as a licensee for sale of T-shirts,  sweatshirts,  golf
shirts and related  apparel with the imprint and  embroidery of the 2002 Olympic
Winter Games.

         Effective April 1, 1999, the Company  licensed Ski & Sports  Recreation
Company,  L.L.C. to manufacture and sell apparel,  luggage and gloves  utilizing
the Marker trademark. See "Recent Events."

Marketing

         The Company actively  advertises and markets its products.  The Company
spends  the  majority  of  its  advertising  budget  on  advertisements  in  ski
magazines,  such as Skiing  Magazine,  Ski Magazine  and Powder  Magazine in the
United States, and similar magazines in foreign markets.

         To increase brand recognition,  in addition to offering technologically
advanced bindings,  the Company  aggressively  markets the Marker brand name. To
influence  its  presence in retail  shops,  the  Company  devotes  resources  to
maintaining and improving its relationships with retailers and shop personnel so
that they will use Marker products and recommend them to their retail customers.
In this regard,  the Company,  through its sales force,  conducts  in-shop sales
clinics.  In addition,  the  Company,  as part of the United  States  Authorized
Retailer Program,  requires that all authorized retail shops employ a technician
who has been trained and certified by the Company  concerning  the  installation
and adjustment of Marker bindings. Additionally, the Company sells its bindings


                                       9
<PAGE>


to the sales staff of its retailers and to professional skiers at special prices
so that they will be able to  recommend  the  Company's  products as a result of
personal experience.

         To foster the  recognition  of the Marker brand name,  the Company also
establishes  endorsement  relationships  with  national  ski  teams  and  racing
professionals.  These endorsement  contracts typically run from one to two years
and  provide  for a base  payment to the racer,  with  additional  payments  for
placing in a competition.  Racers using and endorsing  Marker bindings have been
among the winners in World Cup,  World  Championship  and Olympic  competitions.
Many of the United  States'  best-known  skiers,  including 1998 Olympic Super G
Gold  medalist  Picabo  Street,  three-time  World Cup Champion and Olympic Gold
medalist Phil Mahre, World Champions Steve Mahre and Tamara McKinney and Olympic
Gold medalist Stein Eriksen,  endorse and use Marker bindings.  Skiers endorsing
and using Marker bindings,  as in prior years,  were very successful in the 1999
Alpine Ski World Championship held in Vail, Colorado in February 1999, winning 4
Gold, 4 Silver and 2 Bronze medals out of 10 events.

         Skiers  endorsing and using Marker bindings also excelled in the season
long 1999 FIS World Cup  competition.  Alexandra  Meissnitzer  of Austria is the
1999 Women's  Overall  World Cup  Champion,  as well as the 1999 World Cup Giant
Slalom and Super G Champion.  Athletes  endorsing and using Marker  bindings won
many World Cup trophies  again in 1999 on the World Cup circuit.  These athletes
scored 24 wins,  finished  second 21 times and finished third 18 times out of 69
World Cup events (33 men, 36 women) in 1999.  The Company  believes that winning
World Cup, World Championship and Olympic competitions at places like St. Anton,
Sestrieres  and Vail  increases  the Company's  visibility  in the  marketplace.
Marker  engineers also use these  competitions as opportunities to work with the
Marker  skiers to develop new products and to test and refine  prototypes,  with
the goal of benefiting skiers of all levels.

Sales

         Approximately  65% of the Company's  total ski binding  orders for each
fiscal year are obtained through its "Pre-Season Sales Program," which runs from
February  1st  through   September  15th.  In  clothing,   luggage  and  gloves,
approximately 75% of the total orders for a fiscal year are obtained during this
period.  The volume of orders is affected by the volume of the retailers'  prior
season's  sales  and  inventory  levels.   Marker  bindings  ordered  under  the
Pre-Season  Sales Program are shipped to retailers  from March through  November
and are recorded by the Company as sales on the date of  shipment.  This results
in the recording of the majority of the Company's annual sales during its second
and  third  fiscal  quarters.   Although  certain  of  Marker's  customers  have
contributed  significantly to the Company's sales, no customer  represented more
than 10% of its sales in any of the last three years.

         Approximately  30% of the Company's  total ski binding  orders for each
fiscal year are obtained through its "Reorder  Program," which includes products
ordered after September 15th and shipped before March 31st of each year.


                                       10
<PAGE>


Bindings sold under the Reorder  Program usually include models in the Company's
existing  inventory  and  products  which will be  discontinued  in the upcoming
season. The success of the Reorder Program primarily affects the Company's third
and fourth fiscal quarter results.

         Approximately  5% of the  Company's  total ski binding  orders for each
fiscal year are obtained through its Shop and Pro Programs,  which offer reduced
pricing on the Company's products to retail ski shop employees,  ski instructors
and  other   professionals   in  the   industry.   The  Company   believes  that
recommendations  from sales persons and professional  skiers can be an important
factor in influencing consumer decisions to purchase a particular binding brand.

         Sales of the Company's snowboard products  historically occurred during
the February 1st through September 15th pre-season period.

Product Development and Intellectual Property

         In order to maintain its  leadership  position and to continue to offer
technologically advanced ski bindings, the Company continues to devote resources
to improving and  developing  its current  products and those it will use in the
future.  The  Company's  research,  development  and design of ski  bindings  is
managed  by  the  Company's  Research  and  Development   Department  (the  "R&D
Department")  at the Company's  plant in  Eschenlohe,  Germany.  The Company has
developed all of its  proprietary  technology used in  manufacturing  Marker ski
bindings.  During fiscal years 1999,  1998 and 1997, the Company's  research and
development expenses from continuing operations were approximately $2.8 million,
$3.0 million, and $3.0 million, respectively.

         Product  development  is a  result  of the  integrated  efforts  of the
Company's R&D,  manufacturing and sales departments,  all of which work together
to  generate  new ideas to be  incorporated  into the  Company's  products.  The
Company  also  regularly  receives  suggestions  from  ski  racers  who  use the
Company's  products.  After the  Company  decides  to use a new  component  in a
product,  the R&D  Department,  with the  assistance of machine shop  personnel,
integrates the  mechanical  process and refines the product design and mechanism
of the developing  product.  Simultaneously with the development of the internal
mechanisms  of its  products,  the Company  usually  engages an outside  firm to
assist in the  determination of colors and the integration of shape with the new
technology.

         The Company has a state-of-the-art laboratory used for testing products
in the  development  stage,  as  well  as  products  currently  on  the  market.
Additionally, the laboratory technicians regularly test products produced by the
Company's competitors.

         The R&D  Department  continually  develops new components for which the
Company may obtain patents.  The Company typically files its patent applications
in the  name of  Marker  International  or the  appropriate  subsidiary.  Patent


                                       11
<PAGE>


applications  have been  filed in the United  States,  Germany,  Japan  and,  in
certain cases, the countries in which the Company's competitors  manufacture ski
bindings.  The Company has filed more than 17 patent  applications over the past
three  years  and   currently  has  over  93  families  of  patents  and  patent
applications  covering its  technology  filed in numerous  countries  around the
world,  of which  over 29 are  devoted  to  technology  currently  in use by the
Company. In addition, the Company owns 56 applied and registered trademarks,  of
which 21 are used for our current product line.

         The Company has been involved in patent  disputes with its  competitors
in the past. In connection with the resolution of such disputes, the Company has
negotiated  settlements  which  include  cross-licensing   agreements  involving
certain  technology  believed  by the  Company to be  significant.  Based on the
Company's  analysis of its  competitors'  products,  the Company believes it may
have present patent infringement  claims. The Company has not determined whether
to pursue any such claims,  nor is there any assurance  that if so pursued,  the
Company would be successful on the merits.

         The  Company   markets  its  products  under  a  number  of  trademarks
registered in various countries  throughout the world. The Company believes that
the   MARKER   trademark   is   widely   known  as   identifying   high-quality,
high-technology  ski  bindings  and is  deemed  to be a  valuable  asset  of the
Company.  The  Company  is  not  aware  of any  third  party  violations  of its
trademarks.

Competition

         The Company  competes on the basis of the  quality,  technology,  brand
name recognition and performance of its ski bindings and related products. Other
competitive factors include marketing and distribution methods, customer service
and the management of sales promotion activities.

         The Company devotes  resources to establishing  and maintaining  strong
relationships with retailers and shop personnel through sales clinics, technical
training and certification, and discounted prices to shop personnel. The Company
believes that its strong  relationship  with retailers and shop personnel  gives
the Company's ski products  advantageous  shelf space in certain  retail outlets
and recommendations from shop personnel.

         The Company's primary competitors are Salomon, Tyrolia/Head,  Rossignol
and ESS/Atomic.  Certain of the Company's  competitors offer other ski equipment
in addition to ski bindings. Based upon market surveys of the alpine ski binding
market in the United States  (computed in dollars),  the Company  estimates that
its share of the alpine ski binding market was more than 45% for the 1998/99 ski
season. Foreign market surveys available to the Company indicate that its alpine
ski  binding  market  share for such  period  was more than 40% in  Germany  and
approximately 20% in Japan.


                                       12
<PAGE>


         Due to existing  technological and manufacturing  barriers,  as well as
the difficulty of overcoming lack of brand recognition and quality concerns, the
Company does not anticipate the entry of significant  new  competitors  into the
ski binding market.

Raw Materials

         The Company requires  various readily  available metals and plastics to
manufacture  its ski bindings.  The Company  furnishes  its  suppliers  with the
tooling for the metals and  moldings for the plastics  used in  production.  The
suppliers then provide the Company with the required parts. The Company believes
it is not  dependent on any one  supplier or any group of suppliers  for the raw
materials necessary to manufacture its bindings.

Seasonality

         The Company's  business is seasonal in nature and results of operations
vary from quarter to quarter.  Orders for the Company's  products from retailers
and  distributors  are the highest  during the Company's  first fiscal  quarter,
which ends June 30. The Company  ships its  products to fill those  orders,  and
records  significant  sales,  during its second and third fiscal  quarters.  The
Company collects a substantial  portion of its receivables  during its third and
fourth fiscal quarters.

Working Capital

         Historically,  the Company  satisfied  its working  capital  needs from
credit  facilities  obtained from banks as addressed in Management's  Discussion
and Analysis,  set forth in Item 7, below. The Company  currently has inadequate
working  capital to fund  operations and service  repayment of debt (see "Recent
Events").

Employees and Labor Relations

         As of March 31,  1999,  the Company  had 530  full-time  and  part-time
employees. Subsequent to March 31, 1999, the Company reduced its headcount by 95
employees  through a  severance  program.  The  severance  program is part of an
overall restructuring plan that the Company is in the process of implementing in
order  to  reduce  its  cost  structure.  None of the  Company's  employees  are
unionized.  In  Germany,  where  approximately  335  individuals  are  currently
employed by the Company, the employees are represented by a worker's council. As
required  by German law,  one of the  council  members is paid by the Company to
represent the interests of the workers.  The Company believes that its relations
with its employees are good.

                                       13
<PAGE>

Regulations

         Federal,  state and local  environmental  regulations have not had, and
are not expected to have,  any material  adverse  effect upon the  expenditures,
earnings or competitive position of the Company.

Foreign and Domestic Operations and Exports

         Information regarding the Company's operations and assets by geographic
region for the fiscal years ended March 31, 1999,  1998 and 1997 appears in Note
12 of the Notes to Consolidated Financial Statements contained herein.

Item 2.  Properties

         The Company  owns its 57,000  square  foot  combined  headquarters  and
western United States  distribution  facility  located in Salt Lake City,  Utah,
which  was   constructed  in  fiscal  1995.  The  Company's   headquarters   and
distribution  facility is for sale. The Company also leases an 8,600 square foot
warehouse in  Manchester,  New  Hampshire  for use as its eastern  United States
distribution hub. The Company believes that the New Hampshire warehouse space is
adequate to meet the needs of the Company's eastern customers.

         Marker  Germany  leases a 124,146  square  foot  office,  research  and
development and manufacturing  facility in Germany.  Nearly all of the Company's
binding products are manufactured at this facility which houses  technologically
advanced production and quality assurance  machinery.  The Company believes that
the facility is well suited to meet the  manufacturing  needs of the Company and
is presently utilized at approximately 65% of total capacity.  The lease for the
manufacturing facility expires in 2012.

         Marker  Japan  leases  three  offices  in Japan  from  which  sales and
distribution activities are directed. These offices are located in the cities of
Tokyo,  Sapporo and Osaka and comprise  approximately  3,500, 500 and 675 square
feet,  respectively.  In  addition,  Marker  Japan  leases  warehouse  space for
inventory  storage in Tokyo and Osaka  totaling  approximately  12,900 and 1,075
square  feet,  respectively.  Management  believes  that  these  facilities  are
suitable for the required operational needs of Marker Japan.

         The Company owned a 56,608 square foot snowboard manufacturing facility
located on  approximately  five acres of land it owned adjacent to the Company's
headquarters  in Salt Lake City.  On December  31,  1998,  the Company  sold the
building and land that housed the Company's snowboard  manufacturing  operations
for $3.1 million.


                                       14
<PAGE>


         During  fiscal  year  1999,  the  Company  leased a 4,700  square  foot
facility in  St-Laurent,  Quebec,  to house sales and  administration  staff for
Marker  Canada.  Warehouse  space in Canada  is  leased as needed  from a public
warehouse.

Item 3.  Legal Proceedings

         On March 22,  1999,  Pierro G.  Ruffinengo  filed a breach of  contract
lawsuit  against the Company and certain of its  officers  and  directors in the
Third  Judicial  District  Court in Salt Lake City,  Utah.  The  plaintiff,  who
provided  legal and  consulting  services to the Company  from 1982 to 1998,  is
claiming  monetary  damages and also  claiming an ownership  interest in several
patents.  The Company is currently involved in settlement  negotiations with Mr.
Ruffinengo. Based on a review of the current facts and circumstances, management
has provided for what is believed to be a reasonable estimate of the exposure to
loss  associated  with this matter.  There can be no assurance  that the Company
will reach a satisfactory settlement with the plaintiff.

         On May 11, 1999, Marker was served with a subpoena to provide documents
and  records to a Grand  Jury in the  United  States  District  Court,  Northern
Division for District of Utah. The subpoena requests documents and records to be
produced  regarding  certain  individuals  with  respect  to The Salt  Lake City
Olympic  Organizing  Committee,  Salt Lake City  Olympic Bid  Committee  and the
International Olympic Committee.  The Company believes that it has submitted all
the  required  documentation.  Although  to date the  Company  has not  received
additional  correspondence  from either The Salt Lake City Olympic  Organization
Committee,  the Salt Lake City Olympic Bid Committee,  the International Olympic
Committee or the Grand Jury  regarding  this  matter,  there can be no assurance
that these matters will not be pursued further.

         In September 1995, the Company,  along with other significant companies
in its  business,  received a letter from the  Department of Justice (the "DOJ")
explaining  that the  pricing  practices  of the  various  companies  in the ski
industry  were being  reviewed.  Although to date the  Company has not  received
additional  correspondence  from the DOJ, there can be no assurance that the DOJ
will not pursue these matters further.

         In the  opinion of the  Company,  neither  the  Company  nor any of its
subsidiaries  is currently a party to or subject to any other  material  pending
legal  proceedings.  However,  the  Company is not in  compliance  with  certain
financial  covenants and in default under its  obligations to certain  creditors
(see  "Business - Recent  Events").  Any legal  proceeding  resulting  from such
non-compliance  and such defaults  would have a material  adverse  effect on the
Company's ability to continue its operations.

         The nature of the sport of skiing entails inherent risks of injury.  It
is  expected  that the  Company  from time to time will be subject to claims and
lawsuits  as a result of the nature of its  businesses.  The  Company  maintains
insurance that it believes  meets  industry  standards to protect itself against
product  liability claims.  The adequacy of the insurance  coverage and reserves
established  by the Company to cover  known,  as well as incurred  but  unknown,
product liability claims are evaluated at the end of each fiscal year. There can


                                       15
<PAGE>


be no  assurance,  however,  that such  coverages or reserves will be sufficient
protection against any future legal proceedings (including any related payments,
settlements or costs).

Item 4.  Submission of Matters to Vote of Security Holders

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year covered in this report.



                                       16
<PAGE>




                                     PART II

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

         The Company's  common stock traded on the Nasdaq  National Market under
the symbol  "MRKR" until October 28, 1998.  The  following  table sets forth the
high and low closing sale prices of the common stock,  as reported by the Nasdaq
National Market, for the calendar periods indicated, in dollars:

                           Quarter Ended               High              Low
                           -------------              ------            -----
                        1997
                        ----
                           March 31                 $   5.75         $   4.13
                           June 30                      4.88             2.75
                           September 30                 7.25             3.13
                           December 31                  5.63             3.41
                        1998
                        ----
                           March 31                     4.50             3.13
                           June 30                      3.69             1.63
                           September 30                 2.13              .38


         From October 29,  1998,  until the date hereof,  the  Company's  common
stock has been quoted on the  over-the-counter  bulletin  board.  The  following
table sets forth the high and low closing prices of the common stock,  as quoted
on the over-the-counter  bulletin board, for the calendar periods indicated,  in
dollars.

                         Quarter Ended                 High              Low
                         -------------                ------            -----
                        1998
                           December 31             $   1.13          $   .42
                         1999
                           March 31                     .78              .42
                           June 30                      .59              .25


         Such  over-the-counter  market quotations reflect  inter-dealer prices,
without  retail  mark-up,  mark-down  or  commission  and  may  not  necessarily
represent actual transactions.

         Based upon  information  available  from the  Company's  registrar  and
transfer  agent,  the  Company  estimates  that  at June  30,  1999  there  were
approximately 1,800 holders of record of the Company's common stock.


                                       17
<PAGE>

Dividend Policy

         No dividends  have been  declared on the  Company's  common stock since
1984 and the Company does not anticipate paying any dividends in the foreseeable
future.  It is the present  intention  of the Board of  Directors  to retain all
earnings for working capital purposes.

                                       18
<PAGE>


Item 6.  Selected Consolidated Financial Data

         The following  consolidated  financial  information is provided for the
last five fiscal  years.  The  information  is qualified in its entirety by, and
should be read in conjunction  with, the Consolidated  Financial  Statements and
Notes thereto included herein (in thousands, except per share data and notes).
<TABLE>
<CAPTION>
                                                            Consolidated Income Statement Data for Fiscal Year Ended March 31,
                                                           ---------------------------------------------------------------------
                                                              1999            1998           1997          1996           1995
                                                           ---------       ---------      ---------     ---------      ---------
<S>                                                        <C>             <C>            <C>           <C>            <C>
Net sales                                                  $  74,167       $  81,401      $  83,076     $  87,911      $  83,962
Cost of sales                                                 54,638          54,460         50,441        52,608         48,878
                                                           ---------       ---------      ---------     ---------      ---------
Gross profit                                                  19,529          26,941         32,635        35,303         35,084
                                                           ---------       ---------      ---------     ---------      ---------
Operating expenses:
   Selling                                                    15,275          13,065         14,730        14,592         13,049
   General and administrative                                 15,401           7,475          8,616        10,559          9,314
   Research and development                                    2,756           3,003          2,996         2,762          2,349
   Warehousing and shipping                                    2,020           1,660          1,617         1,566          1,455
                                                           ---------       ---------      ---------     ---------      ---------
      Total operating expenses                                35,452          25,203         27,959        29,479         26,167
                                                           ---------       ---------      ---------     ---------      ---------
Operating (loss) income                                      (15,923)          1,738          4,676         5,824          8,917
                                                           ---------       ---------      ---------     ---------      ---------
Other income (expense):
   Interest expense                                           (6,637)         (5,746)        (5,109)       (5,193)        (4,999)
   Other, net                                                  1,508              33          2,814         2,072          1,584
                                                           ---------       ---------      ---------     ---------      ---------
      Total other income (expense)                            (5,129)         (5,713)        (2,295)       (3,121)        (3,415)
                                                           ---------       ---------      ---------     ---------      ---------
(Loss) income from  continuing  operations
   before  income taxes and  cumulative
   effect of accounting change                               (21,052)         (3,975)         2,381         2,703          5,502
Provision for income taxes                                    (1,458)         (1,158)          (700)         (609)        (1,395)
                                                           ---------       ---------      ---------     ---------      ---------
(Loss) income from continuing operations before
   cumulative effect of accounting change                    (22,510)         (5,133)         1,681         2,094          4,107
Cumulative effect of accounting change, net of tax               --              --             --           (266)           --
                                                           ---------       ---------      ---------     ---------      ---------
(Loss) income from continuing operations                     (22,510)         (5,133)         1,681         1,828          4,107
                                                           ---------       ---------      ---------     ---------      ---------
Discontinued operations:
  (Loss) income from operations of discontinued
     snowboard business, net of income taxes                  (1,484)        (12,196)         2,921         1,595            --
  Loss on disposal of snowboard business                     (24,024)            --             --            --             --
                                                           ---------       ---------      ---------     ---------      ---------
(Loss) income from discontinued operations                   (25,508)        (12,196)         2,921         1,595            --
                                                           ---------       ---------      ---------     ---------      ---------
Net (loss) income                                          $ (48,018)      $ (17,329)     $   4,602     $   3,423      $   4,107
                                                           =========       =========      =========     =========      =========
Net (loss) income applicable to common shares              $ (48,187)      $ (17,329)     $   4,602     $   3,423      $   3,653(1)
                                                           =========       =========      =========     =========      =========
Net (loss) income per common share:
     Basic                                                 $   (4.33)      $   (1.56)     $    0.45     $    0.41(2)   $    0.50
                                                           =========       =========      =========     =========      =========
     Diluted                                               $   (4.33)      $   (1.56)     $    0.45     $    0.40(2)   $    0.50
                                                           =========       =========      =========     =========      =========
</TABLE>
         -------------
 (1) Net income applicable to common shares reflects the following  transactions
as if they  occurred on April 1, 1993 (the  beginning of fiscal  1994):  (a) the
exchange of Series A preferred stock (including the premium thereon) for 378,572
shares of Common  Stock  resulting  in the  elimination  of  dividends  totaling
approximately $87,000 and $387,000 for the fiscal years ended March 31, 1995 and
1994,  respectively,  (b) the  exchange  of Series A-1,  A-2 and A-3  redeemable
preferred stock for $19 million  aggregate  principal  amount of Series A-1, A-2
and A-3 bonds  resulting in the  treatment of dividends  totaling  approximately
$454,000 and  $1,416,000  as interest  expense net of the related tax effect for
the fiscal years ended March 31, 1995 and 1994, respectively,  and (c) the 3,604
to 1 stock split of the Company's outstanding Common Stock.

