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, 1997
                                       OR
   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the transition period from _______ to _______

                         Commission File Number: 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 2, 1997  (based  upon the  average of closing bid and ask
prices as of such date) was $28,499,211.

      The number of shares of Common  Stock  outstanding  as of June 2, 1997 was
11,129,127.

                   Documents incorporated by reference: None.


<PAGE>





                                      



                                    FORM 10-K
                              MARKER INTERNATIONAL
                                TABLE OF CONTENTS

                                       PART I
                                                                            Page

ITEM 1       Business                                                         3

ITEM 2       Properties                                                      11

ITEM 3       Legal Proceedings                                               12

ITEM 4       Submission of Matters to a Vote of Security Holders             13

                                     PART II

ITEM 5       Market for the Registrant's Common Equity
                       and Related Stockholder Matters                       14

ITEM 6       Selected Consolidated Financial Data                            15

ITEM 7       Management's Discussion and Analysis of Consolidated
                       Financial Condition and Results of Operations         16

ITEM 8       Consolidated Financial Statements and
                       Supplementary Data                                    22

ITEM 9       Changes in and Disagreements with Accountants
                       on Accounting and Financial Disclosure                22

                                      PART III

ITEM 10      Directors and Executive Officers of the Registrant              23

ITEM 11      Executive Compensation                                          25

ITEM 12      Security Ownership of Certain Beneficial
                       Owners and Management                                 27

ITEM 13      Certain Relationships and Related Transactions                  28

                                     PART IV

ITEM 14      Exhibits, Consolidated Financial Statement
                       Schedules and Reports on Form 8-K                     31

SIGNATURES                                                                   38



<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.  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:  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

General

      Marker  International  ("Marker" or the "Company") is a leading  designer,
developer, manufacturer and marketer of alpine ski bindings in the United States
and throughout the world.  Marker had total annual sales equal to $126.4 million
in fiscal 1997,  compared to $16.0  million in 1984,  when Henry E. Tauber,  the
Company's  Chairman of the Board and  President,  acquired the  Company.  Marker
International  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").   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.  The principal markets for the Company's  products are
North America, Europe and Asia.

      In addition, Marker International,  through its 80% owned subsidiary,  DNR
Sportsystem Ltd. ("DNR"),  and its newly created and wholly-owned  subsidiaries,
DNR USA, Inc.("DNR USA"), DNR North America,  Inc. ("DNR North America") and DNR
Japan Co., Ltd. ("DNR Japan"),  is a leading designer,  developer,  manufacturer
and marketer of snowboards,  Interface Step-in SYSTEMSTM,  traditional snowboard
bindings  and  snowboard  boots.  DNR  Sportsystem  Ltd.  designs,  develops and
distributes  snowboards  and  related  products  throughout  the world.  DNR USA
manufactures  snowboards for  distribution  worldwide under the Santa CruzTM and
DNRTM brand  names.  DNR North  America and DNR Japan,  through  their own sales
force market  snowboards,  Interface Step-in  SystemsTM,  snowboard bindings and
boots directly to retailers in the United States and Japan, respectively.

      In June of 1995,  the  Company  acquired a 25% equity  interest in DNR. In
June of 1996,  the Company  acquired an  additional  55% of the common shares of
DNR,  bringing its total  ownership in DNR to 80%. The Company's 80% interest in
DNR is held by the Company's wholly-owned subsidiary, Marker AG.

      In July of 1996,  the Company  closed a secondary  public  offering of the
Company's  Common Stock. In connection  therewith,  the Company issued 2,680,000
shares of Common Stock,  including  180,000 shares issued in connection with the
closing  of  the  underwriters   over-allotment  option.  The  Company  received
aggregate  net proceeds of  approximately  $14.8  million and utilized  such net
proceeds to partly finance the purchase of the additional shares of DNR.

      During fiscal 1997, the Company formed DNR USA, to manufacture  snowboards
at a state-of-the-art  snowboard production facility in Salt Lake City, Utah. In

                                       3
<PAGE>

addition,  the Company formed DNR North America and DNR Japan,  as  distribution
companies for  snowboards  and related  products in the United States and Japan,
respectively.

      In January  of 1997,  the  Company  completed  construction  of its 56,608
square foot snowboard manufacturing facility located in Salt Lake City, Utah.

Products

      Ski Bindings

      The Company designs,  develops,  manufactures and distributes ski bindings
consisting  of more than 30 high  quality  models.  The  models  range from high
performance  racing  models,  such as the Logic 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
$115 to $395.  Each model is  available  in a variety of colors  selected by the
Company based on an analysis of consumer preferences.

      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.

      Marker bindings feature LogicTM,  TwincamTM, and Gliding AFDTM technology.
The Company  developed  the  patented  LogicTM,  TwincamTM,  and  Gliding  AFDTM
technology,  which together  tightly couple the ski boot and binding  toe-piece,
resulting  in  a  binding  system  that  is  designed  not  to  be  affected  by
contamination  between the ski boot and binding. In addition,  certain models of
Marker bindings also feature either the Company's  BiometricTM,  Full SpectrumTM
or V-TECHTM  technology.  These  technologies  allow the ski boot to be released
from a binding at any angle in a 180 degree spectrum,  thereby  increasing skier
safety.

      Snowboard, Interface, Bindings and Boots

      The Company designs,  develops,  manufacturers and distributes  snowboards
and offers  more than 40 models  designed  for novice to  world-class  snowboard
riders. The Company's line of snowboards  accommodates the needs of a full range
of  snowboarding   styles,   including  racers,   freeriders,   freestylers  and
freecarvers.  The  snowboards  range in suggested  retail  price,  in the United
States, from approximately $230 to $500.

      The Company seeks to apply  innovative  technologies to the manufacture of
snowboards.  Innovations introduced by the Company include the SplitTM snowboard

                                       4
<PAGE>

which  features  two  independent  Lightweight  Sensor  Wood Cores with  Isocore
connecting the cores. Isocore is used in the Company's top-end models to enhance
edge hold and tracking,  making it possible to easily and quickly change the arc
of a turn while on edge.  Lightweight Sensor Wood Cores are also used in top-end
models to enhance snowboard durability and performance. The use of torsion frame
and carbon torsion frame  construction by the Company  increases  snowboard edge
pressure.

      In addition to providing technologically advanced snowboards,  the Company
produces creative graphics for its snowboards. The Company believes that the use
of transparent constructions,  three-dimensional  topsheets and innovative color
schemes have helped to establish it as a leader in snowboard graphic design. One
of the Company's high performance  snowboard  models,  the H-Type Riders Choice,
which is marketed  under the Santa Cruz brand name,  has been  exhibited for its
design at the Museum of Modern Art in New York City.

      Snowboard  bindings  connect the snowboard  rider to the snowboard and can
have a significant  affect on the performance of the board. In 1996, the Company
introduced a  technologically  advanced soft boot Interface Step-in SystemTM for
snowboarders.  The Interface  Step-in  SystemTM was developed by the Company and
Tecnica(R), a leading ski and snowboard boot manufacturer.  The Company believes
that the new Interface  Step-in  SystemTM  includes  innovative  features  which
provide entry and exit convenience and incorporates a new soft boot design which
offers comfort,  mobility and more precise power  transmission and edge pressure
distribution  than was  previously  available  in the  industry.  The  Interface
Step-in  SystemTM has a suggested  retail price,  in the United States,  ranging
from $250 to $450.

      The Company offers more than 15 models of traditional  soft boot snowboard
bindings  that  incorporate  lightweight  designs and high grade  materials.  In
developing  its  traditional  snowboard  bindings,  the Company seeks to provide
durability, comfort, ease of use and performance for riders of all levels.

      The Company has  developed a wide range of snowboard  boots for  snowboard
riders of varying riding types, ages and abilities. The Company has more than 15
models that incorporate innovative  technologies,  including one-piece linerless
softboot  construction,  laceless liner,  gel-cushioned  soles and  dual-density
shock absorbing soles.

      Soft Goods

      The  Company  designs,  distributes  and  markets  apparel  for adults and
children,  gloves and ski and  non-ski  luggage.  The  Company's  clothing  line
features  quality,  functional  and versatile  performance  wear for  year-round
sports and recreational activities available at a wide range of prices.

      In  October  1995,  Marker  Ltd.  was  selected  by the Salt Lake  Olympic
Organizing  Committee for the 2002 Olympic Winter Games ("SLOC") as the licensee

                                       5
<PAGE>

for the sale in the state of Utah 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 licensee for the sale in the state of
Utah of T-shirts,  sweatshirts, golf shirts and related apparel with the imprint
and embroidery of the 2002 Olympic Winter Games.  In January 1997, both of these
contracts were extended through December 31, 1997 and the distribution territory
was expanded to include several states.

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

Marketing

      The Company  actively  advertises  and markets its  products.  The Company
spends the  majority  of its  advertising  budget on  advertisements  in ski and
snowboard magazines, such as Skiing Magazine, Ski Magazine, Snow Country, Powder
Magazine,  Snowboarder  and Transworld  Snowboarding  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
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  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  1996  World  Alpine
Downhill champion 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.

      Many Olympic, World Cup and professional ski competitions have been won by
racers  endorsing and using Marker  bindings.  Skiers endorsing and using Marker
bindings dominated the 1997 FIS World Championships held in Sestrieres, Italy in
February 1997,  winning more medals than any other company: 3 Gold, 3 Silver and

                                       6
<PAGE>

4 Bronze. The 1997 World Championship Gold medalists  endorsing and using Marker
bindings  included  Michael Von  Gruenigen  of  Switzerland  in the Alpine Giant
Slalom,  Isolde  Kostner of Italy in the Alpine  Super G and Renate  Goetschl of
Austria in the Alpine Downhill.

      Skiers  endorsing  and using Marker  bindings  also excelled in the season
long 1997 FIS World Cup  competition.  Marker skiers include  Pernilla Wiberg of
Sweden,  the 1997  Women's  Overall  World Cup  Champion  and  Slalom  World Cup
Champion,  Hilde Gerg of Germany,  the Women's 1997 Super G World Cup  Champion,
Renate  Goetschl of Austria,  the Women's 1997 Downhill World Cup Champion,  and
Michael Von  Gruenigen  of  Switzerland,  the Men's 1997 Giant  Slalom World Cup
Champion. Hans Hofer of Austria was the Men's 1997 US Pro Tour Overall Champion.
The Company  believes that winning  World Cup,  World  Championship  and Olympic
competitions  at places like St.  Anton,  Sestrieres  and Nagano  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.

      For its snowboard products, the Company markets the "Santa Cruz" and "DNR"
brands  through the  implementation  of product  advertising  programs  with its
distribution  subsidiaries  and  its  distributors.   The  Company  and  certain
distributors also sponsor teams of professional  riders as part of the Company's
marketing  and  communications  strategy.  These  riders  typically  enter  into
endorsement  contracts with DNR Sportsystem,  with a length of one to two years,
providing for a base payment to the rider, with additional  payments for placing
in a  competition.  These  riders are  involved in the  testing  phase of new or
prototype  DNR  Sportsystem  products  and often  contribute  ideas  for  future
developments.  The riders participate in International,  World-Cup, Pro Tour and
other events to promote DNR Sportsystem products.  Bertrand Denervaud, who rides
"Santa Cruz"  snowboards  and is the  five-time  overall  World Pro Tour winner,
endorses the Company's products.

Sales

      Approximately  60% of the  Company's  total  orders for a 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 Pre-Season  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 July 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  35% of the  Company's  total  orders for a fiscal  year are
obtained  through its "Reorder  Program," which includes  products ordered after

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<PAGE>

September 15th and shipped  before March 31st of each year.  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  orders  for a 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  have  historically  occurred
during the  pre-season  period.  As the snowboard  market  matures,  the Company
believes  that sales of snowboard  products will  approximate  the timing of ski
binding sales.