 (2) For the  fiscal  year  ended  March  31,  1996,  the  cumulative  effect of
accounting  change (CEC)  decreased net income per common share $0.03 per share.
This  resulted in diluted net income per common  share  before CEC of $ 0.43 and
after CEC of $ 0.40.

                                       19
<PAGE>


<TABLE>
<CAPTION>
                                                       Consolidated Balance Sheet Data at March 31,
                                                       --------------------------------------------
                                            1999             1998            1997             1996            1995
                                         ---------        ---------       ---------        ---------       ---------
<S>                                      <C>              <C>             <C>              <C>             <C>
Current assets                           $  47,082        $  77,614       $  78,271        $  64,592       $  66,856
Total assets                                58,973          105,120         117,140           87,265          82,998
Current liabilities                         81,941           70,868          57,146           51,045          44,930
Long-term debt, net of
   current maturities                        3,821           14,898          16,487            5,452           6,244
Series A Bonds, net of
   current maturities                          --             5,500          10,000           10,000          13,500
Minority Interest                              --             1,447           1,810              --              --
Redeemable preferred stock                   3,000              --              --               --              --
Total shareholders'
   equity (deficit)                        (29,789)          12,407          31,697           20,768          18,324
</TABLE>


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

Overview

         Marker  incurred a net loss of $48.0  million  for the year ended March
31, 1999, and as of March 31, 1999 had a shareholders'  deficit of $29.8 million
(see Note 1 to the consolidated financial statements). The Company currently has
inadequate working capital to fund operations and service repayment of debt. The
Company is not in  compliance  with certain  financial  covenants and in default
under its  obligations to certain  creditors (see "Business - Recent Events" and
"Liquidity and Capital Resources"). Accordingly, there is substantial doubt that
the Company will be able to continue as a going concern. Although the Company is
seeking to  alleviate  its current  fiscal  problems  by,  among  other  things,
restructuring  the  Company's   obligations,   obtaining  additional  financing,
entering  into a  purchase  agreement  with CT Sports,  and  filing a  voluntary
petition for relief under Chapter 11 of the United States Code,  there can be no
assurance  that the Company  will be  successful  in such  endeavors or that the
Company will not be forced into an involuntary bankruptcy.

         Marker is a leading designer,  developer,  manufacturer and marketer of
alpine ski  bindings  in the North  America,  Europe and Asia.  The Company is a
holding company which operates through its subsidiaries,  Marker Germany, Marker
USA,  Marker Japan,  Marker  Austria and Marker  Canada (see  "Business - Recent
Events"  regarding the sale of 66.66% of the equity interests in Marker Canada).
Substantially  all of the  Company's  ski  bindings are  manufactured  by Marker
Germany,  which also distributes  bindings in Germany, and sells to subsidiaries
of the Company and to independent  distributors  in countries  where the Company
does not have a distribution subsidiary. Each of Marker USA and Marker Japan has
an independent  sales force and marketing  department for sales and marketing of
bindings and related  parts  directly to  retailers in the United  States and to
both retailers and wholesalers in Japan, respectively. In January 1998, Marker


                                       20
<PAGE>

Canada began its own distribution of Marker ski bindings and snowboard equipment
along with other brand name sporting  equipment,  including,  Tecnica ski boots,
in-line  skates,  trekking  boots and Volkl  skis and tennis  equipment.  Marker
Austria   distributes  the  Company's  ski  bindings  into  Austria  through  an
independent sales force.

         Until  March 1999,  Marker  Ltd.,  also a  subsidiary  of the  Company,
designed,  distributed and sold to retailers the Company's clothing,  gloves and
luggage products for skiing and other recreational activities. On March 8, 1999,
Marker  and  Marker  Ltd.  entered  into a license  agreement  granting  SSRC an
exclusive,  worldwide  right to  manufacture,  market  and  sell  the  Company's
clothing,  gloves and luggage  products (the "Apparel  Business")  utilizing the
Marker name in return for royalty  payments  equal to a percentage  of net sales
which  ranges  from 3% to 5%.  Marker  has the right to  terminate  the  license
agreement in the event annual net sales fall below a certain level. In addition,
Marker and Marker  Ltd.  may,  at any time  before  March 31,  2001,  acquire by
assignment  all of the rights of SSRC under the license  agreement for a formula
price based upon earnings  before interest and taxes.  Further,  the Company has
the right of first refusal  through March 31, 2002 as to any sale or transfer of
the business and assets used by SSRC for the manufacture,  sale and marketing of
the Apparel Business.  In connection with the license agreement,  SSRC purchased
certain  assets  of Marker  Ltd.  for  $859,000  of which  $450,000  was paid at
closing,  $204,500  is due on July 10,  1999 and  $204,500  is due on August 31,
1999.

         In addition, prior to September 1998, the Company designed,  developed,
manufactured and marketed snowboards,  Interface Step-in SystemsTM,  traditional
snowboard  bindings and  snowboard  boots.  The Company  operated its  snowboard
business through its 80% owned subsidiary, DNR Sportsystem, and its wholly-owned
subsidiaries,  DNR  USA,  DNR  North  America  and DNR  Japan.  DNR  Sportsystem
designed,  developed and distributed  snowboards and related  products.  DNR USA
manufactured  snowboards  for  distribution  under the Santa CruzTM and MarkerTM
brand names.  DNR North  America and DNR Japan,  through their own sales forces,
marketed snowboards,  Interface Step-in SystemsTM,  snowboard bindings and boots
directly to retailers in the United States and Japan, respectively.

         The  Company  has  substantially  completed  the process of exiting the
snowboard  business through  dissolution and sale of its snowboard  subsidiaries
and related  assets.  On December 14, 1998, the Company sold its 80% interest in
DNR Sportsystem for nominal consideration and the elimination of all outstanding
intercompany  balances.  On December 31, 1998, the Company sold the building and
land that  housed the  Company's  snowboard  manufacturing  operations  for $3.1
million.  On January 14, 1999,  the  Company's  leased  snowboard  manufacturing
equipment was disposed of through an auction and the net proceeds of the auction
were paid to the  equipment  lessor.  The Company has a remaining  obligation of
$1.7 million to the lessor,  which is included in the  liabilities of continuing
operations.  The Company is currently in the process of collecting its remaining
outstanding  snowboard  receivables  of $171,000,  net of allowance for doubtful
accounts,  as of March 31, 1999, which will complete the Company's exit from the
snowboard  business.  For the year ended March 31, 1999, the Company  recorded a
loss from discontinued  operations of approximately $25.5 million.  This loss is
based upon management's current estimates regarding the ultimate realization


                                       21
<PAGE>


from the sale of remaining  assets and the settlement of liabilities on disposal
of the snowboard  operations.  However,  actual  results could differ from those
estimates.

         In order to decrease inventory levels,  the Company  temporarily ceased
binding  production at its ski binding  manufacturing  facility in Germany as of
November 16, 1998. The Company resumed binding  production on April 6, 1999. The
Company's  manufacturing  facility received financial assistance from the German
government  which partially offset expenses that were incurred during the period
that the  production  assembly  line was  closed.  In  connection  with a German
government  program,  the  German  government  compensated  employees  who  were
affected by the  shutdown of the assembly  line while the Company paid  employee
taxes and all other fixed  costs  associated  with the factory  during this time
period.

         Marker Germany receives payment primarily in German Marks ("Marks") for
ski bindings sold. For subsidiaries of the Company  (principally  Marker USA and
Marker Japan), Marker Germany may allow payment for ski bindings sold to be made
in the functional currency of the subsidiary. Marker Germany or the distribution
subsidiary,  as  applicable,  routinely  enters into  forward  foreign  exchange
contracts with financial institutions in order to fix the cost of converting the
functional  currency to Marks.  Sales prices for the ski bindings offered to the
subsidiaries  and  ultimately  the price the  subsidiaries  receive  from  their
customers is based upon,  among other  things,  market  conditions  and the rate
afforded  by  the  forward  foreign   exchange   contracts.   Accordingly,   the
relationship  of the  exchange  rate  between  the  functional  currency  of the
subsidiary  and the Mark has a direct impact on the cost of the products sold by
the distribution subsidiary.

         From fiscal 1996 to fiscal 1997 and fiscal 1997 to fiscal  1998,  based
upon forward foreign exchange contracts entered into by the Company,  the United
States dollar ("Dollar") increased in value 2.1% and 2.7%, respectively, against
the Mark.  During the same  periods,  based upon forward  foreign  exchange rate
contracts  entered  into by the Company,  the Japanese yen ("Yen")  increased in
value 2.7% and decreased by 15.6% respectively,  against the Mark. Assuming that
foreign  exchange rates between the Dollar and the Mark, and between the Yen and
the Mark, had remained  constant from fiscal 1996 to fiscal 1997 and fiscal 1997
to  fiscal  1998,   the  Company's   cost  of  sales  would  have  increased  by
approximately  $0.7 million and  decreased by $0.7  million,  respectively.  For
fiscal 1999, the Company due to cash flow  constraints was unable to effectively
utilize its foreign exchange  contracts.  As a result,  the Company recorded its
purchases at the spot rate at the applicable transaction dates.

         In  accordance  with  United  States  generally   accepted   accounting
principles, upon consolidation of the Company's financial statements, the income
and expense items of the Company's  foreign  subsidiaries  are translated at the
weighted  average  rates of exchange  prevailing  during the period.  Therefore,
Marker's results of operations are subject to translation  risks and can vary as
a result of fluctuations in the exchange rates between the functional currencies
of such foreign subsidiaries and the Dollar.


                                       22
<PAGE>


         In addition,  upon consolidation of the Company's financial statements,
the assets and liabilities of the Company's foreign  subsidiaries are translated
into Dollars  from their  functional  currencies  at the rate of exchange on the
last  day of the  fiscal  year.  Therefore,  Marker's  consolidated  assets  and
liabilities  may vary as a result of  fluctuations in the exchange rates between
the  functional  currencies  of such foreign  subsidiaries  and the Dollar.  The
resulting  translation   adjustments  from  foreign  currency  fluctuations  are
recorded  in  shareholders'  equity  as  accumulated  other  comprehensive  loss
adjustments.

         The Company's  business is seasonal in nature and results of operations
vary from quarter to quarter.  Orders for the Company's  products from retailers
are highest  during the  Company's  first  fiscal  quarter,  which ends June 30.
During its second and third fiscal  quarters,  the Company ships its products to
fill those orders,  and records a significant  portion of its annual sales.  The
Company then collects a substantial  portion of its receivables during its third
and fourth fiscal quarters.  In accordance with industry practice, a substantial
portion of the Company's accounts receivable remains outstanding for five to six
months and a small percentage  remains  outstanding for up to ten months.  These
factors  result in variations in the  Company's  results of operations  and cash
flows.

Results of Continuing Operations

Fiscal 1999 Compared to Fiscal 1998

         Net sales  decreased 8.9% in fiscal 1999 to $74.2 million,  compared to
$81.4 million in fiscal 1998. The decrease in sales is primarily attributable to
unseasonably warm weather in the United States during the fall and winter months
and lower sales to independent distributors in Asia and Europe due to an overall
market decline.

         Gross profit for fiscal 1999 decreased to $19.5 million,  and decreased
as a percentage of sales to 26.3%, compared to $26.9 million, or 33.1% of sales,
for fiscal 1998. The decrease in gross profit percentage primarily resulted from
(i) unabsorbed  fixed costs related to the temporary  shutdown of the production
line in Germany,  (ii) increased inventory reserves for closeout inventory,  and
(iii)  lower  margins  from the sale of the  Company's  clothing  and soft goods
products.  The  decrease in clothing  and soft goods  margins  resulted  from an
increase in closeout product sales, which typically are at lower margins.

         Operating expenses increased to $35.5 million for fiscal 1999, compared
to $25.2 million for fiscal 1998. The increase resulted primarily from (i) legal
and  advisory  fees paid to assist the Company in  developing  and  implementing
restructuring  plans and negotiating with lenders,  (ii) the operations of a new
distribution  subsidiary in Canada which began  operations in January 1998,  and
(iii)  accrued  severance  costs due to a reduction  in force at the  production
facility in Germany.


                                       23
<PAGE>



         Interest expense increased  approximately  $0.9 million to $6.6 million
for fiscal  1999,  compared to $5.7  million for fiscal  1998.  The increase was
attributable to increased  average  borrowing  levels required to satisfy higher
working capital  requirements  due to the Company's losses and a higher interest
rate applied to the U.S. credit line.

         Other income  increased  to $1.5  million in fiscal  1999,  compared to
$33,000 in fiscal 1998. The increase in other income was primarily the result of
realized and unrealized net gains on forward foreign currency  contracts and the
result of realized and unrealized net gains on unhedged payables  denominated in
foreign currencies.

         The  provision for income taxes  increased  from $1.4 million in fiscal
1998 to $1.2 million in fiscal 1999.  The increase in the  provision  for income
taxes was  attributable to the increase in the valuation  allowance for deferred
tax assets since  management  believes that none of the deferred tax assets will
be realized.

Fiscal 1998 Compared to Fiscal 1997

         Net sales  decreased 2.0% in fiscal 1998 to $81.4 million,  compared to
$83.1 million in fiscal 1997. Net sales decreased by approximately  $5.1 million
as a result of the weighted average exchange rates used to consolidate the sales
of the German and the Japanese  subsidiaries  from their functional  currency to
U.S.  Dollars,  which was partially  offset by an increase in soft good sales of
$3.5 million.

         Gross profit for fiscal 1998 decreased to $26.9 million,  and decreased
as a percentage of sales to 33.1%, compared to $32.6 million, or 39.3% of sales,
for fiscal 1997.  The reduction in gross profit  percentage was primarily due to
lower production levels at the factory and to the introduction of the M51 Series
of bindings which were costlier to produce than initially anticipated.

         Operating expenses decreased to $25.2 million for fiscal 1998, compared
to $28.0  million for fiscal 1997.  Operating  expenses  decreased  $2.4 million
primarily as a result of the weighted average exchange rates used to consolidate
the  operating  expenses  of the German  and  Japanese  subsidiaries  from their
functional currency to Dollars.

         Interest expense increased  approximately  $0.6 million to $5.7 million
for fiscal 1998,  compared to $5.1 million for fiscal 1997.  The increase is the
result of higher average outstanding  balances on the Company's existing line of
credit  arrangements  and higher weighted  average  interest rates on the credit
lines for fiscal 1998 as compared to fiscal 1997.

         Other  income items  decreased  to $33,000 in fiscal 1998,  compared to
$2.8 million in fiscal 1997.  The  decrease is  attributable  in part to forward
foreign exchange contracts held by the Company at March 31, 1998, which were not


                                       24
<PAGE>

accounted for as firm commitment hedging transactions.  As a result, the Company
adjusted the contracts to market value and recorded a loss of approximately $1.3
million, which has been recorded in other expense.

         The  provision for income taxes  increased  from $0.7 million in fiscal
1997 to approximately $1.2 million in fiscal 1998. The increase in the provision
for income taxes was attributable to the increase in the valuation allowance for
deferred tax assets.

Liquidity and Capital Resources

         Marker  incurred a net loss of $48.0  million  for the year ended March
31, 1999, and as of March 31, 1999 had a shareholders' deficit of $29.8 million.
The Company  currently has  inadequate  working  capital to fund  operations and
service  repayment  of debt.  The  Company  is not in  compliance  with  certain
financial  covenants and in default under its  obligations to certain  creditors
(see "Business - Recent Events").  Accordingly,  there is substantial doubt that
the Company will be able to continue as a going concern.

         The  Company's  primary cash needs are for  purchases of raw  materials
inventory  for  production,   finished  goods  inventory,  funding  of  accounts
receivable,  and  capital  expenditures.  Historically,  the  Company's  primary
sources of cash for its business activities have been cash flows from operations
and borrowings under its lines of credit and term loans.

         Working  capital  decreased  from $6.7  million  at March  31,  1998 to
$(34.8) million, at March 31, 1999. The decrease in working capital is primarily
attributable to the Company's losses.

         During  fiscal 1999,  the Company spent  approximately  $3.6 million on
capital  expenditures  which consisted  primarily of manufacturing  equipment in
Germany.

         At March 31, 1999, the Company's primary sources of liquidity consisted
of $5.5 million in cash and cash  equivalents  and  available  borrowings  under
lines of credit. At March 31, 1999, the Company had approximately  $47.0 million
available   borrowings  under  lines  of  credit,   of  which  it  had  borrowed
approximately  $46.1  million.  The Company's  borrowings  under lines of credit
typically  reach their maximum  during the Company's  third fiscal  quarter.  In
fiscal 1999 and 1998, the Company had maximum  borrowings  outstanding under its
lines of credit of approximately $78.9 and $74.2 million, respectively.

         As of March 31, 1999,  Marker  Germany and Marker  Austria,  on a stand
alone  unconsolidated  basis,  each had a net stockholder's  deficit.  Under the
applicable   foreign  laws  and  regulations,   in  order  to  avoid  bankruptcy
proceedings,  these entities require additional capital infusions. Marker and CT
Sports are in the process of negotiating  the Asset Purchase  Agreement and debt
restructuring  arrangements with certain of Marker's  creditors.  If successful,
these  negotiations  will result in capital  infusions  which will  increase the
stockholder's  equity  of these  entities.  There can be no  assurance  that the
Company  will  be  successful  in  increasing  stockholder's  equity  at a level
sufficient to avoid such bankruptcy proceedings.

         As of March 31, 1999, the Company was not in compliance  with a minimum
tangible net worth  covenant  under a $3.0 million  Canadian  Dollar (U.S.  $2.0
million) line of credit  agreement with the Royal Bank. The Company was also not
in compliance with margin requirements under the same line of credit as of March
31, 1999. On June 22, 1999, the Royal Bank notified the Company of several terms
and conditions  that it requires the Company to meet in order for the Royal Bank
to continue to provide financing to the Company. The Company is currently in the
process of attempting to comply with the terms and conditions that the Royal


                                       25
<PAGE>

Bank has outlined in its letter and is in the process of negotiating  with a new
lender in order to obtain  financing.  In the event that  non-compliance  is not
cured or waived, the Royal Bank may exercise its rights to demand payment of all
amounts  due and/or  foreclose  on the  Company's  assets  which are  pledged as
collateral under the agreement which could also lead to cross-defaults under the
Company's other credit arrangements.  There can be no assurance that the Company
will be able to cure its  non-compliance,  reach a  satisfactory  agreement with
Royal Bank or secure financing from a new lender

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
outstanding   balance.   In  the  event  that  an   agreement  is  not  reached,
HypoVereinsbank could proceed to obtain a judgment against the Company and force
the Company into an involuntary  bankruptcy.  There can be no assurance that the
Company will reach a satisfactory agreement with HypoVereinsbank.

         The Company did not make the required interest payments of $125,000 due
in October  1998 and  $125,000  due in April  1999 on the  Series A Bonds.  As a
result,  the  bondholder  has the right to declare the Series A Bonds in default
and  accelerate  the entire  outstanding  balance of $11.4  million plus accrued
interest.  On March 26, 1999, CT Sports entered into a  restructuring  agreement
with the bondholder  which is contingent,  among other things,  Marker  entering
into a definitive  purchase  agreement  with CT Sports.  Under the agreement the
Series A Bonds will be reduced to an aggregate  principal  amount of  $5,750,000
and  payable in four equal  annual  installments  of  $750,000  with  $2,750,000
payable after 5 years. The agreement also requires  interest  payments at 2% per
annum during the first four years,  and thereafter a variable rate not exceeding
the prime  rate on  commercial  loans in Japan  plus 0.5%.  The  agreement  also
requires that certain  personal  guarantees of Eiichi  Isomura on Marker Japan's
debt  obligations  be  satisfied  commencing  on the  sixth  anniversary  of the
bankruptcy court confirming a plan of reorganization.  There can be no assurance
that the  bondholder  will  not  declare  the  Series  A Bonds  in  default  and
accelerate the outstanding balance.

         Subsequent to March 31, 1999 the Company notified M&T Bank and KeyBank,
banks with which the Company had certain foreign exchange arrangements, that the
Company would be unable to utilize its foreign exchange  contracts as originally
intended.  As a result, on May 25, 1999 M&T Bank terminated the foreign exchange
netting agreement (the "Netting  Agreement") dated May 1, 1997 with the Company.
Pursuant to its rights under the Netting Agreement, M&T Bank canceled and closed
out all outstanding  foreign exchange contracts for a loss of $3.7 million as of
May 21, 1999 and demanded immediate payment of this amount. Although the Company
is currently negotiating with M&T Bank to restructure this obligation, there can
be no assurance  that the Company will reach a  satisfactory  agreement with M&T
Bank. In the event that an agreement is not reached, M&T


                                       26
<PAGE>

could  proceed to obtain a judgment  against  the  Company and force the Company
into an  involuntary  bankruptcy.  As of June 30, 1999,  the  aggregate  loss on
foreign exchange contracts with M&T Bank and KeyBank totaled  approximately $5.1
million.  The loss on the KeyBank  contracts  will  continue to  fluctuate  as a
result of changes in the exchange rates.

         The Company is not in compliance  with several loan covenants under the
terms and conditions of the revolving  credit  agreement among the Company,  its
U.S. subsidiaries and First Security Bank. On June 14, 1999, First Security Bank
notified the Company that the termination of the Netting Agreement with M&T Bank
constituted  a default  under the revolving  credit  facility.  Also, as of June
30,1999,  the Company's  outstanding  balance on its line of credit exceeded the
available  borrowing  base  for a  period  greater  than  the ten day  mandatory
repayment  period  allowed  under the  revolving  credit  agreement  which  also
constitutes a default. As of July 14, 1999, First Security Bank had not declared
the line of credit in default,  but has  reserved  the right to do. In the event
that the bank declares the line of credit in default,  the bank can exercise its
rights  to  demand  payment  of all  amounts  due  under  the  revolving  credit
agreement,  foreclose on the  Company's  assets which are pledged as  collateral
under the agreement, or force the Company into an involuntary bankruptcy.  There
can be no assurance that the Company will be able to cure its  non-compliance or
reach a satisfactory agreement with the bank.

         On March 31, 1999,  the Company's DM 58.7 million (U.S.  $32.3 million)
line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank  expired.
HypoVereinsbank  and  Deutsche  Bank AG have  agreed to extend the  credit  line
through August 31, 1999 based on numerous  conditions.  Such conditions include,
but are not limited to, (i) the consummation of the transactions contemplated by
the Asset  Purchase  Agreement  (ii) Marker and CT Sports  entering  into lockup
agreements   with  a  majority   of   Marker's   shareholders   and   acceptable
pre-bankruptcy  agreements  with  key  creditors,  and  (iii)  product  purchase
guarantees  by CT Sports.  There can be no  assurance  that the Company  will be
successful in meeting these conditions.  In the event that the Company is unable
to meet  these  conditions,  the  German  banks  could  terminate  the bank line
immediately and force the Company into an involuntary bankruptcy.

         On January 14, 1999,  the  Company,  in  coordination  with Zions First
National Bank ("Zions")  disposed of its leased snowboard  equipment  through an
auction.  The net  proceeds of the  auction  were paid to Zions.  The  remaining
balance of $1.8 million was to be paid  according  to the original  terms of the
lease. On March 17, 1999, the Company signed an agreement with Zions whereby the
Company  would make a lump sum  payment of  $170,000 on or before July 1 as full
settlement of the remaining lease obligation of $1.7 million.  On June 30, 1999,
the Company  signed a revised  agreement  with Zions  whereby  the Company  paid
$30,000  on June 30,  1999,  and must pay the  remaining  $140,000  on or before
October 1, 1999.  In the event this  payment is not made,  the  Company  remains
liable for the entire $1.7 million  obligation.  There can be no assurance  that
the Company will be able to satisfy its obligation to pay the remaining $140,000
to Zions by October 1, 1999.


                                       27
<PAGE>


          Although  the  Company is  seeking to  alleviate  its  current  fiscal
problems  by,  among other  things,  restructuring  the  Company's  obligations,
obtaining additional financing,  entering into the Asset Purchase Agreement with
CT Sports,  and filing a voluntary  petition for relief under  Chapter 11 of the
United  States  Code,  there  can be no  assurance  that  the  Company  will  be
successful  in such  endeavors  or that the  Company  will not be forced into an
involuntary bankruptcy.

Year 2000 Computer Issue

         Many  currently  installed  computer  systems and software are coded to
accept only two digit  entries in the date code field.  Beginning the year 2000,
these date code  fields will need to accept  four digit  entries to  distinguish
twenty-first century dates from twentieth century dates. As a result, within the
next five months,  computer  systems and/or  software used by many companies may
need to be upgraded to comply  with such "Year 2000"  requirements.  The Company
has  assessed  the  potential   impact  of  Year  2000  on  the   processing  of
date-sensitive  information by the Company's information systems,  manufacturing
systems and other ancillary  systems.  While there can be no assurance that Year
2000  matters  will be  satisfactorily  identified  and  resolved,  the  Company
currently  believes,  based on discussions with its information systems vendors,
that Year 2000 issues will not have a material adverse effect on the Company.

         The  Company's  Year  2000  initiative  is being  managed  by a team of
internal  staff and is designed  to ensure that there are no adverse  effects on
the Company's ability to conduct  business.  The initiative covers the corporate
office network and financial systems,  payroll processing,  corporate computers,
manufacturing  systems  and  telephone  systems.  In  addition,  the  Company is
reviewing  the Year 2000  compliance  efforts of the Company's key suppliers and
other principal business partners.

         The  Company  believes  it has  brought  its  systems  into  Year  2000
compliance  and is in the process of testing the systems to ensure that they are
Year 2000 compliant. The Company has established a target date of August 1, 1999
to complete testing of all systems, which depending on the results of such tests
could  result  in  additional   modifications  of  the  applicable  systems  and
additional Year 2000 testing.  The Company's  ability to meet the target date is
dependent upon the  responsiveness of its suppliers and contractors to potential
problems  that could be  identified  during the testing  phase.  The Company has
established a supplier compliance program, and is working with its key suppliers
to minimize  such  risks.  The Company  currently  estimates  that it will incur
expenses  of  approximately   $150,000  through  1999  in  connection  with  its
anticipated Year 2000 efforts.  The timing and amount of the Company's  expenses
may vary and are not necessarily  indicative of readiness efforts or progress to
date.

         The Company is in the process of  developing  contingency  and business
continuity  plans  tailored  for  Year  2000-related  occurrences.  The  Company
believes its significant  hardware and software systems are Year 2000 compliant.
The Company believes that the most reasonably likely worst case scenario of


                                       28
<PAGE>

failure by the Company or its suppliers to  adequately  resolve Year 2000 issues
would arise from a failure of its order entry and  accounts  receivable  system.
Such a failure would require the Company to resort to  "non-computerized"  means
to undertake such sales and  distribution  functions as placing  customer orders
and  ordering  inventory.  While the  Company  believes  that it is  equipped to
operate in such a "non-computerized"  mode to address such a failure,  there can
be no  assurance  that the  Company  would not, as a result of such or any other
unanticipated Year 2000 failure, suffer from lost revenues,  increased operating
costs, loss of customers or other business interruptions of a material nature.

         The above information is based on the Company's current best estimates,
which were derived using numerous  assumptions  of future events,  including the
availability  and future  costs of certain  technological  and other  resources,
third party  modification  actions and other  factors.  Given the  complexity of
these issues and possible as yet  unidentified  risks,  actual  results may vary
materially from those  anticipated and discussed  above.  Specific  factors that
might cause such differences include, among others, the availability and cost of
personnel  trained in this area,  the ability to locate and correct all affected
computer  codes,  the timing and  success of remedial  efforts of the  Company's
third party suppliers and similar uncertainties.

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk.

         The Company is exposed to market risk,  including various interest rate
and foreign currency exchange rate risks.

         Foreign  Currency  Risk  - The  Company  has  international  operations
resulting in receipts and payments in currencies that differ from the functional
currency of the Company.  The Company's  functional currency is the U.S. dollar.
Forward foreign exchange contracts historically have been used by the Company to
reduce the potential  impact of  unfavorable  fluctuations  in foreign  exchange
rates. The Company has commitments to buy and sell foreign  currencies  relating
to  foreign  exchange  contracts  in  order  to hedge  against  future  currency
fluctuations.

         The Company holds forward foreign exchange contracts to purchase German
Marks with Japanese Yen and U.S. Dollars.  The contracts mature at various dates
through April 2000. The outstanding forward exchange purchase and sale contracts
at March 31, 1999, are as follows:
<TABLE>
<CAPTION>
                Selling                    Buying         Contracted
                Amount                     Amount        Forward Rate        Unrealized Loss         Maturity
                ------                     ------        ------------        ---------------         --------
<S>             <C>                       <C>          <C>                    <C>                 <C>
          Yen   1,833,190,000      DM     27,000,000   64.080 - 71.000        $  (576,492)        4/15/99-4/20/00
          $        37,809,651      DM     62,229,000   1.4969 - 1.7455        $(3,341,162)       4/19/99-12/29/99
</TABLE>

         The US Dollar amount of the Yen contracts based upon the March 31, 1999
spot rate was approximately $15.4 million. Due to the Company's financial


                                       29
<PAGE>

position,  the Company determined that it would be unable to utilize the foreign
exchange contracts as originally intended.  Accordingly, all contracts have been
accounted  for  as  speculative  and  marked  to  market.  This  resulted  in an
unrealized  loss of $3.9 million as of March 31, 1999. In addition,  the Company
realized a net gain of  approximately  $3.9, $0.8 million,  and $1.0 million for
fiscal years 1999, 1998 and 1997,  respectively,  related to sold contracts that
were not accounted for as hedges.

         Subsequent  to year-end the Company  notified the  counterparties,  M&T
Bank and  KeyBank,  that the  Company  would be unable to  utilize  the  foreign
exchange contracts as originally intended. As a result, on May 25, 1999 M&T Bank
terminated  the  Netting  Agreement.  Pursuant  to its rights  under the Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of this amount.  Although the Company is currently  negotiating with M&T
Bank to restructure this obligation,  there can be no assurance that the Company
will  reach a  satisfactory  agreement  with  M&T  Bank.  In the  event  that an
agreement is not reached,  M&T Bank could  proceed to obtain a judgment  against
the Company and force the Company into an involuntary bankruptcy. As of June 30,
1999, the aggregate loss on foreign exchange contracts with M&T Bank and KeyBank
totaled  approximately  $5.1  million.  The loss on the KeyBank  contracts  will
continue to fluctuate as a result of changes in the exchange rates.

         Interest Rate Risk - The Company's exposure to market risks for changes
in interest rates relate to its outstanding borrowings. The Company's borrowings
consists of operating  line-of-credits  with variable  interest rates to finance
its  operations  and  long-term  debt with fixed  interest  rates to finance its
capital expenditures.  Changes in the general level of interest rates can affect
the Company's interest expense incurred in connection with its  interest-bearing
liabilities.  The interest rates on the Company's variable rate debt ranged from
2.0% to 8.75% on an  outstanding  balance of $49.8 million as of March 31, 1999.
The interest rates on the Company's  fixed rate debt ranged from 2.1% to 9.7% on
an outstanding balance of $5.7 million as of March 31, 1999.

Item 8.  Consolidated Financial Statements and Supplementary Data

         Refer to Consolidated Financial Statements included separately herein.

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

         None

                                       30
<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

         The  following  table  sets  forth  information  with  respect  to  the
executive officers and directors of the Company:
<TABLE>
<CAPTION>
                                                                      Date
                                                                    Appointed
                                                                    to Present              Other Business Experience
      Name                              Title            Age        Position                   During Past Five Years
--------------------               -----------------     ---      ------------      ------------------------------------------
<S>                                                       <C>         <C>           <C>
Peter C. Weaver                    President, Chief       51          1998          President of  Easton Technical Products
                                   Executive Officer                                1991-1998
                                   and a Director of
                                   Marker
                                   International

Henry E. Tauber (1)                Director of Marker     58          1984          Chief Executive Officer and President
                                   International                                    of Marker International, 1984 - 1998

Eiichi Isomura (2)                 Chairman of Marker     62          1981          President of Isomura Sangyo Kaisha Ltd.
                                   Japan                                            and President of Isomura Seisakusho
                                                                      1990          KK.  Director of Marker International
                                                                                    1990 - 1998

Dr. Wilhelm Fahrngruber (3)        Chairman and           58          1990          Same
                                   Managing Director
                                   of Marker Germany

Otto H. Harsanyi                   Director of Marker     51          1992          Patent Engineer and General Manager of
                                   Germany and                                      Group Bernard Tapie, 1986-1992
                                   Assistant
                                   Secretary of
                                   Marker
                                   International

Kirk S. Langford                   Executive Vice         44          1994          Vice President of Marker USA,
                                   President of                                     1992-1994; Director of Sales of Marker
                                   Marker USA                                       USA, 1990-1992

Daryl P. Santos (4)                Vice President of      47          1985          Same
                                   Marker
                                   International

Premek Stepanek                    Managing Director      62          1991          Same
                                   of Marker Germany

Kevin Hardy                        Chief Financial        35          1998          Chief Financial Officer Marker USA and
                                   Officer of Marker                                Marker Ltd. 1991 - 1998
                                   International
</TABLE>

                                       31
<PAGE>

<TABLE>
<CAPTION>

                                                                      Date
                                                                    Appointed
                                                                    to Present            Other Business Experience
      Name                              Title            Age        Position                During Past Five Years
--------------------               -----------------     ---      ------------      --------------------------------------

<S>                                                       <C>         <C>           <C>
Graham S. Anderson                 Director of Marker     66          1985          Chairman and Chief Executive Officer of
                                   International                                    Pettit-Morry Co., 1987-1994.  Director
                                                                                    of Commerce Bank Corporation, Gray
                                                                                    Harbor Paper Company (1992-1998),
                                                                                    Acordia Northwest, Inc. (1994-1997),
                                                                                    and Tully's Coffee Company Corporation.
                                                                                    Chairman of the National Association
                                                                                    of Insurance Brokers (1997), and Alberg
                                                                                    Holding Company (1990-1995).

John G. McMillian (5)              Chairman of the        73          1998          Director of Marker International, 1990
                                   Board of Marker                                  - present.  Chairman of the Board,
                                   International                                    President and Chief Executive Officer
                                                                                    of Allegheny & Western Energy
                                                                                    Corporation, 1987-1995; Director of
                                                                                    SunBank Miami N.A. (Sun Trust).

Vinton H. Sommerville              Director of Marker     62          1990          Chief Executive Officer and Chairman of
                                   International                                    the Board of Slim Sommerville, Inc.,
                                                                                    1988-present.
</TABLE>
---------------------------------

(1)      Resigned  as the  Company's  Chief  Executive  Officer,  President  and
         Chairman of its Board of Directors in fiscal 1999.

(2)      Resigned as the Executive  Vice  President of Marker  International  in
         fiscal 1999.

(3)      Resigned as the  Chairman and  Managing  Director of Marker  Germany on
         July 1, 1999.

(4)      Resigned  as the Vice  President  of Marker  International  on April 1,
         1999.

(5)      Mr. McMillian served as the Company's  interim Chief Executive  Officer
         from June 23, 1998 until October 7, 1998.

         Effective  June 23,  1998,  Robert Sind was  temporarily  acting as the
Company's Chief Operating Officer.  Mr. Sind served in this role until September
1998. Mr. Sind is president and chief executive  officer of Recovery  Management
Corporation, a Delaware corporation ("RMC"), positions he has held for more than
five years.  Mr.  Sind also serves as a director of each of Leslie Fay  Company,
Inc. and Kasper A.S.L.  Ltd. RMC was engaged by the Company in May 1998 pursuant
to a four-month  consulting  contract (the "RMC Contract") to assist the Company
in  developing  and  implementing  a  restructuring  plan.  Pursuant  to the RMC
Contract, RMC received a consulting fee of $50,000 per month from the Company as
well as  reimbursement  of certain  out-of-pocket  expenses.  In  addition,  RMC
received 10,000 shares of stock and a $200,000 bonus in September 1998.

         Each  executive  officer is  appointed  by the Board of  Directors  and
serves the  direction  of the Board of  Directors.  Each  member of the Board of
Directors receives reimbursement of expenses for each Board or committee meeting


                                       32
<PAGE>


attended.  Directors of the Company are eligible to participate in the Company's
1994 Non-Qualified and Incentive Stock Option Plan (the "Stock Option Plan").

Item 11.  Executive Compensation

         The following table sets forth the compensation  paid or accrued by the
Company  to or on behalf of its Chief  Executive  Officer  and each of its other
four most highly  compensated  executive  officers  who earned over  $100,000 in
fiscal years 1999, 1998 and 1997 (collectively,  the "Named Executive Officers")
for services  rendered  during the fiscal  years ended March 31, 1999,  1998 and
1997, respectively.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                                    Annual Compensation                Long-Term
                                                    -------------------              Compensation
                                                                                        Awards
                                                                   Other Annual         -------
      Name and Principal          Fiscal     Salary   Bonus       Compensation         Options           All Other (5)
         Position                  Year         $       $               $                  #             Compensation
------------------------          ------    -------  -------      --------------      -----------       -------------
<S>                                <C>      <C>       <C>                <C>             <C>                <C>
Peter C. Weaver                    1999     144,423   50,000             (4)             900,000            1,500
   President and Chief             1998        --      --                (4)                 --               --
   Executive Officer of            1997        --      --                (4)                 --               --
   Marker International

Henry E. Tauber                    1999     244,560    --                (4)                 --             1,088
   President and Chief             1998     287,500    --                (4)                 --             2,500
   Executive Officer of            1997     300,000   25,000             (4)                 --               500
   Marker International (1)

Premek Stepanek                    1999     163,451    --                (4)                 --               --
   Managing Director of            1998     157,785    --                (4)                 --               --
   Marker Germany                  1997     157,785    --                (4)                 --               --


Dr. Wilhelm Fahrngruber            1999     210,088    --                (4)                 --               --
   Chairman and Managing           1998     198,258    --                (4)                 --               --
   Director of Marker Germany      1997     198,258    --                (4)                 --               --
   (2)

Brad Stewart                       1999     208,236    --                (4)                 --             4,164
   Executive Vice President,       1998     167,137    --                (4)                 --             3,250
   Secretary and Treasurer of      1997     159,134    --                (4)                 --             2,890
   Marker International (3)

Kirk S. Langford                   1999     150,000    --                (4)                 --             1,333
   Executive Vice President        1998     143,750   35,000             (4)                 --             3,375
   Marker USA                      1997     121,250   50,000             (4)              20,000            3,425

Daryl P. Santos                    1999     150,000    --                (4)                 --             1,693
   Vice President Marker           1998     143,750   35,000             (4)                 --             3,350
   International                   1997     117,500   35,000             (4)              20,000            2,550
</TABLE>

(1)      During fiscal 1999,  Henry E. Tauber  resigned as the  Company's  Chief
         Executive Officer, President and Chairman of its Board of Directors.



                                       33
<PAGE>

 (Footnotes continued from previous page relating to Summary Compensation Table)

 (2)     The Company  pays  salaries to its  employees in the  applicable  local
         currency.  The above salaries are  translated  into US Dollars based on
         exchange  rates  of US $1 for DM  1.7405  and US $1 for  Yen  128  with
         respect to the employees  employed by Marker  Germany and Marker Japan,
         respectively.

(3)      During  fiscal  1999,  Brad  Stewart  resigned as the  Company's  Chief
         Operating Officer, Executive Vice President, Secretary and Treasurer.

(4)      The amount of perquisites and other personal  benefits  received by the
         indicated  officer  did not  exceed the lesser of $50,000 or 10% of the
         total annual salary and bonus for the year.

(5)      Amounts  indicated  pertain to Company  contributions  to the Company's
         401(k) retirement plan.


         The  Company  has  entered  into  employment   agreements  with  Premek
Stepanek, Managing Director of Marker Germany, Dr. Wilhelm Fahrngruber, Chairman
and Managing Director of Marker Germany and Otto H. Harsanyi, Director of Marker
Germany. Mr. Stepanek, Dr. Fahrngruber and Mr. Harsanyi receive base salaries of
$124,432, $186,681 and $94,676, respectively (based on an exchange of the German
Mark to the US Dollar of US $1 to DM 1.8159). Mr. Harsanyi's contract expired in
1998, Dr.  Fahrngruber's  contract expires in 2000, and Mr. Stepanek's  contract
expires in 2002.

         On October 8, 1998,  the Company  entered  into a five year  employment
agreement  with Mr. Weaver  providing for an annual base salary of $300,000.  In
addition,  on October 23, 1998, Mr. Weaver received  options to purchase 900,000
shares of common  stock of the Company at an exercise  price of $0.50 per share,
the per share fair  market  value of the  Company's  common  stock on that date.
Options to purchase 600,000 shares became  exercisable on April 23, 1999. Of the
remaining 300,000 options,  200,000 shares become  exercisable after one year of
service and 100,000 shares after two years of service.

         The Board of Directors has a standing Compensation Committee consisting
of Messrs. John G. McMillian and Graham S. Anderson.  The Compensation Committee
met once  during  the  fiscal  year  ended  March  31,  1999.  The  Compensation
Committee's  responsibilities  are:  (a) to determine  and approve  compensation
arrangements for executive officers of the Company and to review and oversee any
stock  option,  stock  award  plan  and  employee  benefit  plan or  arrangement
established by the Board of Directors for the benefit of the executive  officers
of the Company;  and (b) to review and recommend  director and officer  nominees
for election by the Company's  shareholders  or the Board of  Directors,  as the
case  may  be.  The  Compensation  Committee  does  not  have  a  procedure  for
considering  nominees to the Board of Directors who have been recommended by the
shareholders.

Stock Option Grants in Last Fiscal Year

         During the fiscal  year  ended  March 31,  1999,  the  following  stock
options  grants were made to the directors and Named  Executive  Officers of the
Company:


                                       34
<PAGE>

<TABLE>
<CAPTION>
                                                                                           Potential Relizable
                            Number of                                                        Value at Assumed
                            Securities                                                         Annual Stock
                            Underlying    % of Total                                        Price Appreciation
                             Options      Granted in      Exercise       Expiration        for Option Term (b)
Name                         Granted      Fiscal 1999     Price (a)         Date            5%             10%
-------------------------- ------------- -------------- -------------- --------------- -------------- --------------

<S>                          <C>             <C>            <C>         <C>              <C>            <C>
Peter C. Weaver              900,000         96.8%          $0.50       October 2008     $282,960       $717,120
</TABLE>

(a)      The exercise  price was fixed at the date of the grant and  represented
         the fair market value per share of Common Stock on such date.

(b)      In accordance with the rules of the Securities and Exchange Commission,
         the amounts shown on this table represent hypothetical gains that could
         be achieved for the  respective  options if exercised at the end of the
         option  term.   These  gains  are  based  on  assumed  rates  of  stock
         appreciation  of 5% and 10%  compounded  annually  from  the  date  the
         respective  options  were granted to their  expiration  date and do not
         reflect the Company's  estimates or projections of future prices of the
         Common Stock. The gains shown are net of the option exercise price, but
         do not include  deductions for taxes or other expenses  associated with
         the exercise.  Actual  gains,  if any, on stock option  exercises  will
         depend on the  future  performance  of the  Common  Stock,  the  option
         holder's  continued  employment through the option period, and the date
         on which the options are exercised.

         There were no stock  option  grants made by the Company to any other of
the Named Executive Officers listed in the Summary Compensation Table.