Product Development and Intellectual Property

      In order to  maintain  its  leadership  position  and to continue to offer
technologically advanced ski bindings, snowboards and Interface Step-in SystemTM
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 both ski and snowboard  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
substantially all of the Company's proprietary  technology used in manufacturing
Marker ski bindings and has acted in partnership  with others on the development
of the Interface  Step-in SystemTM  binding.  During fiscal years 1997, 1996 and
1995, the Company's  research and development  expenses were  approximately $3.1
million, $2.8 million, and $2.3 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 its  products.  The Company  also  regularly
receives  suggestions from ski racers and snowboard riders 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 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.

                                       8
<PAGE>

      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
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  or  snowboard  products.  The  Company  has filed  more than 25 patent
applications  over the past two years and  currently  has over 130  families  of
patents  and patent  applications  covering  its  technology  filed in  numerous
countries around the world, of which over 35 are devoted to technology currently
in use by the Company.

      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,  snowboards  and  snowboard
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  relationships  with retailers and shop personnel gives
the   Company   advantageous   shelf  space  in  certain   retail   outlets  and
recommendations from shop personnel.

      Ski bindings

      The Company's primary competitors are Salomon, Tyrolia, Rossignol and ESS.
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 1996/97 ski season.  Foreign

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<PAGE>

market  surveys  available to the Company  indicate  that its alpine ski binding
market  share for such  period was more than 40% in Germany and more than 17% in
Japan.

      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.

      Snowboards, Interface System, Bindings and Boots

      The snowboard industry has shown rapid growth over the past several years.
Growth attracts  entrepreneurs  who bring energy and creativity to the industry.
In fiscal  1997,  the  snowboard  industry  appeared to have reached its natural
growth limits, with supply exceeding demand. The excess supply has resulted in a
consolidation of snowboard brands.

      Although many small snowboard  companies remain in the market, the Company
estimates that the top 10 snowboard  companies,  including DNR, account for more
than 75% of the world market for snowboards and related products.  The Company's
primary competitors include Burton, K2 and Morrow.

Raw Materials

      The Company requires various readily available metals,  fiber glass, woods
and plastics to manufacture its ski bindings, snowboard bindings and snowboards.
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 and snowboards.

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.  Due to the seasonality of the Company's  business,  the
Company typically  experiences losses or nominal profits in its first and fourth
fiscal quarters and profits in its second and third fiscal quarters.

Working Capital

      The Company  satisfies its working  capital  needs from credit  facilities
obtained from banks as addressed in  Management's  Discussion and Analysis,  set
forth in Item 7, below.

                                       10
<PAGE>

Employees and Labor Relations

      None of the Company's  approximately 700 full-time and part-time worldwide
employees  are  unionized.  In  Germany,  where  more than 560  individuals  are
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.

Regulations

      Federal,  state and local environmental  regulations have not had, and are
not expected to have,  any material  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, 1997,  1996 and 1995 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
completed in fiscal 1995. The Company's  headquarters and distribution  facility
is  suited  to  the  Company's  business  and is  presently  being  utilized  at
approximately 65% of its productive  capacity.  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  additional  warehouse
space is adequate to meet the needs of the Company's eastern cusotmers.

      The Company 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,  which is well suited to meet the manufacturing  needs of the Company,
is presently utilized at approximately 70% of total capacity.  The lease for the
manufacturing facility expires in 2012.

      The  Company  also  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

                                       11
                                       
<PAGE>

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.

      In January 1997, the Company  completed  construction of its 56,608 square
foot snowboard  manufacturing  facility located on  approximately  five acres of
land  which  are  owned  by the  Company  and  are  adjacent  to  the  Company's
headquarters in Salt Lake City.

      DNR Sportsystem leases a 2,580 square foot property in Zurich, Switzerland
where its headquarters  are located,  as well as a 3,440 square foot property in
Baar, Switzerland, where its marketing and sales force is located. The lease for
the Zurich property expires in March of 2001. The lease for the Baar property is
a year-to-year  tenancy  requiring one year's notice, as of any December 31, for
termination.

Item 3.  Legal Proceedings

      On  September  26,  1996,  Thomas P. Sims  ("Sims")  filed an action  (the
"Action") in the Superior  Court of  California  for the County of Santa Barbara
(the  "Superior  Court")  against  the  Company  and DNR  relating  to a license
agreement dated September 8, 1991, between Sims and DNR ( the "License") for the
production and  distribution of snowboards and related products bearing the Sims
trademark  outside of the United States and Canada.  Sims  alleged,  among other
things,  that the Company and DNR were promoting products  (including DNR's soft
boot Step-in Interface SystemTM binding,  the "Interface  System") that unfairly
competed with Sims' products and that DNR had breached the License. On September
27, 1996, Sims notified DNR of his intention to terminate the License agreement,
which was scheduled to continue until July 1, 2001,  and,  pursuant to the terms
of the License, initiated arbitration proceedings against DNR by filing a demand
for arbitration (the "Arbitration").  Sims claims that termination was justified
by the alleged  breaches of the License  agreement by DNR. Sims also claims that
the Company  misappropriated  a Sims  design for a  snowboard  binding and seeks
damages based upon various  legal and factual  theories,  including  claims that
DNR's conduct damaged the value of his trademarks and that DNR distributed goods
not  authorized  by the License  agreement.  Sims has not  specified  the amount
sought as damages.

      The Company  denies Sims' claims and DNR has filed a counter claim against
Sims in which it seeks damages from Sims for wrongfully  terminating the license
agreement,  for selling his interest in his trademarks and the License agreement
to a third party in violation  of a right of first  refusal in favor of DNR that
is stated in the License agreement, and for other relief and damages.

      On November  27, 1996,  the Superior  Court  granted  Sims'  request for a
preliminary  injunction against the Company and DNR. The Superior Court's ruling
prevents DNR from  manufacturing,  shipping,  selling or distributing  snowboard
products with the Sims trademark,  pending the outcome of the  Arbitration.  The
Superior  Court,  however,  refused to grant Sims'  request that DNR be enjoined

                                       12
                                       
<PAGE>

from  producing and  marketing  the  Interface  System under the "DNR" and other
brand names.  Additionally,  the  preliminary  injunction  does not restrict the
right of DNR to produce and market  snowboards and related  products under brand
names other than Sims.

      The  preliminary  injunction is not a final judgment and factual  findings
made by the Superior  Court in the  preliminary  injunction  proceeding  are not
binding upon the arbitrator. In the Arbitration,  Sims has filed a claim against
DNR for breach of the License and DNR has filed a counterclaim  against Sims for
wrongful  termination of the License.  The  Arbitration  hearing is scheduled to
take place over a four week period  beginning  in July 1997.  Under the terms of
the License, the arbitrator's award is binding on the parties and is not subject
to appeal or  further  court  review  except  for  extraordinary  circumstances.
Although  only Sims and DNR are  parties  to the  arbitration,  the  arbitrators
decision could conclude many of the disputes that are the subject of the Action,
which has been stayed while the Arbitration is pending.

      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.  The nature of the sports of skiing and snowboarding  entail
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).

      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
further correspondence from the DOJ, there can be no assurance that the DOJ will
not pursue these matters further.


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.


                                       13
<PAGE>


                                   PART II

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

      Prior to the Company's Initial Public Offering in August 1994,  quotations
for the Company's common stock were not reported on any market, and there was no
established public trading market for the common stock. Since the Initial Public
Offering,  the  Company's  common  stock has been listed on the NASDAQ  National
Market System under the symbol "MRKR".  The following  table sets forth high and
low  prices  for the  common  stock as  quoted  on  NASDAQ  during  the  periods
indicated.

                       Quarter Ended           High        Low
                 -----------------------     --------   ---------
                 1995
                 ----
                    June 30                   $ 7.63     $ 5.88
                    September 30                9.75       6.00
                    December 31                12.25       9.75
                 1996
                 ----
                    March 31                   12.38       7.13
                    June 30                     8.88       7.00
                    September 30                9.75       5.75
                    December 31                 9.50       5.38
                  1997
                  ----
                    March 31                    5.75       4.13
                    June 30 (through June 24)   4.88       2.75
                 

      Based upon information available from the Company's registrar and transfer
agent, the Company estimates that at June 2, 1997 there were approximately 1,800
holders of record of the Company's common stock.

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 to finance operations and for the expansion of the business.

                                       14
<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,
                         ------------------------------------------------------------------
                                1997       1996       1995      1994        1993
                               ------     ------     ------    ------      -----
<S>                            <C>        <C>        <C>       <C>         <C>    
Net sales                    $126,403    $87,911    $83,962   $82,637     $84,920
Cost of sales                  80,531     52,608     48,878    49,572      55,537
                               ------     ------     ------    ------      ------
Gross profit                   45,872     35,303     35,084    33,065      29,383
                               ------     ------     ------    ------      ------
Operating expenses:
   Selling                     15,553     14,592     13,049    13,029      11,020
   General and administrative  12,840     10,559      9,314     9,316       8,480
   Research and development     3,141      2,762      2,349     2,158       1,999
   Warehouse and shipping       1,827      1,566      1,455     1,343       1,325
   Amortization of goodwill
    and intangibles               621         -          -         -           -
                               ------     ------     ------    ------      ------
     Total operating expenses  33,982     29,479     26,167    25,846      22,824
                               ------     ------     ------    ------      ------
Operating income               11,890      5,824      8,917     7,219       6,559
                               ------     ------     ------    ------      ------
Other income (expense):
   Interest expense            (5,104)    (5,193)    (4,999)   (4,316)     (5,322)
   Investment in unconsolidated
    subsidiary                   (281)     1,595         -         -           -
   Other, net                   1,274      2,072      1,584       826         490
                               ------     ------     ------    ------      ------
     Total other income 
      (expense)                (4,111)    (1,526)    (3,415)   (3,490)     (4,832)
                               ------     ------     ------    ------      ------

Income before income taxes,
 minority interest and
 cumulative effect of 
 accounting change              7,779      4,298      5,502     3,729       1,727
Provision for income taxes     (1,656)      (609)    (1,395)     (510)       (133)
Minority interest              (1,521)        -          -         -           -
                               -------    ------     ------    ------      ------
Income before cumulative
 effect of accounting change    4,602      3,689      4,107     3,219       1,594
Cumulative effect of
 accounting change, net of tax     -        (266)        -         -           -
                               ------     ------     ------    ------      ------
Net income                     $4,602     $3,423     $4,107    $3,219      $1,594
                               ======     ======     ======    ======      ======
Net income applicable to
common shares (1)              $4,602     $3,423     $3,653    $1,803         N/A
                               ======     ======     ======    ======
Net income per common 
 share (2)                    $  0.45    $  0.40    $  0.50   $  0.31         N/A
                               =======    =======    =======   =======
Weighted average common
 shares outstanding            10,285      8,595      7,368     5,785         N/A
                               ======     ======     ======    ======
</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) had a dilutive effect on net income per common share
   of $ 0.03 per share.  This resulted in net income per common share before CEC
   of $ 0.43 and after CEC of $ 0.40.


                                       15

<PAGE>



                                Consolidated Balance Sheet Data at March 31,
                           -----------------------------------------------------
                             1997       1996      1995        1994        1993
                           -------    -------   -------     -------     -------

Current assets             $78,271    $64,592   $66,856     $45,093     $42,411
Total assets               117,140     87,265    82,998      56,540      52,316
Current liabilities         57,146     51,045    44,930      36,922      34,624
Long-term debt, net of
   current maturities       16,487      5,452     6,244       3,324       2,685
Series A Bonds, net of
   current maturities       10,000     10,000    13,500          -           -
Minority Interest            1,810         -         -           -           -
Redeemable preferred stock      -          -       -         19,000       8,000
Total shareholders'
   equity (deficit)         31,697     20,768    18,324      (2,706)      7,007


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

Overview

      Marker  International is a leading designer,  developer,  manufacturer and
marketer of alpine ski bindings in the United States and  throughout  the world.
The Company is a holding company which operates through its subsidiaries, Marker
Germany,   Marker  USA,  Marker  Japan,  Marker  Austria,   and  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.  Marker USA and Marker  Japan each has its own
sales force and  marketing  departments  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. Marker Austria distributes the Company's
ski bindings  into Austria  through an  independent  sales force.  Marker Canada
distributes  the  Company's ski bindings into Canada which are then sold through
an  independent  distributor.  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.  The principal
markets for the Company's products are North America, Europe and Asia.

      In addition, Marker International,  through its 80% owned subsidiary,  DNR
Sportsystem  Ltd.,  and newly created and  wholly-owned  subsidiaries,  DNR USA,
Inc., DNR North America,  Inc. and DNR Japan, is a leading designer,  developer,
manufacturer   and  marketer  of  snowboards,   Interface   Step-in   SystemsTM,
traditional  snowboard  bindings  and  snowboard  boots.  DNR  Sportsystem  Ltd.
designs, develops and distributes snowboards and related products throughout the
world.  DNR USA  manufactures  snowboards for  distribution  worldwide under the


                                       16
<PAGE>

Santa Cruz and DNR brand names.  DNR North America and DNR Japan,  through their
own sales force,  market  snowboards,  Interface  Step-in  SystemsTM,  snowboard
bindings  and boots  directly  to  retailers  in the  United  States  and Japan,
respectively.

      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 offer for the sale of the
ski bindings to their  customers  is based upon,  among other  things,  the rate
afforded  by the  forward  foreign  exchange  contracts  and market  conditions.
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 1994 to fiscal 1995,  fiscal 1995 to fiscal  1996,  and fiscal
1996 to fiscal 1997, based upon forward foreign exchange  contracts entered into
by the Company,  the United  States dollar  ("Dollar")  increased in value 1.0%,
decreased in value 12.3%, and increased in value 2.1%, respectively, against the
Mark.  During the same periods,  based upon forward foreign  exchange  contracts
entered into by the Company,  the Japanese yen ("Yen")  appreciated  3.1%, 1.9%,
and 2.7%,  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 1994 to fiscal 1995, fiscal 1995 to fiscal 1996, and fiscal
1996 to fiscal  1997,  the  Company's  cost of sales  would  have  increased  by
approximately  $0.6 million,  decreased by $2.4  million,  and increased by $0.7
million,  respectively.  The total  deferred  loss on forward  foreign  exchange
contracts   which  were  accounted  for  as  hedges  of  firm   commitments  was
approximately $1.1 million at March 31, 1997.

      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.

      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 cumulative foreign currency translation adjustments.

                                       17
<PAGE>

      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. The
Company  ships its  products to fill those  orders,  and  records a  significant
portion of its annual sales,  during its second and third fiscal  quarters.  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 more than six  months.
These factors  result in variations in the Company's  results of operations  and
cash flows.

Results of Operations

Fiscal 1997 Compared to Fiscal 1996

      The Company's net sales for the fiscal year ended March 31, 1997 increased
to $126.4 million, compared to $87.9 million in fiscal 1996. The increase in net
sales is attributable to the  consolidation  of  approximately  $43.8 million of
DNR's net sales into the  Company's  operating  results for the year ended March
31, 1997. Net sales decreased by  approximately  $4.4 million as a result of the
weighted  average rates of exchange used to consolidate  the sales of the German
and Japanese subsidiaries from their functional currency to Dollars.

      During fiscal 1997,  Thomas Sims terminated a license agreement (the "Sims
License") between DNR and Thomas Sims. The Sims License required DNR to pay Sims
certain  royalties as a percentage  of DNR's gross sales  arising from  products
sold under the Sims brand and that the Sims  products  comprise  at least 60% of
DNR's total sales.

      Gross profit for fiscal 1997 increased to $45.9 million,  but decreased as
a percent of sales to 36.3%,  compared to $35.3 million,  or 40.2% of sales, for
fiscal 1996. The increase in gross profit is attributable  to the  consolidation
of DNR's  operating  results.  The decrease in gross  profit as a percentage  of
sales is primarily a result of lower gross margins  recognized by DNR,  compared
to the  consolidated  margin  percentage  of the Company's  other  subsidiaries.
Historically,  DNR has recognized  gross margin only on sales of its products to
distributors at the wholesale  level,  unlike the Company's other  subsidiaries,
which  recognize  gross margin from sales of their  products at the  production,
wholesale and distribution levels.

      Operating expenses increased to $34.0 million for fiscal 1997, compared to
$29.5  million for fiscal 1996.  The overall  increase in operating  expenses is
primarily  a  result  of  the  consolidation  of  DNR's  operating  expenses  of
approximately  $5.0  million  with  those  of the  Company.  Operating  expenses
decreased for both Marker Germany and Marker Japan as a result of changes in the
foreign  exchange  rates used to  consolidate  the  operating  expenses of those
entities,  from their functional  currency to Dollars.  Research and development
expenses increased as a result of increased research and development for the new


                                       18
<PAGE>

Logic 1TM series alpine ski binding and the  consolidation of DNR's research and
development expenses during fiscal 1997, compared to fiscal 1996.

      Interest expense decreased to approximately  $5.1 million for fiscal 1997,
compared to $5.2 million for fiscal 1996.  The primary  reasons for the decrease
in interest  expense are a lower  outstanding  balance of Series A Bonds,  lower
interest  rates on  various  other  borrowings  and the  effect  of the  foreign
exchange  rates used for  consolidation.  The  decrease  was offset in part by a
corresponding  increase  in  interest  expense as a result of higher  borrowings
related to the purchase of DNR.

      Other income items decreased to $1.0 million for fiscal 1997,  compared to
$3.7 million in fiscal 1996. The decrease is  attributable to recognition of the
Company's  equity  share of an  unconsolidated  subsidiary's  net income,  which
totaled  approximately $1.6 million for fiscal 1996, but which was a net loss of
$0.3 million for fiscal 1997.  In addition,  during fiscal 1997 and fiscal 1996,
the Company  purchased  and sold foreign  exchange  options and forward  foreign
exchange  contracts  which were not  accounted for as hedges and resulted in the
Company  recording  net gains of  approximately  $0.8 million and $1.0  million,
respectively.

      The provision for income taxes  increased  from $.6 million in fiscal 1996
to  approximately  $1.7 million in fiscal 1997.  The provisions for income taxes
for the fiscal  years ended March 31,  1997 and 1996 were  calculated  using the
estimated  consolidated  annual effective tax rate which considers the effective
tax rates of  domestic  and  foreign  tax  jurisdictions.  The  increase  in the
provision for income taxes is primarily a result of increased pre-tax income for
fiscal  1997  compared to 1996.  In  addition,  in fiscal  1996,  the  Company's
effective tax rate was lower as a result of recognizing deferred tax assets. The
Company  anticipates  that the  effective  tax rate  realized in the future will
increase, as a result of prior recognition of deferred tax assets.

Fiscal 1996 Compared to Fiscal 1995

      The Company's net sales  increased  4.6% in fiscal 1996 to $87.9  million,
compared  to $84.0  million  in  fiscal  1995.  The  increase  in net  sales was
primarily  a result of an  increase  in market  share in Germany  and the United
States,  and an increase in the sales price of the  Company's  products in those
markets.  As a result of large  amounts of inventory on hand at the retail level
in the Japanese  market,  sales decreased at Marker Japan.  In addition,  Marker
Ltd., the Company's soft goods  subsidiary,  increased sales during fiscal 1996,
compared to fiscal 1995.  During fiscal 1996, Marker Ltd. obtained an exclusive,
one-year license to market, in Utah,  apparel with the imprint and embroidery of
the Salt Lake City 2002  Olympic  Winter  Games  logo.  Sales of Olympic  items,
combined with an extended product line, served to increase sales of Marker Ltd.

      Gross profit for fiscal 1996 increased to $35.3 million,  but decreased as
a percent of sales to 40.2%,  compared to $35.1 million,  or 41.8% of sales, for


                                       19
<PAGE>

fiscal 1995. The reduction in gross profit  percentage was primarily a result of
the rate of forward foreign  exchange  contracts used to convert Dollars and Yen
to Marks which  resulted  in an increase in cost of goods sold of  approximately
$2.4 million for fiscal 1996, compared to fiscal 1995.

      Operating expenses increased to $29.5 million for fiscal 1996, compared to
$26.2  million  for fiscal  1995.  Approximately  $1.3  million of the  increase
resulted  from  fluctuations  in the  foreign  currency  exchange  rates used to
translate operating expenses to Dollars in fiscal 1996, compared to fiscal 1995.
In  addition,  research  and  development  expenses  increased  as a  result  of
increased  research and development  for alpine bindings and snowboard  bindings
during fiscal 1996.  Moreover,  selling and general and administrative  expenses
increased  in fiscal 1996  compared  with  fiscal  1995,  because of  additional
marketing and advertising  costs believed  necessary to promote the Marker brand
name and costs  associated  with being a public company for the full 1996 fiscal
year.

      Interest  expense  increased  approximately  $200,000 to $5.2  million for
fiscal  1996,  compared to $5.0  million for fiscal  1995.  The increase was the
result of the $5.3  million  loan which the  Company  obtained  to  finance  its
investment in DNR Sportsystem.  This loan contributed  approximately $244,000 in
additional interest expense during fiscal 1996.

      Other income items increased to $3.7 million for fiscal 1996,  compared to
$1.6 million in fiscal 1995. The increase is  attributable to recognition of the
Company's  equity  share of an  unconsolidated  subsidiary's  net  income  which
totaled  approximately $1.6 million for fiscal 1996. In addition,  during fiscal
1996, the Company  purchased and sold forward foreign  exchange  contracts which
were not  accounted  for as  hedging  transactions.  As a  result,  the  Company
recorded a net gain of  approximately  $1.0 million  which has been  recorded in
other income.

      The provision for income taxes  decreased from $1.4 million in fiscal 1995
to approximately  $0.6 million in fiscal 1996. The decrease in the provision for
income taxes was  attributable  to reduced  pre-tax  income and  recognition  of
deferred tax benefit  through  reduction of the valuation  allowance on deferred
tax assets.  As the Company has recorded  taxable income during its past several
years,  circumstances  regarding  the valuation  allowance  have changed and the
allowance has been adjusted to reflect deferred tax assets which are more likely
than not to be utilized in the future by the Company.

Liquidity and Capital Resources

      The  Company's  primary  cash  needs are for  purchases  of raw  materials
inventory  for  production,   finished  goods  inventory,  funding  of  accounts
receivable,   capital   expenditures   and  strategic   business   acquisitions.
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.

                                       20
<PAGE>

      Working  capital  increased  from $13.5 million at March 31, 1996 to $21.1
million,  at March 31, 1997.  The increase in working  capital is primarily  the
result of the  consolidation of the results of DNR with those of the Company and
its other subsidiaries,  which contributed approximately $8.0 million to working
capital at March 31, 1997. In addition, the Company refinanced certain long-term
debt, which at March 31, 1996 was classified as current  maturities of long-term
debt.