Aggregated  Stock Option  Exercises in the Last Fiscal Year and Fiscal  Year-End
Values

         During  the  fiscal  year  ended  March  31,  1999,  none of the  Named
Executive  Officers  exercised  stock options to acquire shares of the Company's
Common Stock.  The following  table sets forth  information  with respect to the
aggregate  number and value of unexercised  options held by the Named  Executive
Officers at March 31, 1999.  In addition,  none of the stock options held by the
Named Executive  Officers at March 31, 1999 had a fair market value in excess of
the exercise price or base price.

<TABLE>
<CAPTION>
                                                                                            Value of Unexercised
                                                              Number of Unexercised              In-the-Money
                                Shares                      Options at March 31, 1999     Options at March 31, 1999
                               Acquired        Value      ----------------------------   ---------------------------
    Name                     on Exercise     Realized     Exercisable    Unexercisable   Exercisable   Unexercisable
---------------------       ------------     --------     -----------    -------------   -----------   -------------

<S>                               <C>            <C>          <C>              <C>            <C>           <C>
Peter Weaver                      -               -                -           900,000        $  -          $     -

Kevin Hardy                       -               -           22,500             2,500           -                -

Dr. Wilhelm Fahrngruber           -               -           50,000                 -           -                -

Kirk S. Langford                  -               -           80,000            10,000           -                -

Daryl P. Santos                   -               -           80,000            10,000           -                -
</TABLE>


                                       35
<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain  information with respect to the
beneficial  ownership of the  Company's  Common Stock as of June 30, 1999 by (i)
each person known by the Company to be the  beneficial  owner of five percent or
more of the Company's Common Stock, (ii) each of the Company's Directors,  (iii)
each of the  Named  Executive  Officers  and (iv) all  directors  and  executive
officers as a group.

<TABLE>
<CAPTION>

     Name and Address of                              Number of Shares            Percentage of
       Beneficial Owner                             Beneficially Owned (1)          Class (2)
-------------------------------                    ----------------------         -------------
<S>                                                      <C>                           <C>
Ralano Family Partners, Ltd.
Attention: Louis M. Alpern
2201 N Stanton                                           1,070,800                     7.84%
El Paso, TX  79902-3211

      Directors and Executive Officers
Henry E. Tauber                                          5,659,388                    41.42%
Peter Weaver                                               600,000                      4.4%
John G. McMillian                                          182,140                      1.3%
Eiichi Isomura                                             142,857                      1.1%
Vinton H. Sommerville                                       86,836                        *
Kirk S. Langford                                            86,500                        *
Daryl P. Santos                                             85,823                        *
Dr. Wilhelm Fahrngruber                                     75,200                        *
Graham S. Anderson                                          64,500                        *
Premek Stepanek                                             50,000                        *
Kevin Hardy                                                 22,500                        *
Otto H. Harsanyi                                             5,000                        *
Shigeo Kaneko                                                5,000                        *
All directors and officers as a group (10)               7,065,744                     48.2%
</TABLE>

* Denotes less than 1% of outstanding shares

(1)      Shares shown include common shares of 2,243,333 which could be acquired
         within 60 days of June 30, 1999 by the  exercise of  outstanding  stock
         options  (910,000  shares) and the  conversion of  Redeemable  Series B
         Preferred Stock to common stock (1,333,333 shares).

(2)      For the purpose of computing  the  percentage  of common stock owned by
         each person or group listed in this table,  shares which are subject to
         options or warrants exercisable within 60 days after June 30, 1999 have
         been  deemed  to be  outstanding  for  the  purpose  of  computing  the
         percentage  of the shares of Common  Stock owned by any other person or
         group.


Item 13.  Certain Relationships and Related Transactions

         All of the  Company's  outstanding  Series A Bonds are held by  Isomura
Sangyo   Kaisha  Ltd.,  a  Japanese   corporation   ("Isomura   Sangyo"  or  the
"Bondholder"), controlled by Eiichi Isomura, a former director of the Company,


                                       36
<PAGE>


and his family.  The Series A Bonds are subject to redemption upon not less than
30 days prior notice, in whole or in part, at the option of the Company.

         The Series A-1 Bonds had an  original  aggregate  face value  amount of
$8.0 million and bear interest,  payable semi-annually on September 30 and March
31, at the effective  borrowing  rate for the  Bondholder  (the  "Japanese  Bank
Rate") of  approximately  4.75% and 7.97% for the fiscal  years ending March 31,
1999 and 1998,  respectively.  During the fiscal  years ended March 31, 1999 and
1998, none of the Series A-1 Bonds were redeemed.

         The redemption  price of the Series A-1 Bonds equals the face amount of
the portion of such bonds redeemed plus accrued, but unpaid interest thereon.

         The Series A-2 Bonds have an original  aggregate  face value  amount of
$10.0 million and bear interest, payable semi-annually on September 30 and March
31, at the Japanese  Bank Rate plus three percent of the face value of the bonds
outstanding.  The effective  rate on Series A-2 Bonds at March 31, 1999 and 1998
was 7.75% and 10.97%, respectively. During the fiscal years ended March 31, 1999
and 1998, none of the Series A-2 Bonds were redeemed.

         The redemption  price of the Series A-2 Bonds equals the face amount of
the portion of such bonds redeemed plus accrued, but unpaid interest thereon.

         The Series A-3 Bond has an aggregate  face value amount of $1.0 million
and bears interest,  payable  semi-annually on September 30 and March 31, at the
Japanese Bank Rate plus three percent of the face value of the bond outstanding.
The  effective  rate on Series A-3 Bond at March 31, 1999 and 1998 was 7.75% and
10.97%, respectively.


                                       37
<PAGE>


Series A Bonds - Issued to a Related Party
------------------------------------------

         Pursuant to an extension agreement dated September 3, 1998, between the
Company and the  Bondholder,  payment  terms of the Series A Bonds issued by the
Company were extended as follows: <TABLE> <CAPTION>

                                     Bonds Payable    Bonds Payable        Bond Payment Date          Bond Payment Date
                                     Japanese Yen      U.S. Dollars       Prior to Extension            As Extended
                                     ------------     -------------       ------------------          -----------------
                                      (In 000's)        (In 000's)
<S>                                     <C>               <C>             <C>                        <C>
Series A-1 Bonds
         Certificate #5                 270,947           $ 2,280           October 1, 1998            October 1, 1999
         Certificate #6                 270,947             2,280           October 1, 1999            October 1, 2000
                                     ------------     -------------
Total Series A-1 Bonds                  541,894             4,560
                                     ------------     -------------
Series A-2 Bonds
         Certificate #3                 338,683             2,850         December 16, 1998          December 15, 1999
         Certificate #4                 338,683             2,850         December 16, 1999          December 15, 2000
                                     ------------     -------------
Total Series A-2 Bonds                  677,366             5,700
                                     ------------     -------------
Series A-3 Bonds
         Certificate #1                 135,473             1,139         December 16, 1999          December 16, 2001
                                     ------------     -------------
Total Series A Bonds                  1,354,733           $11,399
                                     ============     =============
</TABLE>

         The Bondholder elected, under the terms of the extension agreement,  to
convert the bonds from United  States dollar  denominated  bonds to Japanese yen
denominated  bonds.  The  conversion  to  1,354,733,330  Japanese  Yen was  made
effective  on September  30, 1998.  This Yen  denominated  obligation  currently
remains unhedged and any gains or losses resulting from fluctuations in exchange
rates will be recorded in income.  As of March 31, 1999, the Company recorded an
unrealized loss of approximately $1.4 million.

         During  fiscal years 1999,  1998 and 1997,  Marker Japan  purchased ski
bindings and services  totaling  approximately  $66,000,  $92,000,  and $93,000,
respectively,  from Isomura Seisakusho KK ("Isomura  Seisakusho"),  a company of
which Mr. Isomura is the president, director, and owner of more than ten percent
of the  outstanding  stock.  At March 31, 1999,  1998 and 1997,  the net account
receivable from Isomura Seisakusho was approximately $0.0 million, $0.4 million,
and $0.5 million, respectively.

                                       38
<PAGE>

         At March 31, 1999,  the Company had  outstanding  notes in an aggregate
amount equal to  approximately  US $2.4 million  payable to Japanese  banks.  Of
these amounts,  approximately $1.5 million was secured by assets of Mr. Isomura,
a shareholder and former director of the Company.

         Marker  Japan  leases  office  space  in  Tokyo,   Japan  and  receives
distribution  services from Isomura  Sangyo.  In connection  therewith,  for the
fiscal years 1999,  1998 and 1997,  Marker Japan made payments to Isomura Sangyo
totaling approximately $238,000, $280,000, and $287,000, respectively.

         Prior to February 1, 1999, the Company  purchased  insurance through an
insurance  broker,  Acordia  Northwest  Inc.,  of which  Graham S.  Anderson,  a
director of the Company, is also a director.  The Company incurred approximately
$684,000,  $748,000,  and $851,000 of premiums for such insurance  during fiscal
1999, 1998 and 1997, respectively.

         DNR purchased  snowboards  from an affiliated  entity,  of which Gregor
Furrer & Partner  Holding  AG, a  minority  shareholder  of DNR,  is a  partner.
Snowboards  purchased from the related party totaled  approximately $0.9 million
and $5.9 million during 1999 and 1998, respectively.

         On  August  24,  1998,  Henry E.  Tauber,  former  president  and chief
executive  officer  of  Marker  and a member  of  Marker's  board of  directors,
purchased  1,000,000 shares of the Company's Series B Preferred Stock, $0.01 par
value (the "Preferred Stock"),  for a purchase price of $3,000,000.  As a result
of such  investment,  Henry Tauber  increased  his  percentage  ownership in the
Company to 45.4%. As of June 30, 1999, Mr. Tauber beneficially owns 41.4% of the
Company's  outstanding common stock.  Allen & Company  Incorporated gave an oral
report,  concluding  that the terms of the sale of the Preferred Stock were fair
and  reasonable,  and no less  favorable to the Company than those that could be
obtained  from an  unrelated  third  party  making a similar  investment  in the
Company.  As part of the Company's  overall  restructuring  plan,  Mr. Tauber is
presently  negotiating  with  CT  Sports  for the  retirement  of the  Series  B
Preferred Stock.

                                       39
<PAGE>
<TABLE>
<CAPTION>

                                     PART IV
                                     -------

<S>                                                                                                         <C>
Item 14. Exhibits,  Consolidated  Financial  Statement  Schedules and Reports on
                    Form 8-K Page Reference     (a) 1.Financial Statements

                    The following  consolidated financial statements required by
                    Part II, Item 8, are included in Part IV of this report.

                    Marker International and Subsidiaries
                    Report of Independent Public Accountants ...............................................F-1
                    Consolidated Balance Sheets as of March 31, 1999 and 1998 ..............................F-2
                    Consolidated Statements of Operations for the Years Ended
                         March 31, 1999, 1998 and 1997 .....................................................F-4
                    Consolidated Statements of Shareholders' (Deficit) Equity for
                         the Years Ended March 31, 1999, 1998 and 1997 .....................................F-5
                    Consolidated Statements of Cash Flows for the Years Ended
                         March 31, 1999, 1998 and 1997 .....................................................F-6
                    Notes to Consolidated Financial Statements .............................................F-7


         2.         Financial Statement Schedules

                    Report of Independent Public Accountants on Schedule                                     47
                    Schedule II - Valuation and Qualifying Accounts                                          48


         3.              List of Exhibits

               2.1       Share Purchase and  Shareholders  Agreement among Lucio
                         Roffi,  Gregor  Furrer & Partner  Holding AG and Marker
                         International,  dated June 11,  1996  (Filed as exhibit
                         2(a) to the Company's  Current Report on Form 8-K dated
                         June 19, 1996 and incorporated herein by reference).

               2.2       Letter   Agreement   between  Lucio  Roffi  and  Marker
                         International,  dated June 11,  1996  (Filed as exhibit
                         2(b) to the Company's  Current Report on Form 8-K dated
                         June 19, 1996 and incorporated herein by reference).
</TABLE>

                                       40
<PAGE>

               2.3       Intentionally Omitted

               2.4       Short-term   Promissory  Note  for  CHF   12,084,832.65
                         executed  by the  Company and payable in full to Gregor
                         Furrer & Partner  Holding  AG on or prior to August 31,
                         1996 (filed as exhibit  2(c) to the  Company's  Current
                         Report on Form 8-K dated July11,  1996 and incorporated
                         herein by reference).

               2.5       Short-term   Promissory  Note  for  CHF   12,084,832.65
                         executed  by the  Company  and payable in full to Lucio
                         Roffi on or prior to August 31,  1996 (filed as exhibit
                         2(d) to the Company's  Current Report on Form 8-K dated
                         July 11, 1996 and incorporated herein by reference).

               2.6       Stock  Purchase   Agreement,   dated  August  19,  1998
                         relating to the issuance  and sale of 1,000,000  shares
                         of Series B Preferred  Stock to Henry E. Tauber  (Filed
                         as exhibit 4.1 to the Company's  Current Report on Form
                         8-KA dated September 10, 1998).

               2.7       Stock Purchase Agreement between Richard H. Novak Trust
                         and Marker AG for its 80%  interest in DNR  Sportsystem
                         Ltd.  (Filed as  exhibit  10 to the  Company's  Current
                         Report on Form 8-K dated December 24, 1998).

               3.1       Form  of  Restated  Articles  of  Incorporation  of the
                         Company (filed as Exhibit 3.1 to the Company's Form S-1
                         Registration Statement,  Amendment No. 1 dated July 14,
                         1994 (File No.  33-80100)  and  incorporated  herein by
                         reference).


                                       41
<PAGE>

                 3.2     Form of Amended  and  Restated  By-Laws of the  Company
                         (filed  as  Exhibit  3.2  to  the  Company's  Form  S-1
                         Registration Statement,  Amendment No. 1 dated July 14,
                         1994 (File No.  33-80100)  and  incorporated  herein by
                         reference)

                 4.1     Form of Certificate representing Common Stock (filed as
                         Exhibit  4.1 to the  Company's  Form  S-1  Registration
                         Statement,  Amendment  No. 1 dated July 14,  1994 (File
                         No. 33-80100) and incorporated herein by reference).

                10.1     Employment  Agreement  for  Premek  Stepanek  (filed as
                         Exhibit  10.1 to the  Company's  Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

                10.2     Employment Agreement for Dr. Wilhelm Fahrngruber (filed
                         as Exhibit 10.2 to the Company's Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

                10.3     Employment   Agreement  for  Otto  Harsanyi  (filed  as
                         Exhibit  10.3 to the  Company's  Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

                10.4     Form of 1994 Stock  Option Plan (filed as Exhibit  10.4
                         to the Company's Form S-1 Registration  Statement dated
                         June 10,  1994  (File No.  33-80100)  and  incorporated
                         herein by reference).

                10.5     401(k)  Plan  (filed as Exhibit  10.5 to the  Company's
                         Form S-1  Registration  Statement  dated June 10,  1994
                         (File  No.   33-80100)  and   incorporated   herein  by
                         reference).

                10.6     Manufacturing   Facility  Lease  Agreement   (filed  as
                         Exhibit  10.6 to the  Company's  Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

                10.7     Second Amended and Restated  Revolving Credit Agreement
                         with  First  Security  Bank of  Utah,  N.A.,  including
                         Extension  Agreement  (filed  as  Exhibit  10.7  to the
                         Company's Form S-1  Registration  Statement  dated June
                         10, 1994 (File No. 33-80100) and incorporated herein by
                         reference).

               10.8      Loan  Agreement  with First  Interstate  Bank (filed as
                         Exhibit  10.8 to the  Company's  Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

               10.9      Agreement with Bayerischi  Hypotheken-und  Wechsel-Bank
                         ("Hypo Bank") for a DM 60,000,000 Line of Credit (filed
                         as Exhibit 10.9 to the Company's Form S-1  Registration
                         Statement  dated June 10, 1994 (File No.  33-80100) and
                         incorporated herein by reference).

              10.10      Loan  Agreement  with Hypo Bank for a DM 4,000,000 loan
                         (filed  as  Exhibit  10.10  to the  Company's  Form S-1
                         Registration  Statement  dated June 10,  1994 (File No.
                         33-80100) and incorporated herein by reference).

                                       42
<PAGE>



              10.11      Loan  Agreement  with Hypo Bank for a DM 1,863,333 loan
                         (filed  as  Exhibit  10.11  to the  Company's  Form S-1
                         Registration  Statement  dated June 10,  1994 (File No.
                         33-80100) and incorporated herein by reference).

              10.12      Loan  Agreement  with Hypo Bank for a DM 2,220,000 loan
                         (filed  as  Exhibit  10.12  to the  Company's  Form S-1
                         Registration  Statement  dated June 10,  1994 (File No.
                         33-80100) and incorporated herein by reference).

              10.13      Loan  Agreement  with Hypo Bank for a DM 3,000,000 loan
                         (filed  as  Exhibit  10.13  to the  Company's  Form S-1
                         Registration  Statement  dated June 10,  1994 (File No.
                         33-80100) and incorporated herein by reference).

              10.14      Loan Agreement with Hypo Bank for a DM 10,000,000  loan
                         (filed  as  Exhibit  10.14  to the  Company's  Form S-1
                         Registration  Statement  dated June 10,  1994 (File No.
                         33-80100) and incorporated herein by reference).

              10.15      Loan Agreement with Hypo Bank for a DM 64,000,000  Line
                         of Credit (filed as Exhibit 10.15 to the Company's Form
                         S-1  Registration  Statement  dated June 10, 1994 (File
                         No. 33-80100) and incorporated herein by reference).

              10.16      Loan  Agreement  with Hypo Bank for a DM 7,284,205 loan
                         (Filed  as  Exhibit  10.16 to the  Company's  Form 10-Q
                         dated  August  11,  1995  and  incorporated  herein  by
                         reference).

              10.17      Pledge  Agreement and Conditional  Assignment with Hypo
                         Bank for a $3.5 million time deposit  (Filed as exhibit
                         10.17 to the Company's  Form 10-Q dated August 11, 1995
                         and incorporated herein by reference).

              10.18      Line of Credit  Agreement  Between  Marker  Deutschland
                         GmbH and  Hypo  Bank for DM  70,000,000  and a  Foreign
                         Exchange  Line of Credit  for DM  60,000,000  (Filed as
                         exhibit 10.18 to the Company's Form 10-Q dated November
                         13, 1995 and incorporated herein by reference).

              10.19      Amended and Restated  Revolving  Credit  Agreement with
                         First  Security  Bank for up to  $18,000,000  (Filed as
                         exhibit 10.19 to the Company's Form 10-Q dated November
                         13, 1995 and incorporated herein by reference).



                                       43
<PAGE>



               10.20     Loan Agreement between Marker Deutschland and Hypo Bank
                         for a DM 1,180,100  loan (Filed as Exhibit 10.20 to the
                         Company's   Form  10-Q  dated   August  13,   1996  and
                         incorporated herein by reference).

               10.21     Second  Restated and Amended  Promissory Note Agreement
                         with Hypo Bank for a DM  7,284,205.42  loan.  (Filed as
                         exhibit 10.21 to the Company's Form 10-Q dated February
                         13, 1997 and incorporated herein by reference).

               10.22     Amended and Restated  Conditional  Pledge Agreement and
                         Assignment  with  Hypo  Bank  for a $2.0  million  time
                         deposit.  (Filed as exhibit 10.22 to the Company's Form
                         10-Q dated February 13, 1997 and incorporated herein by
                         reference).

               10.23     Bond  Payment   Extension   Agreement   between  Marker
                         International  and  Isomura  Sangyo  Kaisha  Ltd.  (the
                         Bondholder).  (Filed as exhibit  10.23 to the Company's
                         Form 10-K dated June 27, 1997 and  incorporated  herein
                         by reference).

               10.24     Loan Agreement between Marker International and Jackson
                         National Life Insurance Company for $2,250,000.  (Filed
                         as exhibit 10.24 to the Company's  Form 10-K dated June
                         27, 1997 and incorporated herein by reference).

               10.26     Second   Amended  and   Restated   Conditional   Pledge
                         Agreement and Assignment dated April 15, 1998,  between
                         Marker  International  and  Bayerische   Hypotheken-und
                         Wechsel-Bank  Aktiengesellschaft.   (Filed  as  exhibit
                         10.26 to the Company's  Form 10-Q dated August 19, 1998
                         and incorporated herein by reference).

               10.27     Third Restated and Amended  Promissory Note dated as of
                         April 15,  1998  executed by the Company and payable to
                         Bayerische         Hypotheken-und          Wechsel-Bank
                         Aktiengesellschaft.  (Filed  as  exhibit  10.27  to the
                         Company's   Form  10-Q  dated   August  19,   1998  and
                         incorporated herein by reference)

               10.28     Revolving  Credit  Agreement  dated  October 30,  1998,
                         between Marker  International  and First Security Bank,
                         N.A. (without  exhibits) (Filed as exhibit 10.28 to the
                         Company's   Form  10-Q  dated  November  20,  1998  and
                         incorporated herein by reference)

                                       44
<PAGE>

               10.29     Bond  Payment   Extension   Agreement   between  Marker
                         International  and  Isomura  Sangyo  Kaisha  Ltd.  (the
                         Bondholder) dated September 3, 1998.*

               10.30     Employment  Agreement  between  Peter Weaver and Marker
                         International dated October 8, 1998.*

               10.31     License  Agreement  between  Ski  &  Sports  Recreation
                         Company,  L.L.C.  and Marker  International  and Marker
                         Ltd. dated March 8, 1999*

               10.32     Agreement  dated  as of  March 8,  1999  between  Ski &
                         Sports Recreation  Company,  L.L.C. and Marker Ltd. and
                         Marker International.*

               10.33     Shareholders Agreement between CT Sports Holding AG and
                         Marker  International  and Marker Canada dated June 18,
                         1999  (Filed as exhibit  10.1 to Form 8-K filed on July
                         2, 1999).

               21.1      Subsidiaries of the Registrant.*

               23.1      Consent  of Arthur  Andersen  LLP,  independent  public
                         accountants.*

               27        Financial Data Schedule.*

(b)                      Reports Filed on Form 8-K:
                         --------------------------

                         Current  Report  on Form 8-K  filed on March  12,  1999
                         reporting  under Item 5 the  execution of the letter of
                         intent  with  CT  Sports   Holding  AG  regarding   the
                         restructuring of Marker.
-----------------------------
* filed herewith

                                       45
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                         ON FINANCIAL STATEMENT SCHEDULE


To Marker International:

We have audited in accordance with generally  accepted auditing  standards,  the
consolidated  financial statements of Marker International included in this Form
10-K, and have issued our report thereon dated June 30, 1999. Our audit was made
for the purpose of forming an opinion on the basic financial statements taken as
a whole.  Schedule II is the  responsibility of the Company's  management and is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and is not part of the  basic  financial  statements.  This
schedule has been subjected to the auditing  procedures applied in the audits of
the  basic  financial  statements  and,  in our  opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.



ARTHUR ANDERSEN LLP


Salt Lake City, Utah
June 30, 1999


                                       46
<PAGE>


<TABLE>
                              MARKER INTERNATIONAL
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                    FOR THE THREE YEARS ENDED MARCH 31, 1999
                                 (in thousands)
<CAPTION>

For the Year Ended:

                                 Balance at
                                Beginning of                             Amounts                             Balance at End
                                  Period            Provisions         Written Off         Other (1)           of Period
                                  ------            ----------         -----------         ---------           ---------
March 31, 1999

<S>                             <C>                 <C>                 <C>                 <C>                <C>
Allowance for doubtful
   accounts                     $    1,697          $   1,847           $  (1,691)          $   (132)          $    1,721


March 31, 1998

Allowance for doubtful
   accounts                     $    2,139          $     813           $  (1,176)          $    (79)          $    1,697


March 31, 1997

Allowance for doubtful
   accounts                     $    2,173          $     521           $    (431)          $   (124)          $    2,139

</TABLE>




(1) The  allowance for doubtful  accounts is  translated to U.S.  Dollars at the
exchange  rate at the end of a  reporting  period.  The  provision  and  amounts
written off are translated at the weighted-average  rates of exchange prevailing
during the reporting period. Amounts classified as "other" represent the effects
of foreign currency translation on the allowance amount for the period.


                                       47
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized in the City of Salt
Lake, and the State of Utah on July 14, 1999.

                              MARKER INTERNATIONAL
                              --------------------

                                                     By:/s/ Kevin Hardy
                                                        ---------------------
                                                        Kevin Hardy
                                                        Chief Financial Officer
<TABLE>
<CAPTION>
         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.
            Signature                            Title                                     Date
            ---------                            -----                                     ----

<S>                                <C>                                                 <C>
       /s/ Peter C. Weaver         Chief Executive Officer and President (Principal    July 14, 1999
       --------------------------                                                      -------------
         Peter C. Weaver           Executive Officer)

         /s/ Kevin Hardy           Chief Financial Officer                             July 14, 1999
       --------------------------                                                      -------------
           Kevin Hardy            (Principal Financial and
                                    Accounting Officer)

       /s/ John G. McMillian       Chairman of the Board, Marker International         July 14, 1999
       --------------------------                                                      -------------
        John G. McMillian

       /s/ Graham S. Anderson      Director                                            July 14, 1999
       --------------------------                                                      -------------
       Graham S. Anderson

       /s/ Vinton H. Sommerville   Director                                            July 14, 1999
       --------------------------                                                      -------------
       Vinton H. Sommerville

       /s/ Henry E. Tauber         Director                                            July 14, 1999
       --------------------------                                                      -------------
       Henry E. Tauber
</TABLE>


                                       48
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Marker International:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Marker
International (a Utah  corporation) and subsidiaries (the "Company") as of March
31,  1999 and 1998,  and the  related  consolidated  statements  of  operations,
shareholders' (deficit) equity and cash flows for each of the three years in the
period ended March 31, 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  financial  position of Marker  International  and
subsidiaries as of March 31, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended March 31,
1999 in conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial  statements,  the Company has incurred a net loss of $48.0 million for
the year ended  March 31,  1999,  and as of March 31,  1999 had a  shareholders'
deficit of $29.8 million.  The Company currently has inadequate  working capital
to fund  operations  and  service  repayment  of  debt.  The  Company  is not in
compliance with certain financial covenants and in default under its obligations
to certain creditors.  All of these and other matters raise substantial doubt as
to the Company's ability to continue as a going concern.  Management's  plans in
regards  to  these  matters  are  also  described  in Note 1.  The  accompanying
consolidated financial statements do not include any adjustments relating to the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.



ARTHUR ANDERSEN LLP


Salt Lake City, Utah
June 30, 1999

                                      F-1
<PAGE>


                      MARKER INTERNATIONAL AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                          AS OF MARCH 31, 1999 and 1998
                             (Dollars in Thousands)

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

                                     ASSETS

                                                             1999         1998
                                                          ----------  ----------

CURRENT ASSETS:
     Cash and cash equivalents                            $   5,547    $  4,241
     Accounts receivable, net of allowance for doubtful
         accounts of $1,721 and $1,697, respectively         22,392      31,710
     Inventories                                             18,752      37,223
     Prepaid and other current assets                           391       4,440
                                                          ---------    ---------
              Total current assets                           47,082      77,614
                                                          ---------    ---------

PROPERTY, PLANT AND EQUIPMENT:
     Land                                                       386       1,050
     Building and improvements                                4,645       7,581
     Machinery and equipment                                 20,096      21,222
     Furniture, fixtures and office equipment                 4,797       4,582
                                                          ---------    ---------
                                                             29,924      34,435
     Less accumulated depreciation                          (18,725)    (16,733)
                                                          ---------    ---------
              Net property, plant and equipment              11,199      17,702
                                                          ---------    ---------

INTANGIBLE ASSETS, net of accumulated amortization              244       8,322
                                                          ---------    ---------

OTHER ASSETS                                                    448       1,482
                                                          ---------    ---------
                                                          $  58,973    $105,120
                                                          =========    =========


           The accompanying notes to consolidated financial statements
           are an integral part of these consolidated balance sheets.


                                      F-2
<PAGE>

<TABLE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (Continued)
                          AS OF MARCH 31, 1999 and 1998
                (Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
-----------------------------------------------------------------------------------------

                 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

                                                                 1999            1998
                                                              ----------      ----------

<S>                                                         <C>            <C>
CURRENT LIABILITIES:
     Notes payable to banks                                 $    46,062    $    48,645
     Current maturities of long-term debt                         5,595          3,512
     Current maturities of Series A Bonds, issued to a
         related party                                           11,399          4,500
     Accounts payable                                             5,948          6,381
     Other current liabilities                                   12,937          7,830
                                                            -----------    -----------
              Total current liabilities                          81,941         70,868
                                                            -----------    -----------

LONG-TERM DEBT, net of current maturities                         3,821         14,898
                                                            -----------    -----------

SERIES A BONDS, net of current maturities, issued
     to a related party                                            --            5,500
                                                            -----------    -----------

REDEEMABLE  SERIES  B  PREFERRED  STOCK, $ 0.01 par
     value, 2,000,000 shares authorized,  1,000,000 shares
     issued and outstanding,  liquidation value of $3,169         3,000           --
                                                            -----------    -----------

MINORITY INTEREST                                                  --            1,447
                                                            -----------    -----------

COMMITMENTS AND CONTINGENCIES (Notes 1, 2, 5 and 9)

SHAREHOLDERS' (DEFICIT) EQUITY:
     Preferred stock, $0.01 par value, 5,000,000 shares
         authorized and none issued                                --             --
                                                            -----------    -----------
     Common stock, $0.01 par value, 30,000,000
         shares authorized and issued, shares outstanding
         11,140,577 and 11,130,577, respectively                    111            111
     Additional paid-in capital                                  36,311         36,299
     Accumulated deficit                                        (64,658)       (16,471)
     Accumulated other comprehensive loss                        (1,553)        (7,532)
                                                            -----------    -----------
              Total shareholders' (deficit) equity              (29,789)        12,407
                                                            -----------    -----------
                                                            $    58,973    $   105,120
                                                            ===========    ===========
</TABLE>

           The accompanying notes to consolidated financial statements
           are an integral part of these consolidated balance sheets.

<
                                      F-3
<PAGE>

<TABLE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED MARCH 31, 1999, 1998 and 1997
                (Dollars in Thousands, Except Per Share Amounts)

<CAPTION>

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

                                                                  1999        1998        1997
                                                               ----------  ----------  ----------
<S>                                                            <C>         <C>         <C>
NET SALES                                                      $ 74,167    $ 81,401    $ 83,076
COST OF SALES                                                    54,638      54,460      50,441
                                                               --------    --------    --------
GROSS PROFIT                                                     19,529      26,941      32,635
                                                               --------    --------    --------

OPERATING EXPENSES:
     Selling                                                     15,275      13,065      14,730
     General and administrative                                  15,401       7,475       8,616
     Research and development                                     2,756       3,003       2,996
     Warehousing and shipping                                     2,020       1,660       1,617
                                                               --------    --------    --------
                                                                 35,452      25,203      27,959
                                                               --------    --------    --------
OPERATING (LOSS) INCOME                                         (15,923)      1,738       4,676
                                                               --------    --------    --------
OTHER INCOME (EXPENSE):
     Interest expense                                            (6,637)     (5,746)     (5,109)
     Other, net                                                   1,508          33       2,814
                                                               --------    --------    --------
                                                                 (5,129)     (5,713)     (2,295)
                                                               --------    --------    --------
(LOSS) INCOME FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES                                        (21,052)     (3,975)      2,381
PROVISION FOR INCOME TAXES                                       (1,458)     (1,158)       (700)
                                                               --------    --------    --------
(LOSS) INCOME FROM CONTINUING
     OPERATIONS                                                 (22,510)     (5,133)      1,681
                                                               --------    --------    --------

DISCONTINUED OPERATIONS:
     (Loss) income from operations of discontinued snowboard
     business, net of income taxes                               (1,484)    (12,196)      2,921
     Loss on disposal of snowboard business                     (24,024)       --          --
                                                               --------    --------    --------

(LOSS) INCOME FROM DISCONTINUED OPERATIONS                      (25,508)    (12,196)      2,921
                                                               --------    --------    --------

NET (LOSS) INCOME                                              $(48,018)   $(17,329)   $  4,602
                                                               ========    ========    ========

PER SHARE INFORMATION (Basic and Diluted):
     (Loss) income from continuing operations                  $  (2.04)   $  (0.46)   $   0.16
                                                               --------    --------    --------
     (Loss) income from operations of discontinued
          snowboard business                                      (0.13)      (1.10)       0.29
     Loss on disposal of snowboard business                       (2.16)       --          --
                                                               --------    --------    --------
         (Loss) income from discontinued operations               (2.29)      (1.10)       0.29
                                                               --------    --------    --------

     Net (loss) income                                         $  (4.33)   $  (1.56)   $   0.45
                                                               ========    ========    ========
</TABLE>


           The accompanying notes to consolidated financial statements
             are an integral part of these consolidated statements.


                                      F-4
<PAGE>

<TABLE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY
                FOR THE YEARS ENDED MARCH 31, 1999, 1998 and 1997
                             (Dollars in Thousands)
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------



                                                                                                       Accumulated
                                                     Common Stock           Additional   Accumulated     Other        Total
                                                 ---------------------     Accumulated    Earnings    Comprehensive  Shareholder'
                                                  Shares      Amount         Paid-in     (Deficit)    Income (Loss) Equity (Deficit)
                                                 ---------   ----------   ------------ ------------  -------------- ----------------
<S>                                               <C>         <C>          <C>          <C>           <C>           <C>
BALANCE, MARCH 31, 1996                           8,447,877   $       84   $   21,531   $   (1,293)   $      446    $   20,768
Comprehensive Loss:
    Net income                                         --           --           --          4,602          --           4,602
    Foreign currency translation                       --           --           --           --          (6,011)       (6,011)
Total comprehensive loss                               --           --           --           --            --          (1,409)
Secondary public offering of common stock, net    2,680,000           27       14,753         --            --          14,780
Common stock options exercised                        1,250         --              9         --            --               9
Adjustment for change in reporting period of
     consolidated subsidiary                           --           --           --         (2,451)         --          (2,451)
                                                 ----------   ----------   ----------   ----------    ----------    ----------
BALANCE, MARCH 31, 1997                          11,129,127          111       36,293          858        (5,565)       31,697
Comprehensive Loss:
    Net loss                                           --           --           --        (17,329)         --         (17,329)
    Foreign currency translation                       --           --           --           --          (1,967)       (1,967)
Total comprehensive loss                               --           --           --           --            --         (19,296)
Common stock options exercised                        1,450         --              6         --            --               6
                                                 ----------   ----------   ----------   ----------    ----------    ----------
BALANCE, MARCH 31, 1998                          11,130,577          111       36,299      (16,471)       (7,532)       12,407
Comprehensive Loss:
    Net loss                                           --           --           --        (48,018)         --         (48,018)
    Foreign currency translation                       --           --           --           --           5,979         5,979
Total comprehensive loss                               --           --           --           --            --         (42,039)
Preferred stock dividends                              --           --           --           (169)         --            (169)
Common stock issued for services                     10,000         --             12         --            --              12
                                                 ----------   ----------   ----------   ----------    ----------    ----------
BALANCE, MARCH 31, 1999                          11,140,577   $      111   $   36,311   $  (64,658)   $   (1,553)   $  (29,789)
                                                 ==========   ==========   ==========   ==========    ==========    ==========

</TABLE>


           The accompanying notes to consolidated financial statements
             are an integral part of these consolidated statements.



                                      F-5
<PAGE>


<TABLE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED MARCH 31, 1999, 1998 and 1997
                Increase (Decrease) in Cash and Cash Equivalents
                             (Dollars in Thousands)

<CAPTION>
-------------------------------------------------------------------------------------------------------

                                                                      1999         1998         1997
                                                                    ----------  ----------  ----------
<S>                                                                 <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss) income                                               $(48,018)   $(17,329)   $  4,602
    Adjustments to reconcile net (loss) income to net cash
       (used in) provided by operating activities:
      Minority interest                                                 --          (183)      1,521
      Depreciation and amortization                                    5,151       5,200       4,386
      Equity in loss of unconsolidated subsidiary                       --          --           281
      Loss from consolidated subsidiary resulting from change in
         reporting period                                               --          --        (3,063)
      Loss from write down of goodwill and intangibles                 8,000       8,000        --
      Loss (gain) on sale of property, plant and equipment               959         (92)        444
      Change in assets and liabilities (net of amounts acquired):
          Accounts receivable, net                                     9,912      (6,302)     (3,109)
          Inventories                                                 19,464      (5,721)     (3,596)
          Prepaid and other assets                                     5,521         131       2,876
          Accounts payable                                               214         842      (1,015)
          Other current liabilities                                    3,756        (369)        875
                                                                    --------    --------    --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                    4,959     (15,823)      4,202
                                                                    --------    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property, plant and equipment                        (3,635)     (7,138)    (10,269)
    Majority purchase of DNR, net of cash acquired ($5,263)
                                                                        --          --       (14,560)
    Proceeds from disposition of equipment                             4,579       3,898         143
                                                                    --------    --------    --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                      944      (3,240)    (24,686)
                                                                    --------    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings (repayments) on notes payable to banks             (1,912)     11,860      12,060
    Issuance of preferred stock                                        3,000        --          --
    Issuance of common stock, net of issuance costs                       12        --        14,780
    Proceeds from common stock options exercised                        --             6           9
    Proceeds from issuance of long-term debt                             393       3,094      10,385
    Redemption of Series A Bonds                                        --          --        (3,500)
    Principal payments on long-term debt                             (10,443)     (3,299)     (3,176)
                                                                    --------    --------    --------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                   (8,950)     11,661      30,558
                                                                    --------    --------    --------
Effect of foreign exchange rate changes on cash                        4,353      (1,889)     (2,731)
                                                                    --------    --------    --------
Net increase (decrease) in cash and cash equivalents                   1,306      (9,291)      7,343
Cash and cash equivalents at beginning of year                         4,241      13,532       6,189
                                                                    --------    --------    --------
CASH AND CASH EQUIVALENTS AT END OF YEAR                            $  5,547    $  4,241    $ 13,532
                                                                    ========    ========    ========

</TABLE>


           The accompanying notes to consolidated financial statements
             are an integral part of these consolidated statements.


                                      F-6
<PAGE>


NOTE 1.  NATURE OF OPERATIONS,  LIQUIDITY AND SUMMARY OF SIGNIFICANT  ACCOUNTING
POLICIES

Nature of Operations

         Marker  International  ("Marker" or the "Company") is a holding company
which  operates  through its  subsidiaries,  Marker  Deutschland  GmbH  ("Marker
Germany"),  Marker USA, Marker Japan Co., Ltd. ("Marker Japan"),  Marker Austria
GmbH ("Marker Austria") and Marker Canada,  Ltd. ("Marker Canada") (see "Sale of
Marker Canada Interest" below).  Substantially all of the Company's ski bindings
are manufactured by Marker Germany,  which also distributes bindings in Germany,
to  subsidiaries  of the Company and to  independent  distributors  in countries
where the Company does not have a distribution  subsidiary.  Marker Ltd., also a
subsidiary  of the Company,  designs,  distributes  and sells to  retailers  the
Company's   clothing,   gloves  and  luggage   products  for  skiing  and  other
recreational  activities.  Effective April 1, 1999, the Company licensed Ski and
Sports Recreation Company,  L.L.C. to manufacture and sell apparel,  luggage and
glove  utilizing  the Marker  name.  The  principal  markets  for the  Company's
products are North America, Europe and Asia.

         During fiscal 1999, the Company  decided to  discontinue  its snowboard
business which was primarily operated through DNR Sportsystem Ltd., an 80% owned
subsidiary of Marker AG, a wholly owned subsidiary of the Company,  and Marker's
wholly-owned  subsidiaries,  DNR USA, Inc. DNR North America, Inc. and DNR Japan
Co. Ltd. (See "Discontinued Operations" below).

         The  Company's  financial  statements  have  been  prepared  on a going
concern basis,  which  contemplates the realization of assets and the settlement
of liabilities  and  commitments  in the normal course of business.  The Company
incurred a net loss of approximately  $48.0 million for the year ended March 31,
1999 and as of March 31, 1999 had a shareholders' deficit of approximately $29.8
million.  The Company was not in compliance  with  covenants of various debt and
other  obligations and has insufficient  working capital to fund operations (See
Notes 2, 3 and 9 for a discussion  of  obligations  in default).  These  factors
among others, raise substantial doubt about the Company's ability to continue as
going concern. The accompanying consolidated financial statements do not include
any  adjustments  relating to the  recoverability  and  classification  of asset
carrying  amounts or the amount and  classification  of  liabilities  that might
result should the Company be unable to continue as a going concern.

         Management's  plans with respect to these matters include,  among other
things, restructuring the Company's obligations, obtaining additional financing,
entering into the Asset Purchase  Agreement with CT Sports Holding AG and filing
a voluntary  petition  for relief  under  Chapter 11 of the United  States Code.
Management is actively pursuing these plans as discussed below.  There can be no

                                      F-7
<PAGE>

assurance  that the Company  will be  successful  in such  endeavors or that the
Company will not be forced into an involuntary bankruptcy in the near term.

         Letter of Intent  with CT Sports  Holding  AG - On March 7,  1999,  the
Company  signed a letter of intent with CT Sports  Holding  AG, a Swiss  company
("CT Sports"),  pursuant to which the Company will transfer substantially all of
its  assets  and  certain  liabilities  under  a  confirmed  chapter  11 plan of
reorganization  to a newly formed  entity  ("Newco").  In exchange,  Marker will
receive a 15% equity  interest  in Newco,  subject to possible  adjustment.  The
remaining  85% equity  interest in Newco will be issued to CT Sports in exchange
for $15 million in cash  (subject to reduction by  $1,025,501 as a result of the
consummation of the transactions under the Marker Canada, Ltd. ("Marker Canada")
Shareholders  Agreement  described  below).  CT Sports is a newly formed  entity
owned by Tecnica S.p.A. and H.D. Cleven, the principal  shareholder of the Volkl
Group.

         Under the letter of intent, Marker  International,  DNR USA, Inc. ("DNR
USA"), and DNR North America,  Inc. ("DNR North America") are required to file a
petition  for  relief  under  Chapter 11 of the United  States  Bankruptcy  Code
("Chapter  11")  within  14  days  of the  execution  of a  definitive  purchase
agreement.  Following  the execution of the purchase  agreement,  Marker will be
obligated to pay a $1.0 million  break-up fee to CT Sports if the acquisition is
not consummated and (i) Marker consummates any plan of reorganization other than
the plan agreed upon by CT Sports,  or (ii) Marker  consummates  any sale of its
stock or assets other than as contemplated by the purchase  agreement upon terms
more favorable to the  shareholders of Marker (an  "Alternative  Sale").  Marker
will not be obligated to pay the break-up fee if Marker's  failure to consummate
the acquisition is due to (i) circumstances beyond its control, Marker is not in
material  breach of the purchase  agreement  and Marker has not  consummated  an
Alternative  Sale,  or (ii) a  material  breach  by CT  Sports  of the  purchase
agreement. Marker is also required to reimburse CT Sports and its affiliates for
actual costs and expenses  incurred by them in connection  with the  acquisition
unless (i) either the letter of intent or the purchase  agreement is  terminated
in accordance  with terms or as a result of a material  breach by CT Sports,  or
(ii) CT Sports elects to abandon the acquisition.

         The letter of intent  requires a period of exclusivity  and cooperation
from  Marker.  There  are  numerous  conditions  to  CT  Sport's  obligation  to
consummate the acquisition. Such conditions include, but are not limited to, (a)
Newco  entering  into  employment   agreements  with  key  members  of  Marker's
management,  (b)  satisfactory  due diligence,  (c) there not being any material
adverse change in the business of the Company, (d) Marker and CT Sports entering
into  lockup  agreements  with a  majority  of  Marker's  shareholders  and  (e)
acceptable pre-bankruptcy agreements with key creditors.