      During  fiscal 1997,  the Company  spent  approximately  $10.3  million on
capital  expenditures  which consisted  primarily of manufacturing  equipment in
Germany and the US. In addition,  the Company  completed the  construction  of a
snowboard  manufacturing  facility  located  adjacent to the Company's Salt Lake
City, Utah headquarters.  The Company  anticipates  spending  approximately $4.0
million on capital expenditures in fiscal 1998.

      On  June  26,  1996,  the  Company  acquired  an  additional  55% of  DNR,
increasing the Company's total ownership of DNR to 80%. The total purchase price
for the  additional  55% of DNR was  approximately  $19.8  million.  The Company
financed the purchase  with the aggregate  net proceeds of  approximately  $14.8
million  from a  secondary  offering of primary  shares of its common  stock and
proceeds of approximately $5.0 million from long-term borrowings.

      In  January  of  1997,  the  Company  completed  the  construction  of its
snowboard manufacturing facility in Salt Lake City, Utah. At March 31, 1997, the
Company had disbursed approximately $.7 million for the purchase of the land and
$2.6  million  for  the  construction  of the  building.  The  Company  financed
approximately  $2.3 million of the $3.3 million  facility with long-term debt to
be paid over a period of 15 years.

      At March 31, 1997, the Company's primary sources of liquidity consisted of
cash and short-term  investments and available borrowings under lines of credit.
The Company has  approximately  $68.1 million  available  under various lines of
credit. At March 31, 1997, the Company had approximately  $38.9 million borrowed
under such credit  agreements.  The Company's  borrowings  under lines of credit
typically  reach their maximum  during the Company's  third fiscal  quarter.  In
fiscal 1997 and 1996, the Company had maximum  borrowings  outstanding under its
lines of credit of approximately $68.3 and $59.7 million, respectively.

      The  Company  anticipates  being able to fund its current  operations  and
capital expenditures in the foreseeable future with existing cash and short-term
investments  together  with  internally  generated  funds and  borrowings  under
available lines of credit.

                                       21
<PAGE>



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

                                       22

<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:
                                            Date
                                          Appointed
                                             to          
                                           Present    Other Business Experience
        Name               Title    Age   Position     During Past Five Years
-------------------   ------------  ----  --------  ----------------------------
Henry E. Tauber       President,     56     1984    Same
                      Chief
                      Executive
                      Officer and
                      Chairman of
                      the Board of
                      Marker
                      International

Eiichi Isomura        Chairman of    60     1981    President of Isomura
                      Marker                        Sangyo Kaisha Ltd. and
                      Japan,                1990    President of Isomura
                      Executive                     Seisakusho KK.
                      Vice
                      President
                      and a
                      Director of
                      Marker
                      International

Dr. Wilhelm           Chairman and   56     1990    Same
Fahrngruber           Managing
                      Director of
                      Marker
                      Germany

Otto H. Harsanyi      Director of    49     1992    Patent Engineer and
                      Marker                        General Manager of Group
                      Germany and                   Bernard Tapie, 1986-1992
                      Assistant
                      Secretary of
                      Marker
                      International

Kirk S. Langford      Executive      42     1994    Vice President of Marker
                      Vice                          USA, 1992-1994; Director
                      President of                  of Sales of Marker USA,
                      Marker USA                    1990-1992

Daryl P. Santos       Vice           45     1985    Same
                      President of
                      Marker
                      International

Premek Stepanek       Managing       60     1991    Same
                      Director of
                      Marker
                      Germany

(Continued on next page)

                                       23

                                       
<PAGE>

Brad L. Stewart       Executive      39  1997       Vice President and Chief
                      Vice                          Financial Officer of
                      President,                    Marker International
                      Chief                         1991-1996
                      Operating
                      Officer,
                      Secretary
                      and
                      Treasurer of
                      Marker
                      International

Sally F. Tauber (1)   Vice           36     1989    Same
                      President of
                      Marker Ltd.

Terry J. Tuttle       Chief          37     1996    Chief Financial Officer of
                      Financial                     San Diego Business Journal
                      Officer of                    1992-1996
                      Marker
                      International

Graham S. Anderson    Director       64     1985    Chairman and Chief
                                                    Executive Officer of
                                                    Pettit-Morry Co.,
                                                    1987-1994.  Director of
                                                    Commerce Bank Corporation,
                                                    Gray Harbor Paper Company
                                                    and Acordia Northwest,
                                                    Inc.  Chairman of the
                                                    National Association of
                                                    Insurance Brokers and
                                                    Alberg Holding Company.

John G. McMillian     Director       70     1990    Chairman of the Board,
                                                    President and Chief
                                                    Executive Officer of
                                                    Allegheny & Western Energy
                                                    Corporation, 1987-1995;
                                                    Director of SunBank Miami
                                                    N.A. (Sun Trust).

Vinton H. Sommerville Director       60     1990    Chief Executive Officer
                                                    and Chairman of the Board
                                                    of Slim Sommerville, Inc.,
                                                    1988-present.

Lucio Roffi           Chairman and   52     1996    Chairman and Chief
                      Chief                         Executive Officer of DNR
                      Executive                     Sportsystem Ltd.,
                      Officer of                    1990-present.
                      DNR
                      Sportsystem
                      Ltd and
                      Director of
                      Marker
                      International
---------------------------------
      (1)  Sally F. Tauber is the wife of Henry E. Tauber.

      Each  executive  officer is appointed by the Board of Directors and serves
at its pleasure.  Each member of the Board of Directors who is not an officer or
consultant  of the  Company  receives an annual fee of $6,000 for serving on the
Board of  Directors  and  reimbursement  of expenses for each Board or committee
meeting  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").

                                       24
<PAGE>

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 1997, 1996 and 1995 (collectively,  the "Named Executive Officers")
for services  rendered  during the fiscal  years ended March 31, 1997,  1996 and
1995,  respectively.  One additional named executive  officer,  who had resigned
during fiscal 1997, has been included on the list.

                          SUMMARY COMPENSATION TABLE
                                                         Long-Term
                                Annual Compensation     Compensation
                                               Other      Awards
                                              Annual    ------------
 Name and Principal  Fiscal Salary   Bonus  Compensation  Options   All Other(4)
      Position        Year     $       $          $           #     Compensation
-------------------  ------ -------  ------ ------------  -------  -------------
                                                                    

Henry E. Tauber      1997   300,000  25,000      (2)           0            500
  President and      1996   300,000  75,000      (2)           0          1,000
  Chief Executive    1995   300,000    0         (2)           0          3,908
  Officer of Marker                  
  International                        

Eiichi Isomura       1997   165,421    0         (2)           0              0
  Chairman Marker    1996   212,150    0         (2)           0              0
  Japan and Vice     1995   212,150    0         (2)           0              0
  President of
  Marker
  International (1)

Masayuki Chiba       1997   152,025    0       25,794(6)       0              0
  President Marker   1996   207,414    0         (2)           0              0
  Japan (1),(5)      1995   207,414    0         (2)      15,000              0
                                                 

Dr. Wilhelm          1997   206,996    0         (2)          0               0
Fahrngruber          1996   206,996    0         (2)     10,000               0
  Chairman and       1995   179,996    0       27,000(3) 40,000               0
  Managing Director
  of Marker Germany
  (1)

Premek Stepanek      1997   137,972  32,394      (2)          0               0
  Managing Director  1996   146,817    0         (2)     10,000               0
  of Marker Germany  1995   142,431    0         (2)     40,000               0
  (1)
Lucio Roffi          1997   277,286 360,714      (2)          0               0
Chairman and         1996        -     -          -           -               -
Chief   Executive    1995        -     -          -           -               -
Officer of DNR
Sportsystem (1)

(1)   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 1.667, US $1 for Yen 107, and US $1 for SFr
      1.4 with respect to the employees employed by Marker Germany, Marker Japan
      and DNR Sportsystem, respectively.

(Notes (2) through (6) continue on next page)

                                       25
<PAGE>

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

(2)   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.

(3)   Represents  reimbursement  of  interest  expense  related  to a personal
      mortgage.

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

(5)   In February 1997, Masayuki Chiba resigned as President of Marker Japan and
      is no longer employed by the Company.

(6)   Represents  housing allowance  paid to Masayuki  Chiba,  while  serving as
      President of Marker Japan.

      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
$137,972,  $206,996  and  $104,979,  respectively  (based on an  exchange of the
German  Mark to the US Dollar of US $1 to DM  1.667).  Mr.  Harsanyi's  contract
expires in 1998, Dr. Fahrngruber's  contract expires in 2000, and Mr. Stepanek's
contract expires in 2002.

      The Board of Directors has a standing Compensation Committee consisting of
Messrs. John G. McMillian and Graham S. Anderson. The Compensation Committee met
four times  during  the  fiscal  year ended  March 31,  1997.  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,  1997,  there were no stock  option
grants made by the Company to any of the Named Executive  Officers listed in the
Summary Compensation Table above.

                                       26
<PAGE>



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

      During the fiscal year ended March 31, 1997,  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,  1997.  In  addition,  none of the  stock  options  held by the Named
Executive  Officers at March 31,  1997 had a fair market  value in excess of the
exercise price or base price.

                                                      Value of Unexercised
                        Number of Unexercised             In-the-Money
                      Options at March 31, 1997     Options at March 31, 1997
                     ---------------------------    --------------------------
     Name            Exercisable   Unexercisable    Exercisable  Unexercisable
------------------   -----------   -------------    -----------  -------------

Henry E. Tauber               0           0            $  0           $  0

Eiichi Isomura                0           0               0              0

Masayuki Chiba (1)            -           -               -              -
     
Dr. Wilhelm Fahrngruber  22,500      27,500               0              0

Premek Stepanek          22,500      27,500               0              0

Lucio Roffi                   0           0               0              0
                                                                    
(1)   Mr. Chiba's  options have been  terminated  following his resignation in
February 1997.

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 2, 1997 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.

                                       27
<PAGE>





Name and Address of                           Number of    Percentage of
       Beneficial Owner                       Shares (1)      Class (2)
-------------------------------------         ----------   -------------     
Chancellor LGT Asset Management, Inc.
1166 Avenue of the Americas
New York, NY 10036                             1,033,200          9.0%

Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158                              781,750           6.8%

Directors and Executive Officers
-------------------------------------
Henry E. Tauber
1070 West 2300 South
Salt Lake City, Utah  84119                   4,326,055          37.6%
Graham S. Anderson                               65,286            *
Eiichi Isomura                                  142,857           1.2%
John G. McMillian                               179,640           1.6%
Vinton H. Sommerville                            54,286            *
Dr. Wilhelm Fahrngruber                          50,200            *
All directors and officers as a group         4,945,969          43.0%
--------------------------------------
* Denotes less than 1% of outstanding shares

(1)   Shares shown include common shares which could be acquired  within 60 days
      of June 2, 1997, by the exercise of outstanding stock options.

(2)   All  percentages  are  calculated  on the basis of  outstanding  shares of
      common stock, plus shares which could be acquired,  within 60 days of June
      2, 1997, by the exercise of outstanding stock options.


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 director of the Company,  and his family.  The
Company  issued the Series A Bonds on the effective  date of the Initial  Public
Offering  in  exchange  for the  Redeemable  Preferred  Stock  which was held by
Isomura  Sangyo at the time of the  Initial  Public  Offering.  The  amounts and
payment schedule of the interest  payments on each of the Series A Bonds are the
same as those of the  corresponding  converted  Redeemable  Preferred Stock. The
Series A Bonds are subject to redemption  upon not less than 30 days notice,  in
whole or in part,  at the  option  of the  Company.  As of March 31,  1997,  the
redemption  schedule  was  amended  by the  Bondholder  and  the  Company.  This
amendment to the redemption schedule extended the repayment schedule by one year
on all requested redemptions.