                                      F-8
<PAGE>

         Marker  is  currently  in the  process  of  negotiating  the  terms and
conditions of a definitive  purchase agreement with CT Sports and is negotiating
with  certain of its  creditors  in order to satisfy  certain of the  conditions
precedent to the  acquisition.  There can be no assurance that Marker will enter
into a definitive purchase agreement with CT Sports on the terms contemplated in
the  letter of intent or that  Marker  will be able to  satisfy  the  conditions
precedent under any such agreement.

         The  transaction  does not require the  Company's  other  subsidiaries,
including Marker USA, Marker Japan,  Marker Ltd., Marker Austria , Marker Canada
and Marker  Germany,  to file a voluntary  petition for relief under  Chapter 11
and,  therefore,  the Company  currently  does not anticipate  filing  voluntary
petitions for these subsidiaries.

         Sale of Marker Canada  Interest - On June 18, 1999,  CT Sports,  Marker
International,  Marker Canada and Lapointe Rosenstein,  as escrow agent, entered
into a shareholders  agreement (the "Shareholders  Agreement") pursuant to which
CT Sports  purchased 200 class "A" shares of Marker Canada for a purchase  price
of Cdn $1.5 million  (U.S.  $1.0  million).  The 200 class "A" shares  represent
66.66% of the outstanding voting and participating  shares of Marker Canada. The
remaining  100 class "A"  shares,  representing  33.33% of the  outstanding  and
voting shares,  are held by the Company.  The purpose of this transaction was to
provide working capital to Marker Canada.

         CT Sports  will hold its 200 shares in the name of and on the behalf of
Marker  International GmbH (in foundation),  which upon formation will be deemed
to be the  shareholder  of such shares.  The purchase  price of Cdn $1.5 million
(U.S.  $1.0 million)  will be deducted from the U.S. $15 million  required to be
contributed by CT Sports to Newco pursuant to the purchase agreement between the
Company and Newco (the  "Asset  Purchase  Agreement").  CT Sports has the option
(the "Option") to require Marker to sell to CT Sports all of Marker's 100 shares
of Marker Canada for a purchase price of Cdn $750,000 ($0.5  million),  less all
amounts then payable by Marker or any of its  subsidiaries to Marker Canada,  CT
Sports or any subsidiary or affiliate of CT Sports. The Option is exercisable if
(i) the  transactions  contemplated  by the  Asset  Purchase  Agreement  are not
consummated  on or  before  December  31,  1999,  (ii)  Marker  or  any  of  its
subsidiaries  is acquired by, merges with or sells all or a substantial  part of
its assets or securities to a person other than CT Sports,  its  subsidiaries or
affiliates,  (iii) Marker makes a motion or application in the bankruptcy  court
to reject the Option,  or (iv) Marker contests the validity or enforceability of
the Option or denies it has any obligations under the Shareholders Agreement.

         In connection with the Shareholders Agreement,  each of Marker, Tecnica
S.p.A.  and the Volkl Group  entered into  distribution  agreements  with Marker
Canada granting Marker Canada the exclusive right to distribute certain products
in Canada for a period of five years.


                                      F-9
<PAGE>


         License of Apparel  Business - On March 8, 1999, the Company and Marker
Ltd., entered into a license agreement granting Ski & Sports Recreation Company,
L.L.C.  ("SSRC") an exclusive,  worldwide right to manufacture,  market and sell
the Company's  clothing,  gloves and luggage  products (the "Apparel  Business")
utilizing  the  Marker  tradename  in return  for  royalty  payments  equal to a
percentage  of net sales which  ranges  from 3% to 5%. The  initial  term of the
agreement  is from April 1, 1999  through  March 31,  2009 and is  automatically
extended for  additional  one year periods  unless  sooner  terminated by either
party in accordance  with the agreement.  The Company has the right to terminate
the license  agreement in the event annual sales fall below a certain level.  In
addition,  the Company has an option for the 24 month period commencing on April
1, 1999 and ending on March 31, 2001 to acquire by assignment  all of the rights
of SSRC under the license  agreement  for a formula  price  based upon  earnings
before  interest and taxes as set forth in the Option and Right of First Refusal
Agreement  dated March 8, 1999  between  the  Company and Marker Ltd.  and SSRC.
Further,  the Company has a right of first refusal  through March 31, 2002 as to
any  sale  or  transfer  of the  business  and  assets  used  by  SSRC  for  the
manufacture,  sale and marketing of the Apparel Business. In connection with the
license  agreement,  SSRC agreed to purchase  certain  assets of Marker Ltd. for
$859,000,  of which  $450,000  was paid at closing,  $204,500 is due on July 10,
1999 and  $204,500 is due on August 31, 1999.  With  respect to certain  Olympic
inventory,  SSRC  agreed to pay 60% to 75% of the net sales price to the Company
as the sales price is received.

         Marker Germany and Marker Austria  Stockholder's  Deficit - As of March
31, 1999,  Marker Germany and Marker  Austria,  on a stand alone  unconsolidated
basis, each had a net stockholder's  deficit.  Under the applicable foreign laws
and  regulations,  in order  to avoid  bankruptcy  proceedings,  these  entities
require additional capital infusions. Marker and CT Sports are in the process of
negotiating  the Asset Purchase  Agreement and debt  restructuring  arrangements
with certain of Marker's  creditors.  If  successful,  these  negotiations  will
result in capital  infusions  which will  increase the  stockholder's  equity of
these entities. There can be no assurance that the Company will be successful in
increasing  stockholder's  equity at a level sufficient to avoid such bankruptcy
proceedings.

         Non-compliance with Debt Covenants / Defaults / Debt Restructuring - In
connection with the letter of intent, Marker and CT Sports are in the process of
negotiating  restructuring  arrangements with Marker's key creditors.  CT Sports
has entered into an agreement with the Series A bondholder  whereby the Series A
Bonds will be reduced to an aggregate principal amount of $5,750,000 and payable
in four equal annual  installments of $750,000 with  $2,750,000  payable after 5
years. The agreement also requires  interest payments at 2% per annum during the
first four years, and thereafter a variable rate not exceeding the prime rate on
commercial  loans in Japan plus 0.5%.  The agreement  also requires that certain
personal  guarantees of Eiichi  Isomura on Marker  Japan's debt  obligations  be
satisfied commencing on the sixth anniversary of the bankruptcy court confirming
a plan of  reorganization.  The  agreement  with  the  Series  A  bondholder  is
conditioned upon, among other things, Marker entering into a definitive purchase
agreement with CT Sports.  In addition,  the Company has reached a restructuring
agreement with its equipment  lessor,  Zions Bank (see Note 5). To date,  Marker
and  CT  Sports  have  not  entered  into a  definitive  purchase  agreement  or
definitive agreements with any of the Company's other creditors. There can be no
assurance that the Company will reach satisfactory  agreements with CT Sports or
the Company's creditors.  In addition, many of the Company's debt agreements are
in technical  default (see Notes 2 and 3). The  Company's  creditors  may demand
immediate  payment of amounts due,  foreclose on the Company's  assets which are
pledged as collateral  under the  agreements or exercise  other legal  remedies,
including  forcing  the Company  into an  involuntary  bankruptcy.



                                      F-10
<PAGE>

Discontinued Operations

         On  September  10,  1998,   the  Board  of  Directors   authorized  the
disposition  of  the  snowboard  operations  of the  Company.  The  Company  has
substantially  completed the process of exiting the snowboard  business  through
dissolution  and sale of its  snowboard  subsidiaries  and  related  assets.  On
December 14, 1998,  the Company  sold its 80%  interest in DNR  Sportsystem  for
nominal  consideration  and  the  elimination  of all  outstanding  intercompany
balances.  On December  31,  1998,  the Company  sold the building and land that
housed the Company's  snowboard  manufacturing  operations for $3.1 million.  On
January 14, 1999, the Company's  leased  snowboard  manufacturing  equipment was
disposed of through an auction and the net  proceeds of the auction were paid to
the equipment lessor. The Company has a remaining  obligation of $1.7 million to
the lessor, which is included in the liabilities of continuing  operations.  The
Company is  currently in the process of  collecting  its  remaining  outstanding
snowboard receivables of $171,000, net of allowance for doubtful accounts, as of
March 31,  1999,  which will  complete  the  Company's  exit from the  snowboard
business.

         The components of net assets of discontinued operations included in the
consolidated  balance sheets at March 31, 1999 and 1998,  respectively,  were as
follows:

                                                       March 31,       March 31,
                                                         1999            1998
                                                       --------        ---------
                                                             (in thousands)
Accounts receivable, net                                $   171         $ 3,781
Inventories                                                --             4,995
Prepaid and other current assets                              9           1,611
Current portion of long-term debt                          --              (806)
Accounts payable                                             (8)         (2,276)
Other current liabilities                                (2,032)         (1,650)
                                                        -------         -------
         Net current assets                             $(1,860)        $ 5,655
                                                        =======         =======

Net property, plant and equipment                       $  --             4,538
Intangible assets, net                                     --             7,909
Other assets                                               --               273
Long-term liabilities                                      --            (2,320)
Minority interest                                          --            (1,447)
                                                        -------         -------
         Net long-term assets                           $  --           $ 8,953
                                                        =======         =======

                                      F-11
<PAGE>

         As of March 31, 1999, the  liabilities of the  discontinued  operations
exceeded  the  assets by  approximately  $1.9  million.  The net losses of these
operations prior to September 1998 are included in the  consolidated  statements
of operations  under "loss (income) from  operations of  discontinued  snowboard
business."  Revenues from the discontinued  operations were  approximately  $3.3
million,  $12.9  million and $43.3  million for the fiscal years ended March 31,
1999,  1998 and  1997,  respectively.  The  (loss)  income  from  operations  of
discontinued  snowboard  business has been  reflected  net of income tax benefit
(provision)  of  $134,000,  $636,000 and  $(956,000)  for the fiscal years ended
March  31,  1999,  1998 and  1997,  respectively.  The loss on  disposal  of the
snowboard  business  reflected  in the  consolidated  statements  of  operations
includes the write-down of assets and the estimated  costs of disposing of these
operations.  The  significant  components  of this loss include the write-off of
intangible  assets,  the loss on the  sale of the  Company's  investment  in DNR
Sportsystem Ltd., realization of foreign currency translation losses, write-down
of   inventories   and   receivables,   reserves   for  losses  on   terminating
non-cancelable  operating  leases and write-down of property and equipment.  The
disposal estimates  represent  management's best estimates of the potential loss
based upon  available  information.  However,  actual  results could differ from
those estimates.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Consolidation

         The consolidated  financial  statements  include the accounts of Marker
International  and its  subsidiaries.  All material  inter-company  accounts and
transactions have been eliminated in consolidation.

Foreign Currency Translation

         The  functional  currency for the Company's  foreign  operations is the
applicable local currency: Marker Germany - Deutsche Marks, Marker Japan and DNR
Japan -  Japanese  Yen,  Marker  Canada -  Canadian  Dollars,  Marker  Austria -
Austrian Schillings and DNR Sportsystem - Swiss Francs. The financial statements
of foreign  subsidiaries  are translated  into U.S.  Dollars in accordance  with
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  52.  Assets  and
liabilities  of foreign  subsidiaries  are translated  into U.S.  Dollars at the


                                      F-12
<PAGE>

applicable  rates of exchange  at the end of the  reporting  period.  Income and
expense  items  are  translated  at  the  weighted  average  rates  of  exchange
prevailing  during the period.  Translation  gains and losses are reflected as a
separate  component of  shareholders'  (deficit)  equity as  "accumulated  other
comprehensive loss."

Cash and Cash Equivalents

         Cash  and cash  equivalents  include  investments  in  certificates  of
deposit with original maturities of less than 30 days. As of March 31, 1999, the
Company has granted a security  interest in a $2.0  million time deposit held in
the Company's  name at a United States branch of a German bank.  This deposit is
restricted  for use as collateral on  borrowings  from such bank,  which totaled
$3.5  million  at March 31,  1999.  On April 19,  1999,  pursuant  to an amended
promissory  note,  the bank  applied  the  proceeds  of the time  deposit to the
outstanding  balance  on its  note  due to the  nonpayment  of a  principal  and
interest  payment due on April 15, 1999. The Company is currently in the process
of  restructuring  the remaining  balance of $1.5 million.  In the event that an
agreement is not reached,  the bank could  proceed to obtain a judgment  against
the Company and force the Company into an involuntary bankruptcy.

Accounts Receivable - Seasonality

         The Company has certain sales programs, which result in the majority of
the annual net sales  occurring  in the second and third  fiscal  quarters.  The
balance of the  annual  net sales  occurs  primarily  during  the fourth  fiscal
quarter. In accordance with industry practice,  the Company grants payment terms
to its  customers in excess of 30 days.  As of March 31,  1999,  the Company had
certain  accounts  receivable  from  customers  which  are not due for  over ten
months.

Inventories

         Inventories  include direct  materials,  direct labor and manufacturing
overhead  costs and are  recorded  at the  lower of cost  (using  the  first-in,
first-out method) or market. The major classes of inventories are as follows (in
thousands):
                                                          March 31,
                                                -----------------------------
                                                    1999               1998
                                                  -------             -------
              Raw materials                     $      542         $    1,411
              Work in process                        1,821              2,306
              Finished goods                        16,389             33,506
                                                ----------         ----------
                                                $   18,752         $   37,223
                                                ==========         ==========

                                      F-13
<PAGE>

Property, Plant and Equipment

         Property, plant and equipment are recorded at cost. Major additions and
improvements are capitalized,  while costs for minor  replacements,  maintenance
and repairs  that do not  increase  the useful life of an asset are  expensed as
incurred.

         For financial  reporting  purposes,  the provision for depreciation and
amortization is determined using the straight-line  method based on the expected
remaining economic useful lives of the assets as follows:

                  Description                         Useful Lives
                  -----------                         ------------
         Machinery and equipment                      2 - 10 years
         Furniture, fixtures and office equipment     2 - 10 years
         Building and improvements                    2 - 40 years

         For the year ended March 31,  1997,  the Company  capitalized  interest
costs totaling approximately $237,000,  related to the construction of corporate
facilities. No interest was capitalized during fiscal 1998 or 1999.

Accounting for the Impairment of Long-Lived Assets

         The Company  reviews  long-lived  assets for impairment  when events or
changes  in  circumstances  indicate  that the book value of an asset may not be
recoverable.  The Company evaluates,  at each balance sheet date, whether events
and circumstances have occurred that indicate possible  impairment.  The Company
uses an estimate of future undiscounted net cash flows of the related asset over
the remaining life in measuring whether the assets are recoverable.

         The Company has evaluated the recoverability of its net property, plant
and  equipment at March 31, 1999 assuming that the Company will be successful in
restructuring  the  Company's  obligations,   obtain  additional  financing  and
continue  as a  going  concern.  Net  property,  plant  and  equipment  consists
primarily of the  Company's  manufacturing  equipment in Germany of $7.5 million
and its U.S. corporate headquarters and distribution facility of $3.0 million at
March 31,  1999.  The  accompanying  consolidated  financial  statements  do not
include any adjustments  relating to the  recoverability  and  classification of
property,  plant and  equipment  carrying  amounts that might result  should the
Company  be  unsuccessful  in  restructuring  its  obligations  and be unable to
continue as a going concern.

                                      F-14
<PAGE>

Intangible Assets

         As of March 31, 1999,  intangible  assets consisted of the distribution
rights for Tecnica and Volkl  products  that were  purchased  in January 1998 as
part of the process of establishing a new distribution  entity in Canada.  These
assets are amortized using the  straight-line  method over 3 years. At March 31,
1999, accumulated  amortization on intangible assets was approximately $173,000.
Intangible  assets as of March 31, 1998 also consisted of goodwill,  trade names
and licenses  resulting from the Company's  acquisition of a snowboard  business
(See Note 8).

         During fiscal 1998,  the Company  recorded an  impairment  loss of $8.0
million related to the intangible assets of its snowboard business. In addition,
as part of the Company's  exit from the snowboard  business in fiscal 1999,  the
Company  wrote-off  the  remaining  intangible  assets  of $8.0  million.  These
write-offs have been classified as part of the loss on discontinued operations.

Revenue Recognition

         Revenue is recognized when products are shipped to the customer.

Advertising

         The Company expenses  advertising  costs the first time the advertising
takes  place.  For the years ended March 31,  1999,  1998 and 1997,  advertising
expenses  totaled  approximately  $3.9  million,  $4.4 million and $3.3 million,
respectively.

Income Taxes

         The Company  recognizes  deferred  income tax assets or liabilities for
expected  future tax  consequences  of events that have been  recognized  in the
financial  statements  or tax returns in different  periods.  Under this method,
deferred  income  tax  assets  or  liabilities  are  determined  based  upon the
difference  between the financial and income tax bases of assets and liabilities
using enacted tax rates  expected to apply when  differences  are expected to be
settled or realized.

Fair Value of Financial Instruments

         The  Company  believes  that the fair value of its  long-term  debt and
preferred  stock could be less than its book value due to the current  financial
position of the Company.  Information relating to carrying amount, interest rate


                                      F-15
<PAGE>


and maturity dates is disclosed in Notes 2 and 3. It was not practicable for the
Company to estimate the fair value of its long-term  debt and  preferred  stock,
for  which  a  quoted  market  price  was not  available,  because  the  cost of
determining fair value would be unreasonable. The Company believes that the book
value of all other  financial  instruments  approximates  fair value  except for
derivatives (see Note 9).

Per Share Information

         Basic net income (loss) per common share (Basic EPS) excludes  dilution
and is computed by dividing net income (loss) applicable to common  shareholders
by the weighted  average  number of common shares  outstanding  during the year.
Diluted net income (loss) per common share  (Diluted EPS) reflects the potential
dilution  that could occur if stock  options were  exercised  or converted  into
common stock.  The  computation of Diluted EPS does not assume exercise of stock
options  and  conversion  of  preferred  stock that would have an  anti-dilutive
effect on net income (loss) per common share.

         The following is a reconciliation of the numerators and denominators of
the basic and diluted EPS computations (in thousands, except per-share amounts):
<TABLE>
<CAPTION>

                                     1999                           1998                                1997
                       --------------------------------   -----------------------------    -------------------------------
                         (Loss)      Shares   Per-Share   Income      Shares  Per-Share       Income    Shares   Per-Share
                         (Num.)     (Denom.)    Amount    (Num.)     (Denom.)   Amount        (Num.)   (Denom.)    Amount
<S>                    <C>           <C>      <C>       <C>           <C>      <C>          <C>          <C>      <C>
Basic EPS              $(48,187)     11,136   $ (4.33)  $(17,329)     11,130   $(1.56)      $  4,602     10,285   $  0.45
  Dilutive options         --          --         --        --          --        --             --          51       --
                       --------    --------   --------  --------    --------   ----------   --------   --------   -------
Diluted EPS            $(48,187)     11,136   $ (4.33)  $(17,329)     11,130   $(1.56)$     $  4,602   $ 10,336   $  0.45
                       ========    ========   ========  ========    ========   ==========   ========   ========   =======
</TABLE>



         The net loss used in the  numerator of Basic and Diluted EPS for fiscal
1999 was adjusted for redeemable Series B Preferred Stock dividends of $169,000.
For the years ended March 31, 1999 and 1998, there were outstanding  options and
warrants to purchase a total of 1,763,300 and 1,076,300  shares of common stock,
respectively,  that were not  included  in the  computation  of Diluted  EPS. In
addition,  the assumed  conversion of Series B Preferred Stock is not considered
in the computation of Diluted EPS for fiscal 1999. For fiscal year 1997, certain
options and  warrants  were not  included  because the  exercise  prices of such
options  and  warrants  were  greater  than the average  market  price of common
shares.  For fiscal  years 1999 and 1998,  the  options  and  warrants  were not
included because the Company incurred a net loss.

Foreign Exchange Contracts

         The  Company  enters  into  foreign  exchange  contracts  to reduce the
potential  impact  of  unfavorable   fluctuations  in  foreign  exchange  rates.
Contracts  that  are  intended  to  hedge  firm  commitments  are  deferred  and
recognized as part of the


                                      F-16
<PAGE>


cost of the  underlying  transaction  being hedged.  Gains and losses on foreign
exchange  contracts  that do not  qualify as hedges are  reported  currently  in
income.  During fiscal 1999,  given the financial  position of the Company,  the
Company  determined  that all gains and  losses on  foreign  exchange  contracts
should be reported in income (see Note 9).

Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments
and Hedging  Activities"  ("SFAS 133").  SFAS 133 establishes new accounting and
reporting  standards  for  companies  to  report  information  about  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts  (collectively referred to as derivatives) and for hedging activities.
This  statement  is effective  for  financial  statements  issued for all fiscal
quarters of fiscal  years  beginning  after June 15,  2000.  The Company has not
determined if it will adopt SFAS 133 prior to its effective date. The Company is
unable to determine  if this  pronouncement  will have a material  impact on the
Company's result of operations, financial position or liquidity.

Reclassifications

         Certain  reclassifications  have been made in prior years' consolidated
financial statements to conform to the current year's presentation.