      The Series A-1 Bonds had an original  aggregate  face value amount of $8.0
million and bore interest,  payable  semi-annually on September 30 and March 31,
at the effective borrowing rate for the Bondholder (the "Japanese Bank Rate") of
approximately 6.6% and 7.2% for the fiscal years ending March 31, 1997 and 1996,


                                       28
<PAGE>

respectively. During the fiscal year ended March 31, 1997 and 1996, $1.0 million
of the Series A-1 Bonds were  redeemed in each year.  The  Bondholder,  upon six
months prior written  notice,  may elect to have the Company redeem a portion of
the bonds according to the following schedule:
                                   Redemption        Face Amount
               Notice On or After  On or After     to be Redeemed
               ---------------   ---------------   -------------- 
                April 1, 1998    October 1, 1998     $2,000,000
                April 1, 1999    October 1, 1999     $2,000,000

      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.  During the fiscal  year  ending  March 31,  1997,  the  Bondholder
redeemed $2.5 million of Series A-2 Bonds. Upon six months prior written notice,
the  Bondholder may elect to have the Company redeem a portion of the Series A-2
Bonds, according to the following schedule:

                                   Redemption       Face Amount
             Notice On or After    On or After     to be Redeemed
              ---------------- -----------------   --------------       
                June 16, 1998  December 16, 1998    $2,500,000
                June 16, 1999  December 16, 1999    $2,500,000

      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  Bondholder  of the Series A-3 Bond may  redeem  the bond by  providing  six
months prior written notice on or after June 16, 1998 for redemption on or after
December 16, 1998.

      During  fiscal  years 1997,  1996 and 1995,  Marker  Japan  purchased  ski
bindings and services totaling approximately $93,000, $13,000, and $0.6 million,
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.  In fiscal  year 1995,  a customer  of Marker  Japan
returned snowmaking  equipment of approximately $0.5 million to Marker Japan for
warranty purposes.  Marker Japan returned this equipment to Isomura  Seisakusho,
the supplier of such equipment,  for reimbursement.  At March 31, 1997, 1996 and
1995, the net account  receivable from Isomura Seisakusho was approximately $0.4
million, $0.5 million and $0.6 million, respectively.

                                       29
<PAGE>

      At March 31,  1997,  the Company  had  outstanding  notes in an  aggregate
amount equal to  approximately  US $9.4 million  payable to Japanese  banks.  Of
these amounts, approximately $3.2 million was secured by assets of Mr.
Isomura, a shareholder and 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
1997,  1996 and 1995,  Marker  Japan made  payments to Isomura  Sangyo  totaling
approximately $287,000, $428,000 and $272,000, 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 $851,000,  $746,000, and $821,000
of premiums for such insurance during fiscal 1997, 1996 and 1995, respectively.

      During fiscal year 1997, DNR purchased substantially all of its snowboards
from an  affiliated  entity,  of which  Gregor  Furrer & Partner  Holding  AG, a
minority shareholder of DNR, is a partner.

                                       30
<PAGE>


                                   PART IV

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-2
                Consolidated Balance Sheets as of March 31, 1997         
                    and 1996                                             F-3
                Consolidated Statements of Income for the Years
                    Ended March 31, 1997, 1996 and 1995                  F-5
                Consolidated Statements of Shareholders' Equity for
                    the Years Ended March 31, 1997, 1996 and 1995        F-6
                Consolidated Statements of Cash Flows for the Years
                    Ended March 31, 1997, 1996 and 1995                  F-7 
                Notes to Consolidated Financial Statements               F-8


     2.         Financial Statement Schedules

                Report of Independent Public Accountants on Schedule     36
                Schedule II - Valuation and Qualifying Accounts          37


     3.         List of Exhibits

           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).

           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).

                                       31
<PAGE>

         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).

                                       32
<PAGE>

         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).

         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).

                                       33
<PAGE>

         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).

(a)      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).*

         10.24  Loan Agreement between Marker International and
                Jackson National Life Insurance Company for
                $2,250,000.*

         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).

         2.3    Intentionally Omitted

                                       34
<PAGE>

         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).

         21.1   Subsidiaries of the Registrant*:

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

(b)             Reports Filed on Form 8-K:

         1      Current Report on Form 8-K dated June 19, 1996.

         2      Current  Report on Form 8-K dated July 11, 1996,  including  the
                Consolidated   Balance  Sheets  of  DNR   Sportsystem   and  its
                subsidiaries  as of  December  31,  1994 and 1995,  the  related
                Consolidated Statements of Income and Retained Earnings and Cash
                Flows for each of the three years in the period  ended  December
                31, 1995.

-----------------------------
* filed herewith

35
<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 13, 1997. 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 13, 1997

36
<PAGE>




                             MARKER INTERNATIONAL
               SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                       ALLOWANCE FOR DOUBTFUL ACCOUNTS
                  FOR THE THREE YEARS ENDING MARCH 31, 1997
                                (in thousands)


For the Year Ended:
<TABLE>
<CAPTION>

                    Balance at
                    Beginning                    Amounts                   Balance at
                    of Period    Provisions    Written Off    Other (1)  End of Period
                    ---------    ----------    -----------    ---------  -------------
                                                              
March 31, 1997

Allowance for
<S>                  <C>           <C>            <C>          <C>          <C>   
 doubtful accounts   $ 2,173       $  521         $ (431)      $(124)       $2,139
   


March 31, 1996

Allowance for
 doubtful accounts   $ 1,725       $  703         $ (172)      $ (83)       $2,173
   


March 31, 1995

Allowance for
 doubtful accounts     1,420          481           (317)        141         1,725
</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.

37
<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.

                        MARKER INTERNATIONAL

            Date:  June 27, 1997          By:   /s/ Terry J. Tuttle
                   -------------               --------------------
                                               Terry J. Tuttle
                                               Chief Financial Officer

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

             Signature                        Title                Date
             ---------                        -----                ----

       /s/ Henry E. Tauber           Chairman of the Board,    June 27, 1997
    ---------------------------      Chief Executive Officer   -------------
         Henry E. Tauber             and President (Principal
                                     Executive Officer)
                              
                               

       /s/ Terry J. Tuttle           Chief Financial Officer   June 27, 1997
   ----------------------------      (Principal    Financial   -------------
         Terry J. Tuttle             and Accounting Officer)
                                      

      /s/ John G. McMillian          Director                  June 27, 1997
    ---------------------------                                -------------
        John G. McMillian

     /s/ Graham S. Anderson          Director                  June 27, 1997
    ---------------------------                                -------------
       Graham S. Anderson

    /s/ Vinton H. Sommerville        Director                  June 27, 1997
    ---------------------------                                -------------
      Vinton H. Sommerville

       /s/ Eiichi Isomura            Director and Chairman     June 27, 1997
    ---------------------------      of  Marker Japan          -------------
         Eiichi Isomura              
                                  

         /s/ Lucio Roffi             Director    and   Chief   June 27, 1997
    ---------------------------      Executive Officer of DNR  -------------
           Lucio Roffi               Sportsystem
                                     
                                   

                                       38
<PAGE>





                                    



                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



MARKER INTERNATIONAL FINANCIAL STATEMENTS

Report of Independent Public Accountants                         F-2

Consolidated Balance Sheets as of March 31, 1997 and 1996        F-3

Consolidated Statements of Income for the Years Ended
          March 31, 1997, 1996 and 1995                          F-5

Consolidated Statements of Shareholders' Equity for
          the Years Ended March 31, 1997, 1996 and 1995          F-6

Consolidated Statements of Cash Flows for the Years Ended
          March 31, 1997, 1996 and 1995                          F-7

Notes to Consolidated Financial Statements                       F-8










                                      F-1
<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 as of March 31, 1997 and
1996, and the related  consolidated  statements of income,  shareholders' equity
and cash flows for each of the three years in the period  ended March 31,  1997.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Marker  International  and
subsidiaries as of March 31, 1997 and 1996, and the results of their  operations
and their cash flows for each of the three  years in the period  ended March 31,
1997 in conformity with generally accepted accounting principles.

As explained in Note 1 to the financial statements, effective April 1, 1995, the
Company changed its method of accounting for advertising costs.



ARTHUR ANDERSEN LLP


Salt Lake City, Utah
June 13, 1997

                                      F-2
<PAGE>



                    MARKER INTERNATIONAL AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                        AS OF MARCH 31, 1997 and 1996
                            (Dollars in Thousands)

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

                                    ASSETS


                                                        1997           1996
                                                      -------        ------

CURRENT ASSETS:
   Cash and cash equivalents                          $13,532        $ 6,189
   Accounts receivable, net of allowance for
    doubtful accounts of $2,139 and $2,173,
    respectively                                       26,279         22,151
   Inventories                                         33,849         32,668
   Prepaid and other current assets                     4,611          3,584
                                                      -------        -------
         Total current assets                          78,271         64,592
                                                      -------        -------

PROPERTY, PLANT AND EQUIPMENT:
   Land                                                 1,050            386
   Building and improvements                            7,356          4,912
   Machinery and equipment                             25,302         19,973
   Furniture, fixtures and office equipment             4,511          4,225
   Construction in progress                                -             913
                                                      ---------      -------
                                                       38,219         30,409
   Less accumulated depreciation and amortization     (18,941)       (17,288)
                                                      ---------      -------
         Net property, plant and equipment             19,278         13,121
                                                      =========      =======

INVESTMENT IN UNCONSOLIDATED SUBSIDIARY                    -           6,832
                                                      ---------      -------

INTANGIBLE ASSETS, net of accumulated amortization     17,475             -
                                                      ----------     --------
   

OTHER ASSETS                                            2,116          2,720
                                                      -------        -------
                                                   $  117,140        $87,265
                                                     ==========      =======






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

                                      F-3
<PAGE>



                    MARKER INTERNATIONAL AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS (Continued)
                        AS OF MARCH 31, 1997 and 1996
                            (Dollars in Thousands)

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

                     LIABILITIES AND SHAREHOLDERS' EQUITY


                                                       1997            1996
                                                     -------         ------

CURRENT LIABILITIES:
   Notes payable to banks                            $38,930         $30,556
   Current maturities of long-term debt                3,038           7,576
   Current maturities of Series A Bonds, issued
   to a related party                                   -              3,500
   Accounts payable                                    5,393           2,899
   Other current liabilities                           9,785           6,514
                                                     -------         -------
         Total current liabilities                    57,146          51,045
                                                     -------         -------

LONG-TERM DEBT, net of current maturities             16,487           5,452
                                                     -------         -------

SERIES A BONDS, net of current maturities,
   issued to a related party                          10,000          10,000
                                                     -------         -------
   

MINORITY INTEREST                                      1,810             -
                                                     -------         --------

COMMITMENTS AND CONTINGENCIES (Note 4)

SHAREHOLDERS' EQUITY:
   Preferred stock, $0.01 par value, 5,000,000
        shares authorized and none issued                -               -
   Common  stock,  $0.01 par value,  25,000,000
      shares  authorized;  issued and
      outstanding:1997 - 11,129,127 shares, 1996 -  
      8,447,877 shares                                   111              84
   Additional paid-in capital                         36,293          21,531
   Retained earnings (deficit)                           858          (1,293)
   Cumulative foreign currency translation 
      adjustments                                     (5,565)            446
                                                     ----------      -------
         Total shareholders' equity                     31,697        20,768
                                                     ----------      -------
                                                       $117,140      $87,265
                                                     ==========      =======

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

                                      F-4
<PAGE>



                      MARKER INTERNATIONAL AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                FOR THE YEARS ENDED MARCH 31, 1997, 1996 and 1995
                (Dollars in Thousands, Except Per Share Amounts)

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

                                                1997       1996      1995
                                              --------   --------  ------

NET SALES                                     $126,403   $ 87,911  $ 83,962
COST OF SALES                                   80,531     52,608    48,878
                                              --------   --------  --------
GROSS PROFIT                                    45,872     35,303    35,084
                                              --------   --------  --------

OPERATING EXPENSES:
   Selling                                      15,553     14,592    13,049
   General and administrative                   12,840     10,559     9,314
   Research and development                      3,141      2,762     2,349
   Warehousing and shipping                      1,827      1,566     1,455
   Amortization of goodwill and intangibles        621          -       -
                                              --------   --------  --------
                                                33,982     29,479    26,167
                                              --------   --------  --------
OPERATING INCOME                                11,890      5,824     8,917
                                              --------   --------  --------
OTHER INCOME (EXPENSE):
   Interest expense                             (5,104)    (5,193)   (4,999)
   Equity in income (loss) of
      unconsolidated subsidiary                   (281)     1,595        -
   Other, net                                    1,274      2,072     1,584
                                              --------   --------  --------
                                                (4,111)    (1,526)   (3,415)
                                              ---------  --------  --------
INCOME BEFORE INCOME TAXES, MINORITY
   INTEREST AND CUMULATIVE EFFECT OF
   ACCOUNTING CHANGE                             7,779      4,298     5,502
PROVISION FOR INCOME TAXES                      (1,656)      (609)   (1,395)
MINORITY INTEREST                               (1,521)        -         -
                                              ---------  --------  --------
INCOME BEFORE CUMULATIVE EFFECT OF
   ACCOUNTING CHANGE                             4,602      3,689     4,107

CUMULATIVE EFFECT OF ACCOUNTING CHANGE,
   NET OF TAX (Note 1)                              -        (266)       -
                                              --------   --------  -------

NET INCOME                                    $  4,602   $  3,423  $  4,107
                                              ========   ========  ========

NET INCOME APPLICABLE TO COMMON
   SHARES (Note 1)                            $  4,602   $  3,423  $  3,653
                                              ========   ========  ========

INCOME PER COMMON SHARE BEFORE CUMULATIVE
   EFFECT OF ACCOUNTING CHANGE                $   0.45   $   0.43  $   0.50

ACCOUNTING CHANGE PER COMMON SHARE                  -       (0.03)       -
                                              --------   --------  -------

NET INCOME PER COMMON SHARE                   $   0.45   $   0.40  $   0.50
                                              ========   ========  ========

WEIGHTED AVERAGE COMMON SHARES 
     OUTSTANDING                            10,285,038  8,595,453 7,367,531
                                            ==========  ========= ========= 
                                            

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

                                      F-5
<PAGE>




                                                    


                      MARKER INTERNATIONAL AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                          (In Thousands, Except Shares)
<TABLE>
<CAPTION>

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

                                                                                                                      
                                                                                                                      Cumulative
                                         Series A                                                                       Foreign
                                      Preferred Stock           Common Stock     Additional  Accumulated  Currency       Total 
                                    -------------------       ---------------      Paid-in    Earnings   Translation  Shareholders'
                                    Shares       Amount       Shares    Amount     Capital    (Deficit)  Adjustments Equity(Deficit)
                                    ------       ------       ------    ------     -------    ---------  ----------- ---------------
<S>                                  <C>         <C>       <C>          <C>       <C>          <C>          <C>           <C>      
BALANCE, MARCH 31, 1994              2,500       $2,500    5,406,055    $   54    $   2,692    $(8,132)     $   180       $ (2,706)
      Exchange of series
        A preferred stock for  
        common  stock               (2,500)      (2,500)     378,572         4        2,496       --           --              --
      Initial public offering of  
        common stock, net             --           --      2,662,250        26       16,336        --          --           16,362
      Net income                      --           --           --        --            --        4,107        --            4,107
      Translation adjustments         --           --           --        --            --         --         1,252          1,252
      Dividends on preferred stock    --           --           --        --            --         (691)       --             (691)
                               -----------     --------  -----------  --------   -----------   --------    --------       --------
BALANCE, MARCH 31, 1995               --           --      8,446,877        84        21,524     (4,716)      1,432         18,324
       Common stock options
         exercised                    --           --          1,000      --               7       --          --                7
      Net income                      --           --           --        --            --        3,423        --            3,423
      Translation adjustments         --           --           --        --            --         --          (986)          (986)
                               -----------     --------  -----------  --------   -----------   --------    --------       --------
BALANCE, MARCH 31, 1996               --           --      8,447,877        84        21,531     (1,293)        446         20,768
      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           --           --           --        --            --       (2,451)       --          (2,451)
        consolidated  subsidiary                      
         

      Net income                      --           --           --        --            --        4,602        --            4,602
      Translation adjustments         --           --           --        --            --         --        (6,011)        (6,011)
                                -----------    --------  -----------  -------   -----------    --------    --------       -------- 

                                                                                                                       
BALANCE, MARCH 31, 1997               --       $   --    11,129,127      $111   $    36,293     $   858    $ (5,565)      $ 31,697
                                ===========    ========  ===========  =======   ===========    ========    ========       ========
</TABLE>

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


<PAGE>




                      MARKER INTERNATIONAL AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED MARCH 31, 1997, 1996 and 1995
                Increase (Decrease) in Cash and Cash Equivalents
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------
                                                         1997       1996         1995
                                                       -------    -------      ------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                    <C>        <C>          <C>    
   Net income                                          $ 4,602    $ 3,423      $ 4,107
   Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
        Minority interest in income                      1,521         -            -
        Depreciation and amortization                    4,386      3,131        2,521
        Equity in (income) loss of unconsolidated          
          subsidiary                                       281     (1,595)          -
        Loss from consolidated subsidiary
          resulting from change in reporting 
          period (Note 8)                               (3,063)        -            -
        Loss on sale of property, plant and equipment      444         -            -
        Change in assets and liabilities (net of
          amounts acquired):
          Accounts receivable, net                      (3,109)      (753)      (1,431)
          Inventories                                   (3,596)    (7,127)      (1,868)
          Prepaid and other assets                       2,876       (317)        (526)
          Accounts payable                              (1,015)        45         (569)
          Other liabilities                                875        684        1,940
                                                       -------    -------      -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                                                         4,202     (2,509)       4,174
                                                       -------    -------      -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment          (10,269)    (4,380)      (5,167)
   Equity investment in DNR                                 -      (5,325)          -
   Majority purchase of DNR, net of cash 
     acquired ($5,263)                                 (14,560)        -            -
   Proceeds from disposition of equipment                  143        361           72
                                                       -------    -------      -------
NET CASH USED IN INVESTING ACTIVITIES                  (24,686)    (9,344)      (5,095)
                                                       -------    -------      -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net borrowings (payments) on notes payable to banks  12,060      3,833       (2,727)
   Issuance of common stock, net of issuance costs      14,780         -        16,362
   Dividends paid on preferred stock                        -          -        (1,551)
   Proceeds from common stock options exercised              9          7           -
   Proceeds from issuance of long-term debt             10,385      8,037        5,367
   Principal payments on long-term debt                 (3,176)    (3,262)      (2,875)
   Redemption of Series A Bonds                         (3,500)    (3,500)      (2,000)
                                                       -------    -------      -------
NET CASH PROVIDED BY FINANCING ACTIVITIES               30,558      5,115       12,576
                                                       -------    -------      -------
Effect of foreign exchange rate changes on cash         (2,731)       646          157
                                                       --------   -------      -------
Net increase (decrease) in cash and cash equivalents     7,343     (6,092)      11,812
   
Cash and cash equivalents at beginning of year           6,189     12,281          469
                                                       -------    -------      -------

CASH AND CASH EQUIVALENTS AT END OF YEAR               $13,532    $ 6,189      $12,281
                                                       =======    =======      =======
</TABLE>

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

                                      F-7
<PAGE>


NOTE 1.  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"). 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. The principal markets for
the Company's products are North America, Europe and Asia.

      In addition, Marker International,  through its 80% owned subsidiary,  DNR
Sportsystem Ltd. ("DNR"),  and its newly created and wholly-owned  subsidiaries,
DNR USA, Inc.("DNR USA"), DNR North America,  Inc. ("DNR North America") and DNR
Japan Co., Ltd. ("DNR Japan"),  is a leading designer,  developer,  manufacturer
and marketer of snowboards,  Interface Step-in SystemsTM,  traditional snowboard
bindings  and  snowboard  boots.  DNR  Sportsystem  Ltd.  designs,  develops and
distributes  snowboards  and  related  products  throughout  the world.  DNR USA
manufactures  snowboards for distribution worldwide under the Santa Cruz and DNR
brand  names.  DNR North  America and DNR Japan,  through  their own sales force
market  snowboards,  Interface Step-in  SystemsTM,  snowboard bindings and boots
directly to retailers in the United States and Japan, respectively.

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  intercompany  accounts and
transactions have been eliminated in consolidation.

                                      F-8

                                       
<PAGE>



Foreign Currency Translation

      The  functional  currency  for the  Company's  foreign  operations  is the
applicable local currency:  Marker Germany - Deutsch Marks, Marker Japan and DNR
Japan -  Japanese  Yen,  Marker  Canada -  Canadian  Dollars,  Marker  Austria -
Austrian  Schillings,  and DNR  Sportsystem  Ltd. - 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 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'  equity as  "cumulative  foreign  currency
translation adjustments."

      At March 31, 1997,  Marker AG, a subisdiary  of Marker  International  had
intercompany   borrowings  of  approximately  CHF  26.9  million,   from  Marker
International.  The borrowings are long-term in nature,  and in accordance  with
SFAS No. 52, a translation loss of approximately  $3.2 million has been included
in  the  cumulative   foreign  currency   translation   adjustment   section  of
shareholders' equity.

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, 1997, 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.

Accounts Receivable

      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
remaining  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, 1997,  the Company
has certain  accounts  receivable  from customers which are not due for over six
months.



                                       F-9
<PAGE>



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,
                                                  ----------
                                               1997         1996
                                               ----         ----
          Raw materials                      $ 1,054      $   489
          Work in process                      2,739        2,551
          Finished goods                      30,056       29,628
                                             -------      -------
                                             $33,849      $32,668
                                             =======      =======

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 or declining-balance  methods
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 - 30 years

      In January  1997,  the Company  completed  construction  of its  snowboard
manufacturing   facility   located  on  property   adjacent  to  the   Company's
headquarters  in Salt Lake City.  The total cost of the  manufacturing  facility
excluding equipment,  was approximately $3.3 million, which includes land with a
cost of approximately $0.7 million. The Company has financed  approximately $2.3
million of the completed  facility with  long-term debt to be paid over a period
of 15 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 1996.



                                       F-10
<PAGE>


Intangible Assets

      Intangible assets consist of goodwill,  trade names and licenses resulting
from the  Company's  acquisition  of DNR (See  Note 8).  Intangible  assets  are
amortized using the straight-line  method over lives ranging from 5 to 30 years.
At March  31,  1997,  accumulated  amortization  of  intangible  assets  totaled
approximately $621,000.