                                      F-17
<PAGE>


NOTE 2.  NOTES PAYABLE TO BANKS AND LONG-TERM DEBT
<TABLE>
         Notes  payable to banks at March 31,  1999 and 1998,  consisted  of the
following:
<CAPTION>
                                                                                     1999                  1998
                                                                                   -------                -------
                                                                                            (in thousands)
<S>                                                                             <C>                  <C>
Credit  arrangement  with three  German  banks,  with  maximum  borrowing  of DM
   58,659,000 ($32.3 million).  The arrangement  provides for maximum borrowings
   at the bank's base rate or a  combination  of  borrowings  at the bank's base
   rate.  Amounts  outstanding  at March 31, 1999  consisted  of Euroloans of DM
   45,000,000 ($24.8 million), bearing interest rates ranging from 3.7% to 4.17%
   subject to an interest cap for DM 5,000,000 ($2.8 million),  which limits the
   interest rate to a maximum rate of 6%, and current  accounts of DM 13,659,000
   ($7.5 million). Borrowings are secured by the accounts receivable,  inventory
   and equipment of Marker  Germany and are  guaranteed by Marker  International
   and Marker USA. The agreement with the banks extends through March 31, 1999.  $   32,304           $   19,379

Credit  arrangements  with three Japanese banks,  with maximum  borrowing of YEN
   1,450,000,000  ($10,884,000),  subject to approval by the bank.  At March 31,
   1999, YEN 189,000,000  ($1,590,000) of borrowings were  outstanding  with the
   interest  rate at 2.0%,  due in  installments  at various dates through March
   2000; YEN 89,000,000 ($749,000) secured by the assets of a former director of
   the   Company   and  YEN   100,000,000   ($841,000)   guaranteed   by  Marker
   International.                                                                     1,590                3,153

Line of credit with First  Security  Bank,  maximum  borrowings of  $33,600,000,
   subject to a borrowing  base  limitation.  Interest at the bank's  prime rate
   plus 0.5% (8.75% at March 31, 1999)  secured by the accounts  receivable  and
   inventory  of Marker USA and Marker  Ltd.  and by the land and  buildings  of
   Marker  International.  The line of credit agreement expires, as extended, on
   July 31, 1999.                                                                    10,636                24,901

Credit   arrangement   with  Royal  Bank  of  Canada,   maximum   borrowings  of
   CND$3,000,000  ($1,988,400).At March 31, 1999, CND$2,312,000 ($1,532,000) was
   outstanding.  Interest  accrues at the bank's prime rate plus 1.25% (8.00% at
   March 31,  1999).  Amounts  are  secured by  inventory  of Marker  Canada and
   guaranteed  by  Marker  International  and  Marker  USA.  The line of  credit
   agreement expires August 1999.                                                     1,532                 1,212
                                                                                 ----------            ----------
                                                                                 $   46,062            $   48,645
                                                                                 ==========            ==========

</TABLE>

         For the years  ended  March 31,  1999 and 1998,  the  weighted  average
interest rate on short-term  borrowings  outstanding at year end was 5.4 percent
and  6.5  percent,   respectively,   the  maximum  short-term  borrowing  amount
outstanding during such years was $78.9 million and $74.2 million, respectively,
the  average  amount  outstanding  during the years was $64.4  million and $58.8
million,  respectively, and the weighted average interest rate during such years
was 6.3 percent and 6.1 percent, respectively.

         At  March  31,  1999,  the  Company  had  approximately  $47.0  million
available   borrowings  under  lines  of  credit,   of  which  it  had  borrowed
approximately $46.1 Million.


                                      F-18
<PAGE>

         On March 31, 1999,  the Company's DM 58.7 million (U.S.  $32.3 million)
line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank  expired.
HypoVereinsbank  and  Deutsche  Bank AG have  agreed to extend the  credit  line
through August 31, 1999 based on numerous  conditions.  Such conditions include,
but are not limited to, (i) the  consummation  of the Asset  Purchase  Agreement
(ii) Marker and CT Sports  entering  into lockup  agreements  with a majority of
Marker's  shareholders  and  acceptable   pre-bankruptcy   agreements  with  key
creditors,  and (iii) product purchase guarantees by CT Sports.  There can be no
assurance  that the Company will be successful in meeting these  conditions.  In
the event that the Company is unable to meet these conditions,  the German banks
could  terminate  the bank  line  immediately  and  force  the  Company  into an
involuntary bankruptcy.

         The Company is not in compliance  with several loan covenants under the
terms and conditions of the revolving  credit  agreement among the Company,  its
U.S. subsidiaries and First Security Bank. On June 14, 1999, First Security Bank
notified the Company that the termination of the Netting Agreement with M&T Bank
constituted  a default  under the revolving  credit  facility.  Also, as of June
30,1999,  the Company's  outstanding  balance on its line of credit exceeded the
available  borrowing  base  for a  period  greater  than  the ten day  mandatory
repayment  period  allowed  under the  revolving  credit  agreement  which  also
constitutes a default. As of July 14, 1999, First Security Bank had not declared
the line of credit in default, but has reserved the right to do so. In the event
that the bank declares the line of credit in default,  the bank can exercise its
rights  to  demand  payment  of all  amounts  due  under  the  revolving  credit
agreement,  foreclose on the  Company's  assets which are pledged as  collateral
under the agreement, or force the Company into an involuntary bankruptcy.  There
can be no assurance that the Company will be able to cure its  non-compliance or
reach a satisfactory agreement with the bank.

         As of March 31, 1999, the Company was not in compliance  with a minimum
tangible net worth  covenant  under a $3.0 million  Canadian  Dollar (U.S.  $2.0
million) line of credit  agreement with the Royal Bank of Canada ("Royal Bank").
The Company was also not in compliance with margin  requirements  under the same
line of credit as of March 31, 1999.  On June 22, 1999,  the Royal Bank notified
the Company of several terms and conditions that it requires the Company to meet
in order for the Royal Bank to continue to provide financing to the Company. The
Company is currently in the process of  attempting  to comply with the terms and
conditions  that the Royal Bank has outlined in its letter and is in the process
of negotiating with a new lender in order to obtain financing. In the event that
non-compliance is not cured or waived, the Royal Bank may exercise its rights to
demand payment of all amounts due and/or foreclose on the Company's assets which
are  pledged  as  collateral  under  the  agreement  which  could  also  lead to
cross-defaults  under the Company's other credit  arrangements.  There can be no
assurance  that the  Company  will be able to cure its  non-compliance,  reach a
satisfactory agreement with Royal Bank or secure financing from a new lender.

                                      F-19
<PAGE>

         As of June 30, 1999, the Company had not been formally notified that it
is in current  default on the credit  arrangements  with its German and Japanese
banks. However, given the defaults on the other agreements,  it is possible that
these agreements could be declared in default in the near term.
<TABLE>
         Long-term debt at March 31, 1999 and 1998 consisted of the following:
<CAPTION>
                                                                                   1999                   1998
                                                                                 --------               -------
                                                                                           (in thousands)
<S>                                                                               <C>                   <C>
Notes payable to two German banks,  interest  rates ranging from 4.95% to 7.50%,
   due in  installments  through  June  2007,  secured by  accounts  receivable,
   inventory and equipment of Marker Germany and guaranteed
   by Marker International and Marker USA                                         $   3,733             $   5,518

Note payable to a U.S. bank,  interest at 8.25% due October 1999, secured by the
   inventory and accounts receivable of Marker USA and Marker Ltd.
   and guaranteed by Marker International                                                 -                 4,500

Note payable in German Marks (DM 6.4 million) to a U.S. branch of a German bank,
   HypoVerinsbank,  interest at 4.64%,  due in installments  through April 2001,
   secured by a $2,000,000 time deposit held in the
   Company's name at the bank (see Note 1)                                            3,523                 3,941

Note  payable  to  a  U.S.   bank,   interest  at  9.7%,  due  in  monthly
   installments through July 2004, secured by a building                              1,162                 1,318

Notes payable to an insurance company, paid in full during fiscal 1999.                   -                 2,184

Note payable to Royal Bank of Canada, interest at prime rate plus 1.25% (8.0% at
   March 31, 1999) due on March 31, 2000, secured by a standby
   letter of credit issued by Marker International, currently in default                166                     -

Note payable to a Japanese bank, interest at 2.13%, due in installments  through
   November 2000, secured by the assets of a former director of the Company             801                   562

Other                                                                                    31                   387
                                                                                  ----------            ---------
                                                                                      9,416                18,410
Less current maturities                                                              (5,595)               (3,512)
                                                                                  ---------             ---------
                                                                                  $   3,821             $  14,898
                                                                                  =========             =========
</TABLE>

         The following are scheduled  principal  maturities of long-term debt as
of March 31, 1999 (in thousands):
                              Year Ending March 31,             Amount
                              ---------------------            -------
                              2000                             $   5,595
                              2001                                 1,575
                              2002                                   759
                              2003                                   453
                              2004                                   448
                              Thereafter                             586
                                                               ---------
                                                               $   9,416
                                                               =========

                                      F-20
<PAGE>

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
remaining  balance.  In addition  the  Company's  note  payable to Royal Bank of
Canada is in default  as part of the  Company's  noncompliance  with the line of
credit agreement.  Accordingly,  the amounts under these notes are classified as
current maturities at March 31, 1999. There can be no assurance that the Company
will reach a satisfactory agreement with HypoVereinsbank.

         Total cash paid for  interest  during the years ended  March 31,  1999,
1998  and  1997  was  approximately  $6,358,000,   $5,492,000,  and  $5,276,000,
respectively.  Included in total cash  payments  for  interest are Series A Bond
(See Note 3) interest payments which totaled  approximately  $472,000,  $936,000
and $1,253,000 for the years ended March 31, 1999, 1998 and 1997, respectively.

NOTE 3.  SERIES A BONDS

         All of the  Company's  outstanding  Series A Bonds are held by  Isomura
Sangyo   Kaisha  Ltd.,  a  Japanese   corporation   ("Isomura   Sangyo"  or  the
"Bondholder"),  controlled by Eiichi Isomura,  a former director of the Company,
and his family.  The Series A Bonds are subject to redemption upon not less than
30 days prior notice, in whole or in part, at the option of the Company.

         The Series A Bonds  consist of the  Series  A-1,  A-2 and A-3 Bonds and
require  semiannual  interest payments on September 30, and March 31. The Series
A-1 Bonds bear interest at the effective  borrowing rate for the Bondholder (the
"Japanese  Bank Rate")  which was  approximately  4.75% and 7.97% for the fiscal
years 1999 and 1998, respectively. The Series A-2 and A-3 Bonds bear interest at
the Japanese  Bank Rate plus three  percent  which was  approximately  7.75% and
10.97% for fiscal years 1999 and 1998, respectively.


                                      F-21
<PAGE>


<TABLE>
         Pursuant to an extension agreement dated September 3, 1998, between the
Company  and the  holder of the  Series A Bonds,  payment  terms of the Series A
Bonds issued by the Company were extended as follows:
<CAPTION>

                                     Bonds Payable    Bonds Payable        Bond Payment Date          Bond Payment Date
                                     Japanese Yen      U.S. Dollars       Prior to Extension            As Extended
                                     ------------      ------------       ------------------            -----------
                                      (In 000's)        (In 000's)
<S>                                     <C>               <C>               <C>                        <C>
Series A-1 Bonds
         Certificate #5                 270,947           $ 2,280           October 1, 1998            October 1, 1999
         Certificate #6                 270,947             2,280           October 1, 1999            October 1, 2000
                                        -------             -----
Total Series A-1 Bonds                  541,894             4,560
                                        -------             -----

Series A-2 Bonds
         Certificate #3                 338,683             2,850         December 16, 1998          December 15, 1999
         Certificate #4                 338,683             2,850         December 16, 1999          December 15, 2000
                                        -------             -----
Total Series A-2 Bonds                  677,366             5,700
                                        -------             -----

Series A-3 Bonds
         Certificate #1                 135,473             1,139         December 16, 1999          December 16, 2001
                                        -------             -----
Total Series A Bonds                  1,354,733           $11,399
                                      =========           =======
</TABLE>

         The  holder  of the  Series A Bonds  elected,  under  the  terms of the
extension agreement,  to convert the bonds from United States dollar denominated
bonds to Japanese Yen denominated  bonds. The conversion of the Bonds from $10.0
million  U.S.  Dollars  to  1,354,733,330  Japanese  Yen was made  effective  on
September 30, 1998. This Yen denominated  obligation  currently remains unhedged
and any  gains or losses  resulting  from  fluctuations  in  exchange  rates are
recorded in income.  As of March 31, 1999,  the Company  recorded an  unrealized
loss of approximately $1.4 million.

         During fiscal year 1999, the Company did not make the required interest
payments of $125,000  due in October  1998 and $125,000 due in April 1999 on the
Series A Bonds. As a result,  the bondholder has the right to declare the Series
A Bonds in  default  and  accelerate  the  entire  outstanding  balance of $11.4
million plus accrued interest of $0.7 million.  As a result,  the Series A Bonds
have been  classified  as a current  liability.  On March  26,  1999,  CT Sports
entered into a restructuring  agreement with the bondholder which is contingent,
among other things, Marker entering into a definitive purchase agreement with CT
Sports (see Note 1).  There can be no  assurance  that the  bondholder  will not
declare the Series A Bonds in default and accelerate the outstanding balance.

                                      F-22
<PAGE>


NOTE 4.  SERIES B PREFERRED STOCK

         On  August  24,  1998,  Henry E.  Tauber,  former  president  and chief
executive  officer  of  Marker  and a member  of  Marker's  board of  directors,
purchased  1,000,000 shares of the Company's Series B Preferred Stock, $0.01 par
value (the "Preferred Stock"), for a purchase price of $3,000,000.

         Each share of Series B Preferred Stock is convertible, at the option of
the holder, at any time, into shares of Common Stock of the Company at a rate of
one and  one-third  shares of Common  Stock for each share of Series B Preferred
Stock.  Holders of the Series B  Preferred  Stock have the right to one vote for
each  share  of  Common  Stock  into  which  such  Series B  Preferred  Stock is
convertible.  Holders of the Series B  Preferred  Stock are  entitled to receive
annual  dividends  payable either in cash, at the rate of $0.27 per share, or by
the issuance of 9/100 of a share of Series B Preferred Stock, at the election of
the  Company.  Such  dividends  are  cumulative;  however,  accrued  and  unpaid
dividends do not bear interest.  For fiscal 1999,  accrued and unpaid  dividends
were approximately $169,000.

         At the  election of a majority of the holders of the Series B Preferred
Stock, the Company shall be required to redeem each year, beginning September 1,
2003, and on each September 1 thereafter, 25% of the total number of outstanding
shares at a price per share equal to $3.00 (subject to certain adjustments) plus
all accrued and unpaid cumulative dividends. Election of the holder to have such
stock redeemed shall be made by giving the Company  written notice not less than
45 days prior to the first redemption date and each redemption date thereafter.

         As part of he  Company's  overall  restructuring  plan,  Mr.  Tauber is
presently  negotiating  with  CT  Sports  for the  retirement  of the  Series  B
Preferred  Stock.  There can be no  assurance  that the Company  will be able to
reach a satisfactory agreement with the holder of the Series B Preferred Stock.


                                      F-23
<PAGE>


NOTE 5.  COMMITMENTS AND CONTINGENCIES

Leases

         The  Company  is  committed  under  various  long-term   non-cancelable
operating leases requiring minimum annual rentals as follows (in thousands):
                         Year Ending March 31,              Amount
                         --------------------               ------
                         2000                             $    1,602
                         2001                                  1,170
                         2002                                  1,044
                         2003                                    950
                         2004                                    839
                         Thereafter                            7,156
                                                          ----------
                                                          $   12,761
                                                          ==========

         Rent and lease expense was approximately  $2,217,000,  $2,791,000,  and
$3,176,000 for the years ended March 31, 1999, 1998 and 1997, respectively.

         During June 1997,  the Company  entered into an agreement  for the sale
and  leaseback  of the  Company's  machinery  and  equipment  of  its  snowboard
facility.  The Company had an option to purchase  such  facility for $790,000 at
expiration  of the lease.  The lease was  classified as an operating  lease.  On
January 14, 1999, the leased snowboard  manufacturing  equipment was disposed of
through  an  auction  and the  net  proceeds  of the  auction  were  paid to the
equipment  lessor.  The Company has a remaining lease obligation of $1.7 million
to the lessor,  which is included in the other current  liabilities  as of March
31,  1999.  The lessor has agreed to settle and  release the Company of the $1.7
million  obligation  for a payment of $30,000  (which was made on June 30, 1999)
and an additional payment of $140,000 on or before October 1, 1999. In the event
these  payment  are not made,  the  Company  remains  liable for the entire $1.7
million  obligation.  There can be no assurance that the Company will be able to
satisfy  its  obligation  to pay the  remaining  $140,000 to Zions by October 1,
1999.

Discounted Notes Receivable

         Marker  Japan  was  contingently  liable  for  discounted  trade  notes
receivable on a full  recourse  basis of  approximately  $2,863,000 at March 31,
1999. These notes receivable mature in various amounts through July 1999.


                                      F-24
<PAGE>

Royalty Agreement

         On April 1, 1999,  Marker Ltd. renewed its agreement with the Salt Lake
Organizing  Committee  for the 2002  Olympic  Winter Games as a licensee for the
sale of apparel with the imprint of the 2002 Olympic  Winter Games.  On March 8,
1999, Marker Ltd. completed a licensing agreement SSRC. Effective April 1, 1999,
SSRC acquired the license rights for both winter and summer apparel for the 2002
Olympic Winter Games to be held in Salt Lake City.

Legal Matters

         On March 22,  1999,  Pierro G.  Ruffinengo  filed a breach of  contract
lawsuit  against the Company and certain of its  officers  and  directors in the
Third  Judicial  District  Court in Salt Lake City,  Utah.  The  plaintiff,  who
provided  legal and  consulting  services to the Company  from 1982 to 1998,  is
claiming  monetary  damages and also  claiming an ownership  interest in several
patents.  The Company is currently involved in settlement  negotiations with Mr.
Ruffinengo. Based on a review of the current facts and circumstances, management
has provided for what is believed to be a reasonable estimate of the exposure to
loss  associated  with this matter.  There can be no assurance  that the Company
will reach a satisfactory settlement with the plaintiff.

         On May 11, 1999, Marker was served with a subpoena to provide documents
and  records to a Grand  Jury in the  United  States  District  Court,  Northern
Division for District of Utah. The subpoena requests documents and records to be
produced  regarding  certain  individuals  with  respect  to The Salt  Lake City
Olympic  Organizing  Committee,  Salt Lake City  Olympic Bid  Committee  and the
International Olympic Committee.  The Company believes that it has submitted all
the  required  documentation.  Although  to date the  Company  has not  received
additional  correspondence  from either The Salt Lake City Olympic  Organization
Committee,  the Salt Lake City Olympic Bid Committee,  the International Olympic
Committee or the Grand Jury  regarding  this  matter,  there can be no assurance
that these matters will not be pursued further.

         In September 1995, the Company,  along with other significant companies
in its  business,  received a letter from the  Department of Justice (the "DOJ")
explaining  that the  pricing  practices  of the  various  companies  in the ski
industry  were being  reviewed.  Although to date the  Company has not  received
additional  correspondence  from the DOJ, there can be no assurance that the DOJ
will not pursue these matters further.

         In the  opinion of the  Company,  neither  the  Company  nor any of its
subsidiaries  is currently a party to or subject to any other  material  pending
legal  proceedings.  However,  the  Company is not in  compliance  with  certain
financial  covenants and in default under its  obligations to certain  creditors
(see Notes 2,3, and 9). Any legal proceeding  resulting from such defaults would

                                      F-25
<PAGE>

have a  material  adverse  effect  on the  Company's  ability  to  continue  its
operations.

         The nature of the sport of skiing entails inherent risks of injury.  It
is  expected  that the  Company  from time to time will be subject to claims and
lawsuits  as a result of the nature of its  businesses.  The  Company  maintains
insurance that it believes  meets  industry  standards to protect itself against
product  liability claims.  The adequacy of the insurance  coverage and reserves
established  by the Company to cover  known,  as well as incurred  but  unknown,
product liability claims are evaluated at the end of each fiscal year. There can
be no  assurance,  however,  that such  coverages or reserves will be sufficient
protection against any future legal proceedings (including any related payments,
settlements or costs).

NOTE 6.  INCOME TAXES

         The  Company's  subsidiaries  file  tax  returns  in  their  applicable
jurisdictions. U.S. income tax is not provided on unrepatriated foreign earnings
because  management  considers such amounts to be permanently  invested  abroad.
Management has deemed it  impracticable  to determine the amount of unrecognized
deferred tax liability on earnings  which are  considered  permanently  invested
abroad.

         The  Company's  provision  or  (benefit)  for  income  taxes  has  been
allocated  between  continuing  operations and  discontinued  operations for the
years ended March 31, 1999, 1998 and 1997 as follows (in thousands):

                                      1999              1998              1997
                                  ----------        ----------          -------
        Continuing Operations     $   1,458          $  1,158           $  700
        Discontinued Operations        (134)             (636)             956
                                  ----------        ----------          --------
                                  $   1,324          $    522           $1,656
                                  ==========        ==========          ========

         The portion of the provision or (benefit) for income taxes allocable to
discontinued  operations  has  been  netted  against  the  income  or loss  from
discontinued operations in the financial statements.

         The domestic and foreign  components of income  (loss) from  continuing
operations before provision for income taxes for the years ended March 31, 1999,
1998 and 1997 were as follows (in thousands):

                                        1999             1998           1997
                                     ---------        ---------      --------
                   Domestic          $(10,497)        $ (2,865)       $(1,711)
                   Foreign            (10,555)          (1,110)         4,092
                                    ----------       -----------      ---------
                                     $(21,052)        $ (3,975)       $ 2,381
                                    =========        ==========       =======


                                      F-26
<PAGE>



         The  Company's  (benefit)  provision for income taxes related to income
(loss) from  continuing  operations for the years ended March 31, 1999, 1998 and
1997 consisted of the following (in thousands):

                                        1999         1998          1997
                                     ---------    ---------     -------
                   Current:
                      Federal        $      -     $      -      $      15
                      State                  4            4            30
                      Foreign              108          261           989
                                     ---------    ---------     ---------
                                           112          265         1,034
                   Deferred              1,346          893          (334)
                                     ---------    ---------     ---------
                                     $   1,458    $   1,158     $     700
                                     =========    =========     =========

         For the year  ended  March 31,  1997,  the  federal  and state  current
provision  for income  taxes is  presented  net of the  benefits  realized  from
operating loss carryforwards which totaled approximately $166,000.