Advertising

      Prior to fiscal 1996, the Company  capitalized  certain  advertising costs
and amortized  those costs over the period for which the revenue  related to the
costs was recognized.  During fiscal 1996, the Company adopted the provisions of
Statement of Position  93-7,  Reporting on  Advertising  Costs,  which  requires
advertising  costs to be expensed the first time the advertising  takes place or
when incurred.  The Company has elected to expense  advertising  costs the first
time the  advertising  takes place.  In fiscal 1996,  the  cumulative  effect of
adopting  this change in  accounting  principle,  net of the related  income tax
effect, was approximately $266,000. On a pro forma basis, this change would have
had no material impact on fiscal 1995 net income.

      For the years ended March 31, 1997,  1996 and 1995,  advertising  expenses
totaled   approximately   $  3.3  million,   $4.2  million  and  $3.3   million,
respectively.

Net Income per Common Share

      Net income per common share is based upon the weighted  average  number of
shares of common stock and dilutive common stock equivalent  shares  outstanding
during the periods  presented.  Common stock equivalent  shares consist of stock
options that have a dilutive effect when applying the treasury stock method.

      In connection  with the Initial Public Offering in August 1994, all of the
outstanding  shares of the Series A preferred  stock were  exchanged for 378,572
shares  of  common  stock,  and  all of the  outstanding  shares  of  Redeemable
Preferred  Stock were converted to Series A Bonds issued to a related party with
an aggregate principal amount of $19,000,000 (See Note 3).

      Net income applicable to common shares for fiscal year 1995 reflects a pro
forma  presentation  of the  transactions  described  above as if the  exchanges
occurred on April 1, 1994 (the beginning of the 1995 fiscal year).  Accordingly,
net income  applicable  to common shares was computed by  eliminating  dividends
totaling  approximately  $87,000 on Series A preferred  stock for the year ended
March 31, 1995,  and by  subtracting  from net income  dividends that would have
been  treated as  interest  expense,  net of the  related  tax  effect,  had the
exchange of the Redeemable Preferred Stock occurred on April 1, 1994. The amount


                                       F-11
<PAGE>

by which net income was  reduced  totaled  approximately  $454,000  for the year
ended March 31, 1995. No dividends were paid during fiscal 1996 and 1997.

Fair Value of Financial Instruments

      The fair value of the  Company's  long-term  debt is  approximately  $19.9
million at March 31,  1997.  The book value of all other  financial  instruments
approximates  fair value except for derivatives (See Note 9). The estimated fair
values have been determined using appropriate  market  information and valuation
methodologies.

Recent Accounting Pronouncements

Earnings per Share

      In February  1997,  the  Financial  Accounting  Standards  Board  released
Statement of Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings  per
Share".  This statement  specifies the computation,  presentation and disclosure
requirements for earnings per share ("EPS") for financial  statements issued for
all periods  ending after  December 15, 1997.  Early  adoption is prohibited and
upon adoption,  all prior period EPS data  presented must be restated.  SFAS 128
simplifies  the  standards for computing EPS in comparison to APB Opinion No. 15
and  replaces  the  presentations  of Primary  EPS and Fully  Diluted EPS with a
presentation  of Basic EPS and Diluted EPS. The Company  believes  that SFAS 128
will not have a material impact when adopted.

Long-lived Assets

      In March 1995,  SFAS No. 121  "Accounting for the Impairment of Long-lived
Assets and for  Long-lived  Assets to be Disposed Of," was issued.  SFAS No. 121
requires that long-lived assets and certain identifiable  intangibles to be held
and used or disposed of by an entity be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable.  During fiscal 1997, the Company adopted this statement and
determined that no impairment loss need be recognized.


                                      F-12
<PAGE>


NOTE 2.  NOTES PAYABLE TO BANKS AND LONG-TERM DEBT

      Notes  payable  to banks at March  31,  1997 and  1996,  consisted  of the
following:
<TABLE>
<CAPTION>

                                                                                       1997          1996
                                                                                       ----          ----
                                                                                        (in thousands)
Credit arrangement  with a German bank, with maximum  borrowing of DM 67,000,000
     ($39,999,000).  The  arrangement  provides  for maximum  borrowings  at the
     bank's base rate or a  combination  of  borrowings  at the bank's base rate
     with DM  59,000,000  ($35,223,000)  maximum  available for Euroloans and DM
     8,000,000 ($4,776,000) available as a revolving line of credit. The line of
     credit includes  provisions for  discounting  customer notes with recourse.
     Amounts  outstanding  under  these  credit  arrangements  at March 31, 1997
     consisted of Euroloans of DM  26,000,000  ($15,522,000),  bearing  interest
     rates  ranging from 4.70% to 6.95% subject to an interest rate swap for the
     initial DM  10,000,000  ($5,970,000)  which limits the  interest  rate to a
     maximum rate of 6.95%, and DM 3,324,467  ($1,984,707) on the revolving line
     of credit which had an interest rate of 8.0% at March 31, 1997.  Borrowings
     are secured by the accounts receivable,  inventory, and equipment of Marker
     Germany and are  guaranteed  by Marker  International  and Marker USA.  The
<S>                                                                                 <C>            <C>    
     current agreement extends through July 1997.                                    $17,507        $22,525

Credit  arrangements  with four Japanese  banks,  with maximum  borrowing of YEN
     1,500,000,000   ($12,121,500).   At  March  31,  1997,  YEN   1,070,000,000
     ($8,646,670)  of borrowings  were  outstanding  with interest rates ranging
     from 1.06% to 2.25%,  due in  installments  at various  dates through March
     1998, YEN 300,000,000  ($2,424,300)  secured by the assets of a director of
     the   Company,   YEN   670,000,000   ($5,414,270)   guaranteed   by  Marker
     International,  YEN  100,000,000  ($808,100)  secured by  certain  accounts
     receivable.                                                                     8,647           7,457

Line of credit with a U.S. bank, maximum borrowings of $20,000,000, subject to a
     borrowing base limitation  (maximum amount  available at March 31, 1997 was
     $16,000,000).  Interest at the bank's  prime rate (8.5% at March 31,  1997)
     secured by the accounts  receivable  and inventory of Marker USA and Marker
     Ltd. and guaranteed by Marker International. Expires August, 1997.             12,776             574
                                                                                  --------        --------
                                                                                   $38,930         $30,556
                                                                                  ========        ========
</TABLE>

      For the years ended March 31, 1997 and 1996, the weighted average interest
rate on short-term  borrowings  outstanding  at year end was 5.2 percent and 4.9
percent,  respectively,  the maximum  short-term  borrowing  amount  outstanding
during the year was $68.3 million and $59.7 million,  respectively,  the average
amount  outstanding  during  the year  was  $51.2  million  and  $40.5  million,
respectively,  and the  weighted  average  interest  rate during the years ended
March 31, 1997 and 1996 was 5.2 percent and 5.3 percent, respectively.

                                       F-13
<PAGE>

      Long-term debt at March 31, 1997 and 1996, consisted of the following:

                                                        1997           1996
                                                        ----           ----
                                                          (in thousands)
Notes payable to two German banks,  interest  rates
  ranging from 5.80% to 9.75%,  due in installments
  through  September  2002,   secured  by  accounts 
  receivable,   inventory    and    equipment    of     
  Marker    Germany   and   guaranteed   by  Marker
  International and Marker USA                         $5,282         $4,946

Note  payable to a U.S.  bank,  interest  at 8.75%
  due October  1999,  secured by the inventory and
  accounts  receivable  of Marker  USA and  Marker      5,000              -
  Ltd. and guaranteed by Marker International

Note  payable to a U.S.  branch of a German  bank,
  interest at 4.81% due April  1998,  secured by a
  $2,000,000  time deposit  held in the  Company's      4,349          4,932
  name at the bank

Note  payable to a U.S.  bank,  interest  at 9.7%,
  due in monthly  installments  through July 2004,      1,461          1,590
  secured by a building

Note  payable  to a  Japanese  bank,  interest  at
  2.13%,  due  in  installments  through  November
  2000,  secured by the  assets of a  director  of        818          1,211
  the Company

Notes  payable to an insurance  company,  interest
  at 8.09%, due in installments  through May 2012,      2,250          -
  secured by a building

Other                                                     365            349
                                                       ------         ------
                                                       19,525         13,028
Less current maturities                                (3,038)        (7,576)
                                                       ------         ------
                                                       $16,487        $5,452
                                                       ======         ======

      The following are scheduled  principal  maturities of long-term debt as of
March 31, 1997 (in thousands):
                      Year Ending March 31,     Amount
                      1998                    $3,038
                      1999                     6,995
                      2000                     5,563
                      2001                     1,003
                      2002                       437
                      Thereafter               2,489
                                             -------
                                             $19,525
                                             =======

      Total cash paid for interest  during the years ended March 31, 1997,  1996
and 1995 was approximately $5,276,000, $5,172,000, and $3,635,000, respectively.
Included  in total cash  payments  for  interest  are Series A Bond (See Note 3)
interest  payments  which  totaled  approximately  $1,253,000,   $1,556,000  and
$183,000 for the years ended March 31, 1997, 1996 and 1995, respectively.

                                       F-14
<PAGE>

NOTE 3.  BONDS

      The holder of the then  outstanding  Series A-1,  A-2, and A-3  Redeemable
Preferred Stock (collectively,  the "Redeemable Preferred Stock") exchanged,  on
the effective date of the Initial Public Offering  (August 1994),  its shares of
Redeemable Preferred Stock for Series A-1, A-2 and A-3 bonds (collectively,  the
"Series A Bonds") of the Company. The holder of the Series A Bonds is a Japanese
corporation  (the  "Bondholder")  controlled  by a director of the Company.  The
Series A Bonds are subject to redemption  upon not less than 30 days notice,  in
whole or in part,  at the  option  of the  Company.  As of March 31,  1997,  the
redemption  schedule  was  amended  by the bond  holder  and the  Company.  This
amendment to the redemption schedule extended the repayment schedule by one year
on all requested redemptions.

Series A-1 Bonds

      The Series A-1 bonds had an original  aggregate face value 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").  The
effective  Japanese  Bank Rate at March 31,  1997 and 1996 was 6.79  percent and
6.95 percent,  respectively. The average effective Japanese bank rate during the
years  ended  March  31,  1997  and  1996  was  6.6  percent  and  7.2  percent,
respectively. During the fiscal year ended March 31, 1997 and 1996, $1.0 million
of the Series A-1 bonds were redeemed in each year.  The remaining  $4.0 million
aggregate  principal  amount of Series  A-1 bonds  outstanding  may be  redeemed
according to the following schedule:


                                   Redemption        Face Amount
             Notice On or After    On or After     to be Redeemed
                   
                April 1, 1998    October 1, 1998     $2,000,000
                April 1, 1999    October 1, 1999     $2,000,000


Series A-2 Bonds

      The Series A-2 bonds had an original aggregate face value 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, 1997 and 1996
was 9.79 percent and 9.95 percent, respectively. During the year ended March 31,
1997, $2.5 million of the Series A-2 bonds were redeemed by the Bondholder.  The
Bondholder of the Series A-2 bonds may redeem the remaining  bonds  according to
the following schedule:

                                       F-15
<PAGE>

                                   Redemption         Face Amount
             Notice On or After    On or After       to be Redeemed
                             
                June 16, 1998    December 16, 1998     $2,500,000
                June 16, 1999    December 16, 1999     $2,500,000

Series A-3 Bond

      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 the Series A-3 bond at March 31,  1997 and 1996 was 9.79
percent and 9.95 percent,  respectively.  The  Bondholder of the Series A-3 bond
may redeem the bond by  providing  six months prior  written  notice on or after
June 16, 1999 for redemption on or after December 16, 1999.


NOTE 4.  COMMITMENTS AND CONTINGENCIES

Letters of Credit

      The  Company  has  available  letters  of  credit  with  a  U.S.  bank  of
$2,500,000.  Letters of credit totaling  approximately $713,000 were outstanding
as of March 31, 1997.