         The  (benefit)  provision  for income taxes as a  percentage  of income
(loss) from  continuing  operations  before  provision for income taxes differed
from the statutory federal rate due to the following:
<TABLE>
<CAPTION>
                                                                   1999           1998            1997
                                                                ---------      ---------       -------
<S>                                                               <C>            <C>              <C>
    Statutory federal income tax rate                             (34.0%)        (34.0%)          34.0%
    State income taxes net of federal income taxes                   -             0.1             0.9
    Change in deferred tax asset valuation allowance               38.7           56.6          (13.7)
    Foreign earnings taxed at different rates                        -             4.7             8.2
    Other                                                           2.2            1.7              -
                                                                   ----            ----        ---------
                                                                    6.9%           29.1%           29.4%
                                                                =========       =========      =========
</TABLE>


                                      F-27
<PAGE>



         The components of the net deferred tax assets and  liabilities at March
31, 1999 and 1998 were as follows (in thousands):
<TABLE>
<CAPTION>

                                                                                  1999            1998
                                                                                -------         --------
<S>                                                                             <C>             <C>
              Deferred tax assets:
                 Intercompany profit                                            $   735         $ 1,028
                 Domestic net operating loss carryforwards                       15,245             852
                 Unrealized foreign exchange loss                                 1,214               -
                 Foreign net operating loss carryforwards                         4,398             673
                 Allowance for doubtful accounts                                    662             278
                 Accrued expense reserves                                         1,516             795
                 Foreign tax credits and tax attribute carryforwards                296             435
                 Other                                                              286             274
                                                                                -------         --------
                    Total deferred tax assets                                    24,352           4,335
              Valuation allowance                                               (24,233)         (3,085)
                                                                                -------         --------
                                                                                    119           1,250
                                                                                -------         -------
              Deferred tax liabilities:
                 Equity investment                                                    -            (139)
                 Other                                                             (119)           (154)
                                                                                --------        --------
                    Total deferred tax liabilities                                 (119)           (293)
                                                                                --------        --------
                    Net deferred tax assets                                     $     -         $   957
                                                                                =======         ========
</TABLE>

         The  recognition  of  deferred  tax  assets  is  based  upon  judgments
regarding the potential  realization  of such assets in the future.  As of March
31, 1999,  management  believes that none of the net deferred tax assets will be
realized, and therefore, the valuation allowance has been increased accordingly.

         As of March 31, 1999,  the Company has domestic tax net operating  loss
carryforwards of  approximately  $41.0 million which begin to expire in 2006 and
foreign tax net operating  loss  carryforwards  of  approximately  $10.0 million
which begin to expire in 2003.  Additionally,  as of March 31, 1999, the Company
has  domestic  foreign  tax  credits,   general  business  credits,   charitable
contribution  carryforward  and  alternative  minimum tax  credits of  $164,000,
$32,000, $82,000 and $72,000, respectively.

         Cash paid for income taxes in the years ended March 31, 1999,  1998 and
1997 was approximately $70,000, $1,569,000 and $1,216,000, respectively.


                                      F-28
<PAGE>

NOTE 7.  COMMON STOCK TRANSACTIONS

Stock Offering

         On July 23, 1996, the Company closed its secondary  public  offering of
the  Company's  common  stock.  In  connection  therewith,  the  Company  issued
2,680,000 shares of common stock. The Company received aggregate net proceeds of
approximately  $14.8 million.  The Company  utilized such net proceeds to partly
finance the purchase of additional shares of DNR Sportsystem.

Warrants

         In connection  with the Company's  initial public  offering held during
fiscal  1995,  the  Company  issued to the  representative  of the  underwriters
nontransferable  warrants  to  purchase  231,500  shares  of the  common  stock,
exercisable for a period of four years  commencing in August 1995 at an exercise
price  of  $8.75.  Accordingly,   at  March  31,  1999,  173,625  warrants  were
exercisable.   The  warrants  provide  for  registration  rights,  anti-dilution
protection and other  customary  terms.  No warrants were  exercised  during the
fiscal year ended March 31, 1999.

Stock Option Plan

         During  fiscal  1995,  the  Company   established  a  nonqualified  and
incentive  stock option plan (the "Stock  Option  Plan").  The Stock Option Plan
provides for the  issuance of a maximum of  2,500,000  shares of common stock to
officers, directors,  consultants and other key employees. The Stock Option Plan
allows for the grant of incentive or nonqualified options and is administered by
the Board of  Directors.  Incentive  options  are  granted  at not less than 100
percent of the fair market value of the  underlying  common stock on the date of
the grant.  The aggregate fair market value of shares which may be purchased for
the first time during any calendar  year  pursuant to an incentive  stock option
grant may not exceed $100,000 per individual. Nonqualified stock options will be
granted at a price as  determined  by the Board of  Directors.  No stock options
granted are exercisable after ten years from the date of grant.

                                      F-29
<PAGE>




         For the years ended March 31, 1999,  1998 and 1997, the Company had the
following stock option activity:

                                                                    Weighted
                                                                      Avg.
          Year Ended March 31, 1999          Amount              Exercise Price
          -------------------------          ------              --------------
          Options Granted                    930,000                   $.50
          Options Exercised                      -                       -
          Options Expired/Forfeited         (243,000)                  4.56
          Options Repriced                   631,800                    .56
          Options Outstanding              1,531,800                    .53
          Options Exercisable                519,297                    .56

          Year Ended March 31, 1998
          Options Granted                     22,500                 $ 4.08
          Options Exercised                   (1,450)                  4.13
          Options Expired/Forfeited          (53,750)                  4.46
          Options Outstanding                844,800                   4.86
          Options Exercisable                476,172                   4.63

          Year Ended March 31, 1997
          Options Granted                    236,000                 $ 5.42
          Options Exercised                   (1,250)                  7.13
          Options Expired/Forfeited          (44,250)                  6.83
          Options Canceled                  (169,000)                  5.75
          Options Outstanding                877,500                   4.85
          Options Exercisable                277,750                   6.96

         On April 15, 1997, the Board of Directors amended the exercise price of
468,500  options  originally  granted on November 1, 1994 at an option  price of
$7.13 per share to $4.13 per  share,  which  was the  closing  price for  Marker
common  stock on April  15,  1997.  Effective  November  1,  1998,  the Board of
Directors  amended the exercise  price of 631,800  options  from their  original
grant  exercise  of between  $6.00 to $2.50 to $.5625  per share,  which was the
closing price for Marker common stock on October 22, 1998.

         The Company has adopted the  disclosure-only  provisions  of  Financial
Accounting  Standards No. 123,  "Accounting  for Stock-Based  Compensation"  for


                                      F-30
<PAGE>


options  issued to  employees.  Accordingly,  no  compensation  expense has been
recognized  for the Stock Option Plan. Had  compensation  cost for the Company's
stock option awards been  determined in accordance  with the  provisions of SFAS
No. 123, the  Company's  net income (loss) and per share amounts would have been
reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
                                                           1999           1998          1997
                                                           ----           ----          ----
<S>                                                     <C>            <C>             <C>
  Net (Loss) Income - As Reported (in thousands)        $ (48,018)     $ (17,329)      $ 4,602
  Net (Loss) Income - Pro Forma (in thousands)          $ (48,188)     $ (18,495)      $ 4,190

  Net (Loss) Income per Share - As Reported             $   (4.33)     $   (1.56)      $  0.45
  Net (Loss) Income per Share - Pro Forma               $   (4.34)     $   (1.66)      $  0.41
</TABLE>

         The  following  information  applies  to the  options  outstanding  and
exercisable at March 31, 1999:  631,800 of the 1,531,800 options  outstanding at
March 31, 1999 have exercise prices of $.5625,  and a weighted average remaining
contractual  life of 8.1 years of which  approximately  519,297 of these options
are exercisable,  and the remaining 900,000 options have exercise prices of $.50
and a weighted average remaining  contractual life of 9.6 years of which none of
these options are exercisable; their weighted average exercise price is $.50.

         Because the Statement 123 method of accounting  has not been applied to
options  granted prior to April 1, 1995,  the  resulting pro forma  compensation
cost may not be  representative  of that to be  expected  in future  years.  The
weighted  average fair value of options granted under the Company's stock option
plans during fiscal years ended March 31, 1999, 1998, and 1997 were estimated at
$0.50,  $2.44  and  $4.27,  respectively,   on  the  date  of  grant  using  the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions  for grants in fiscal 1999,  1998 and 1997,  respectively:  dividend
yield of 0%, expected volatility of 100.0%,  77.4% and 78.0%  respectively,  and
expected  lives of 6 years  for all  grants;  and a risk  free rate of return of
6.6%,  6.7% and 6.3%,  and an assumed  forfeiture  rate of 1.5%,  1.2% and 2.3%,
respectively.  The  estimated  fair value of  options  granted is subject to the
assumptions made and if the assumptions were to change, the estimated fair value
amounts could be significantly different. The weighted average fair value of the
options exercised during fiscal 1999, 1998 and 1997 was $2.42 for all years.

NOTE 8.  INVESTMENT IN DNR SPORTSYSTEM

         On June 30, 1995, the Company  acquired 25% of the common shares of DNR
Sportsystem,  a Swiss  Corporation,  for approximately  $5.4 million in cash. On
June 26, 1996,  the Company  acquired an additional  55% of the common shares of

                                      F-31
<PAGE>

DNR  Sportsystem  for  approximately  $19.8 million.  In connection with the 55%
purchase,  the Company  acquired  the  following:  assets at fair value of $24.1
million  (including  cash of  $5.3  million)  and  assumed  liabilities  of $4.2
million. This acquisition has been accounted for using the purchase method. As a
result of the acquisition, Marker's total ownership of DNR Sportsystem increased
to 80%.  Prior to its 80%  ownership,  the  Company  accounted  for its then 25%
investment in DNR Sportsystem using the equity method of accounting.

         Prior to March 31, 1997, DNR  Sportsystem  had a calendar year end, and
as a foreign entity did not have the same reporting requirements as the Company.
Consistent  with  prior  reporting  periods,  the  Company  used a 90-day lag in
reporting DNR Sportsystem's  financial  information.  As such, DNR Sportsystem's
operating results for its year ended December 31, 1996 were included in Marker's
fiscal year ended March 31, 1997. On March 31, 1997, Marker elected to eliminate
the  90-day  reporting  lag and,  as such,  recorded  a one time  adjustment  to
retained earnings relating to DNR Sportsystem's operating results for the period
January 1, 1997 to March 31, 1997,  effectively making DNR Sportsystem's current
reporting  period  the same as that of the  Company  and its other  consolidated
subsidiaries.  For the period  January 1, 1997 through March 31, 1997,  Marker's
adjustment to retained earnings was $2.45 million,  which represented 80% of DNR
Sportsystem net loss for that same period. DNR Sportsystem had net sales of $1.3
million for the period January 1, 1997 through March 31, 1997.

         For  the  period  January  1,  1996  through  December  31,  1996,  DNR
Sportsystem  reported  net  sales of $49.7  million,  operating  income  of $6.7
million and net income of $6.4 million.  However,  the Company's  actual benefit
from the 1996 DNR Sportsystem  operating results was reduced by its proportional
share of non-ownership (minority interest) which varied throughout the reporting
period,  amortization expense resulting from goodwill created by the purchase of
DNR  Sportsystem  and  significant  interest  expense  incurred  by the  Company
relating to the purchase.

NOTE 9.  DERIVATIVE FINANCIAL INSTRUMENTS

         Derivative financial instruments held by the Company are generally used
to manage  well-defined  foreign exchange and interest rate risks which occur in
the normal  course of  business.  From time to time the Company has entered into
derivatives that require speculative accounting treatment.

Foreign Exchange Contracts

         The Company and its subsidiaries have numerous intercompany receivables
and payables  and  commitments  denominated  in foreign  currencies  that create
exposure to  fluctuations in foreign  currency  rates.  The Company entered into


                                      F-32
<PAGE>

forward foreign exchange contracts to reduce the potential impact of unfavorable
fluctuations in foreign  exchange rates.  The Company has commitments to buy and
sell foreign currencies relating to foreign exchange contracts in order to hedge
against future currency fluctuations.

         The Company holds forward  exchange  contracts to purchase German Marks
with  Japanese  Yen and U.S.  Dollars.  The  contracts  mature at various  dates
through April 2000. The outstanding forward exchange purchase and sale contracts
at March 31, 1999, are as follows:
<TABLE>
<CAPTION>
               Selling                 Buying              Contracted
                Amount                 Amount            Forward Rate        Unrealized Loss         Maturity
            --------------         --------------        -------------       ---------------         --------
<S>             <C>                       <C>          <C>                    <C>                <C>
           Yen  1,833,190,000      DM     27,000,000   64.080 - 71.000        $  (576,492)        4/15/99-4/20/00
           $       37,809,651      DM     62,229,000   1.4969 - 1.7455        $(3,341,162)       4/19/99-12/29/99
</TABLE>

         The U.S.  Dollar amount of the Yen  contracts  based upon the March 31,
1999 spot rate was approximately  $15.4 million.  Due to the Company's financial
position,  the Company determined that it would be unable to utilize the foreign
exchange contracts as originally intended.  Accordingly, all contracts have been
accounted  for  as  speculative  and  marked  to  market.  This  resulted  in an
unrealized  loss of $3.9 million as of March 31, 1999. In addition,  the Company
realized a net gain of  approximately  $3.9, $0.8 million,  and $1.0 million for
fiscal years 1999, 1998 and 1997,  respectively,  related to sold contracts that
were not accounted for as hedges.

         Subsequent to March 31, 1999 the Company notified M&T Bank and KeyBank,
banks with which the Company had certain foreign exchange arrangements, that the
Company would be unable to utilize its foreign exchange  contracts as originally
intended.  As a result, on May 25, 1999 M&T Bank terminated the foreign exchange
netting agreement (the "Netting  Agreement") dated May 1, 1997 with the Company.
Pursuant to its rights under the Netting Agreement, M&T Bank canceled and closed
out all outstanding  foreign exchange contracts for a loss of $3.7 million as of
May 21, 1999 and demanded immediate payment of this amount. Although the Company
is currently negotiating with M&T Bank to restructure this obligation, there can
be no assurance  that the Company will reach a  satisfactory  agreement with M&T
Bank. In the event that an agreement is not reached, M&T could proceed to obtain
a  judgment  against  the  Company  and force the  Company  into an  involuntary
bankruptcy.  As of  June  30,  1999,  the  aggregate  loss on  foreign  exchange
contracts with M&T Bank and KeyBank totaled approximately $5.1 million. The loss
on the KeyBank  contracts  will  continue to fluctuate as a result of changes in
the exchange rates.


                                      F-33
<PAGE>

Interest Rate Cap Agreement

         The Company has entered into an interest  rate cap  agreement to reduce
the impact of changes in interest  rates on its variable rate  revolving  credit
agreement (See Note 2). The differential to be paid or received on the agreement
is  recognized  over the term of the agreement as either an increase or decrease
of interest  expense.  The interest rate cap agreement expires July 31, 1999 and
at March 31, 1999, the estimated fair value was zero.


NOTE 10.  RELATED PARTY TRANSACTIONS

         During  fiscal years 1999,  1998 and 1997,  Marker Japan  purchased ski
bindings and services  totaling  approximately  $66,000,  $92,000,  and $93,000,
respectively,  from Isomura Seisakusho KK ("Isomura  Seisakusho"),  a company of
which Eiichi Isomura,  a shareholder and former director of the Company,  is the
president, director and owner of more than ten percent of the outstanding stock.
At March 31,  1999,  1998 and 1997,  the net  account  receivable  from  Isomura
Seisakusho  was  approximately  $0.0  million,  $0.4  million and $0.4  million,
respectively.

         At March 31, 1999, the Company had outstanding  credit  arrangements in
an aggregate amount equal to approximately U.S. $2.4 million payable to Japanese
banks. Of these amounts, approximately $1.5 million was secured by assets of Mr.
Isomura.

         Marker  Japan  leases  office  space  in  Tokyo,   Japan  and  receives
distribution  services from Isomura Sangyo, a company of which Eiichi Isomura, a
shareholder and former director of the Company,  is the president,  director and
owner  of  more  than  ten  percent  of the  outstanding  stock.  In  connection
therewith,  for the fiscal years 1999, 1998 and 1997, Marker Japan made payments
to  Isomura  Sangyo  totaling  approximately  $239,000,  $280,000  and  $287,000
respectively.

         The Company purchased  insurance  through an insurance broker,  Acordia
Northwest Inc., of which Graham S. Anderson,  a director of the Company, is also
a director. The Company incurred approximately $684,000,  $745,000, and $851,000
of premiums for such insurance during fiscal 1999, 1998 and 1997, respectively.

         DNR  Sportsystem  purchased  snowboards from an affiliated  entity,  of
which  Gregor  Furrer &  Partner  Holding  AG,  a  minority  shareholder  of DNR
Sportsystem,  is a partner.  Snowboards purchased from the related party totaled
approximately $0.9 and $5.9 million during 1999 and 1998, respectively.

         On  August  24,  1998,  Henry E.  Tauber,  former  president  and chief
executive  officer  of  Marker  and a member  of  Marker's  board of  directors,


                                      F-34
<PAGE>

purchased  1,000,000 shares of the Company's Series B Preferred Stock, $0.01 par
value (the  "Preferred  Stock"),  for a purchase  price of  $3,000,000.  Allen &
Company Incorporated gave an oral report,  concluding that the terms of the sale
of the Preferred  Stock were fair and  reasonable,  and no less favorable to the
Company than those that could be obtained from an unrelated third party making a
similar investment in the Company.

NOTE 11.  BENEFIT PLAN

         The Company  sponsors a qualified  retirement plan under Section 401(k)
of the Internal Revenue Code which covers  substantially  all eligible  domestic
employees.  Under the terms of the plan, each  participant may elect to defer up
to the annual statutory limit of eligible  compensation.  The Company matches 50
percent of each participant's  contribution up to 4 percent of the participant's
eligible  compensation.  During the years ended March 31,  1999,  1998 and 1997,
employer  contributions  totaled  approximately  $51,000,  $56,000 and  $47,000,
respectively.

NOTE 12.  SEGMENT REPORTING

         The Company's  reportable  segments are strategic  business  units that
offer different products and services. The information for fiscal years 1998 and
1997 have been restated from the prior year's segment  presentation  in order to
conform to the fiscal year 1999 presentation.

         The  accounting  policies of the  reportable  segments  are the same as
those  described in Note 1.  Summarized  financial  information  concerning  the
Company's reportable segments is shown in the following tables.

         While the major portion of the Company's operations is derived from the
ski bindings and other  hardgoods  segment,  the Company also has a clothing and
other  softgoods  segment.  Substantially  all of the Company's ski bindings are
manufactured by Marker Germany,  which also distributes  bindings in Germany, to
subsidiaries of the Company, and to independent  distributors in countries where
the Company does not have a distribution subsidiary.


                                      F-35
<PAGE>

         Information  concerning continuing operations by industry segment as of
and for each of the three years ended March 31, is as follows (in thousands):
<TABLE>
<CAPTION>

                                                                       Years Ended March 31,

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

                                                              1999              1998              1997
                                                              ----              ----              ----
                                                                           (In Thousands)

<S>                                                         <C>              <C>               <C>
Revenues from Unrelated Entities:
   Bindings and Other Hard Goods                            $ 60,416         $   69,788        $   75,048
   Clothing and Other Soft Goods                              13,751             11,613             8,028
-------------------------------------------------------------------------------------------------------------
                                                            $ 74,167         $   81,401        $   83,076
-------------------------------------------------------------------------------------------------------------
Operating Income (Loss):
   Bindings and Other Hard Goods                            $ (9,523)        $    1,235        $    5,257
   Clothing and Other Soft Goods                              (1,832)               348               447
   Unallocated Corporate                                      (4,568)               155            (1,028)
-------------------------------------------------------------------------------------------------------------
                                                            $(15,923)        $    1,738        $    4,676
-------------------------------------------------------------------------------------------------------------
Depreciation and Amortization:
   Bindings and Other Hard Goods                            $  4,201         $    3,152        $    2,702
   Clothing and Other Soft Goods                                 213                106               134
   Unallocated Corporate                                         345                305               355
   Discontinued Operations                                       392              1,637             1,195
-------------------------------------------------------------------------------------------------------------
                                                            $  5,151         $    5,200        $    4,386
-------------------------------------------------------------------------------------------------------------
Interest Expense:
   Bindings and Other Hard Goods                            $  5,250         $    3,855        $    3,427
   Clothing and Other Soft Goods                                   4                  1                -
   Unallocated Corporate                                       1,383              1,898             1,682
-------------------------------------------------------------------------------------------------------------
                                                            $  6,637         $    5,754        $    5,109
------------------------------------------------------------------------------------------------------------
Capital Expenditures:
   Bindings and Other Hard Goods                            $   3,205        $    6,213        $    3,884
   Clothing and Other Soft Goods                                   74               104               156
   Unallocated Corporate                                           16               138             2,685
   Discontinued Operations                                        340               683             3,544
-------------------------------------------------------------------------------------------------------------
                                                            $   3,635        $    7,138        $   10,269
-------------------------------------------------------------------------------------------------------------
Total Assets:
   Bindings and Other Hard Goods                            $  49,133        $   66,038        $   62,262
   Clothing and Other Soft Goods                                2,631             7,136             5,602
   Unallocated Corporate                                        7,030             7,745            12,770
   Discontinued Operations                                        179            24,201            36,506
-------------------------------------------------------------------------------------------------------------
                                                            $  58,973        $  105,120        $  117,140
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-36
<PAGE>

Geographical Segment Information:

         Financial   information   relating  to  the  Company's   operations  by
geographic area was as follows:
<TABLE>
<CAPTION>
                                                                       Years Ended March 31,
                                                        -----------------------------------------------------

                                                              1999              1998                1997
                                                              ----              ----                ----
                                                                           (In Thousands)

<S>                                                         <C>              <C>               <C>
Revenues from Unrelated Entities:
   United States of America                                 $  31,910        $   39,768        $   37,135
   Germany                                                     11,529            10,996            12,651
   Japan                                                        8,852            11,150            12,991
   All Other Countries                                         21,876            19,487            20,299
-------------------------------------------------------------------------------------------------------------
                                                            $  74,167        $   81,401        $   83,076
-------------------------------------------------------------------------------------------------------------
Long-Lived Assets:
   United States of America                                 $   3,472        $    8,075        $    8,834
   Germany                                                      7,540             8,741             6,759
   Japan                                                          454               717             1,161
   All Other Countries                                            425               543                 5
   Discontinued Operations                                         -              9,430            22,110
-------------------------------------------------------------------------------------------------------------
                                                            $  11,891        $   27,506        $   38,869
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-37