Leases

      The Company is committed under various long-term  noncancellable operating
leases requiring minimum annual rentals as follows (in thousands):

                  Year Ending March 31,       Amount
                  1998                        $2,237
                  1999                         2,017
                  2000                         1,704
                  2001                         1,198
                  2002                         1,127
                  Thereafter                  10,760
                                             -------
                                             $19,043
                                             =======

      Rent and lease  expense  was  approximately  $3,176,000,  $3,572,000,  and
$2,996,000 for the years ended March 31, 1997, 1996 and 1995, respectively.

                                       F-16
<PAGE>

Discounted Notes Receivable

      Marker Japan was contingently liable for discounted trade notes receivable
on a full recourse basis of  approximately  $2,944,000 at March 31, 1997.  These
notes receivable mature in various amounts through September 1997.

Royalty Agreements

      During fiscal year 1997,  the Company  renewed its agreement with the Salt
Lake Organizing  Committee for the 2002 Olympic Winter Games as licensee for the
sale of  apparel,  in the state of Utah and  throughout  various  regions of the
U.S.,  with the imprint of the 2002 Olympic Winter Games to be held in Salt Lake
City. The Company was again awarded  licenses for both winter and summer apparel
with the current  agreements  extending  through  December  31,  1997.  Over the
remaining term of the  agreements,  the Company is required to pay the Salt Lake
Organizing  Committee  periodic minimum royalty payments totaling  approximately
$600,000.

      DNR  Sportsystem  Ltd.  is party to a license  agreement  (the "Santa Cruz
License") with California  based N.H.S.,  Inc.  ("Santa  Cruz").  The Santa Cruz
License may be  terminated  on May 31,  2001,  upon one year's  prior  notice by
either party,  and unless so  terminated,  will continue for successive two year
periods.  Among other things, the Santa Cruz License requires that DNR pay Santa
Cruz  certain  royalties  as a  percentage  of DNR's  gross sales  arising  from
products sold under the Santa CruzTM brand name.

      During fiscal 1997,  Thomas Sims terminated a license agreement (the "Sims
License") between DNR and Thomas Sims. The Sims License required DNR to pay Sims
certain  royalties as a percentage  of DNR's gross sales  arising from  products
sold under the SimsTM brand and that the SimsTM  products  comprise at least 60%
of DNR's total sales (See Legal Matters below and See Note 8).

      Royalties related to the license agreements ranged from 2% to 6% of sales.
For the period  January 1, 1996 through  December 31, 1996 DNR incurred  royalty
expenses of approximately $1.5 million.

Legal Matters

      On  September  26,  1996,  Thomas P. Sims  ("Sims")  filed an action  (the
"Action") in the Superior  Court of  California  for the County of Santa Barbara
(the  "Superior  Court")  against  the  Company  and DNR  relating  to a license
agreement dated September 8, 1991, between Sims and DNR ( the "License") for the
production and  distribution of snowboards and related products bearing the Sims
trademark  outside of the United States and Canada.  Sims  alleged,  among other
things,  that the Company and DNR were promoting products  (including DNR's soft
boot Step-in  Interface  System binding,  the "Interface  System") that unfairly
competed with Sims' products and that DNR had breached the License. On September


                                       F-17
<PAGE>

27, 1996, Sims notified DNR of his intention to terminate the License agreement,
which was scheduled to continue until July 1, 2001,  and,  pursuant to the terms
of the License, initiated arbitration proceedings against DNR by filing a demand
for arbitration (the "Arbitration").  Sims claims that termination was justified
by the alleged  breaches of the License  agreement by DNR. Sims also claims that
the Company  misappropriated  a Sims  design for a  snowboard  binding and seeks
damages based upon various  legal and factual  theories,  including  claims that
DNR's conduct damaged the value of his trademarks and that DNR distributed goods
not  authorized  by the License  agreement.  Sims has not  specified  the amount
sought as damages.

      The Company  denies Sims' claims and DNR has filed a counter claim against
Sims in which it seeks damages from Sims for wrongfully  terminating the license
agreement,  for selling his interest in his trademarks and the License agreement
to a third party in violation  of a right of first  refusal in favor of DNR that
is stated in the License agreement, and for other relief and damages.

      On November  27, 1996,  the Superior  Court  granted  Sims'  request for a
preliminary  injunction against the Company and DNR. The Superior Court's ruling
prevents DNR from  manufacturing,  shipping,  selling or distributing  snowboard
products with the Sims trademark,  pending the outcome of the  Arbitration.  The
Superior  Court,  however,  refused to grant Sims'  request that DNR be enjoined
from  producing and  marketing  the  Interface  System under the "DNR" and other
brand names.  Additionally,  the  preliminary  injunction  does not restrict the
right of DNR to produce and market  snowboards and related  products under brand
names other than Sims.

      The  preliminary  injunction is not a final judgment and factual  findings
made by the Superior  Court in the  preliminary  injunction  proceeding  are not
binding upon the arbitrator. In the Arbitration,  Sims has filed a claim against
DNR for breach of the License and DNR has filed a counterclaim  against Sims for
wrongful  termination of the License.  The  Arbitration  hearing is scheduled to
take place over a four week period  beginning  in July 1997.  Under the terms of
the License, the arbitrator's award is binding on the parties and is not subject
to appeal or  further  court  review  except  for  extraordinary  circumstances.
Although  only Sims and DNR are  parties  to the  arbitration,  the  arbitrators
decision could conclude many of the disputes that are the subject of the Action,
which has been stayed while the Arbitration is pending.

      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.  The nature of the sports of skiing and snowboarding  entail
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 business. The


                                      F-18
<PAGE>

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). 

      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
further correspondence from the DOJ, there can be no assurance that the DOJ will
not pursue these matters further.


NOTE 5.  INCOME TAXES

      The  Company  recognizes  a  liability  or  asset  for  the  deferred  tax
consequences  of  temporary  differences  between  the tax  bases of  assets  or
liabilities and their reported amounts in the financial statements.

      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.  However,  the  Company  has  provided  for  U.S.  income  taxes  on the
undistributed  earnings of its investment in DNR Sportsystem  Ltd. prior to June
26, 1996, while it was an unconsolidated subsidiary.

      The domestic and foreign  components of income before provision for income
taxes for the years  ended  March 31,  1997,  1996 and 1995 were as follows  (in
thousands):

                                   1997      1996     1995
                                  ------    ------   -----
              Domestic           $(2,551)   $  386   $1,233
              Foreign              8,809     3,912    4,269
                                  ------    ------   ------
                                  $6,258    $4,298   $5,502
                                  ======    ======   ======




                                       F-19
<PAGE>






     The  Company's  provision  for income  taxes for the years  ended March 31,
1997, 1996 and 1995 consisted of the following (in thousands):

                                   1997      1996     1995
                                  ------    ------   -----
              Current:
                 Federal          $   15    $   15   $  180
                 State                30         7       72
                 Foreign           1,945     1,210    1,143
                                  ------    ------   ------
                                   1,990     1,232    1,395
              Deferred              (334)     (623)      -
                                  ------    ------   -----
                                  $1,656    $  609   $1,395
                                  ======    ======   ======

      For the years ended March 31, 1997,  1996 and 1995,  the federal and state
current  provisions for income taxes are presented net of the benefits  realized
from operating loss carryforwards which totaled approximately $166,000, $123,000
and  $463,000,  respectively.  In addition,  the foreign  current  provision for
income  taxes  are  presented  net of  benefits  realized  from  operating  loss
carryforwards of approximately $0, $213,000 and $931,000, respectively.

      The provision for income taxes as a percentage of income before  provision
for income taxes differed from the statutory Federal rate due to the following:

                                                  1997     1996    1995
                                                 ------   ------  -----
    Statutory Federal income tax rate             34.0%    34.0%   34.0%
    State income taxes net of Federal income       
     tax benefit                                   0.3      0.6     3.7
    Change in deferred tax asset valuation        
     allowance                                    (5.3)   (20.2)  (30.4)
    Foreign earnings taxed at different rates     (2.3)    12.1    16.1
    Investment in unconsolidated subsidiary       (1.9)   (12.6)      -
    Other                                          1.7      0.3     2.0
                                                 -----    -----   -----
                                                  26.5%    14.2%   25.4%
                                                 =====    =====   =====


                                       F-20
<PAGE>







     The components of the net deferred tax assets and  liabilities at March 31,
1997 and 1996 were as follows (in thousands):

                                                           1997     1996
                                                           ----     ----
          Deferred tax assets:
             Intercompany profit                          $ 801    $ 842
             Domestic net operating loss carryforwards       67      226
             Allowance for doubtful accounts                410      343
             Accrued expense reserves                       625      404
             Foreign  tax  credits  and  other  credit      
               carryforwards                                190      215
             Other                                          376      341
                                                          -----    -----
                Total deferred tax assets                 2,469    2,371
          Valuation allowance                              (428)    (574)
                                                          -----    -----
                                                          2,041    1,797
          Deferred tax liabilities:
             Equity investment                             (139)    (224)
             Other                                         (356)    (360)
                                                          -----    -----
                Total deferred tax liabilities             (495)    (584)
                                                          -----    -----
                Net deferred tax assets                   $1,546   $1,213
                                                          ======   ======

      The  recognition of deferred tax assets is based upon judgments  regarding
the  potential  realization  of such assets in the future.  Based upon  positive
evidence such as a recent  history of earnings and  utilization of net operating
loss  carryforwards,  management  has deemed that a reduction  of the  valuation
allowance is  appropriate to reflect  utilization of certain  recorded tax asset
amounts.  Although  realization is not assured,  management  believes it is more
likely than not that a portion of the net  deferred  tax asset will be realized.
The amount of the deferred tax asset considered  realizable,  however,  could be
reduced  in the near term if  estimates  of future  taxable  income  during  the
carryforward period are reduced.

      As of March 31,  1997,  the Company has domestic  tax net  operating  loss
carryforwards of approximately $198,000 which expire in 2006.  Additionally,  as
of March 31,  1997,  the  Company has  domestic  foreign  tax  credits,  general
business  credits and  alternative  minimum tax credits of $73,000,  $36,000 and
$85,000, respectively.

     Cash paid for income taxes in the years ended March 31, 1997, 1996 and 1995
was approximately $1,216,000, $1,114,000 and $507,000, respectively.

                                       F-21
<PAGE>


NOTE 6.  PREFERRED STOCK

      Upon the effective date of the Initial Public Offering, the holders of the
Series A Preferred Stock  exchanged all of the outstanding  shares of such stock
for 378,572  shares of Common Stock.  On the same date, the holder of the Series
A-1, A-2 and A-3 Redeemable  Preferred  Stock  exchanged all of the  outstanding
shares of such stock for Series A-1,  A-2 and A-3 Bonds with an  aggregate  face
value of $19,000,000 (Note 3).

      There were no preferred stock dividends for the years ended March 31, 1996
and  1997.   However,   dividends  on  the  Series  A  preferred  stock  totaled
approximately  $87,000  for the year ended  March 31,  1995.  Cumulative  annual
dividends were computed in accordance with prescribed formulas which resulted in
total  dividends  for Series A-1  Redeemable  Preferred  Stock of  approximately
$231,000 for the year ended March 31, 1995.  Dividends for Series A-2 Redeemable
Preferred  Stock and Series A-3  Redeemable  Preferred  Stock for the year ended
March 31, 1995 totaled $339,000 and $34,000, respectively.


NOTE 7.  COMMON STOCK TRANSACTIONS

Stock Offering

      On July 23, 1996, the Company closed on its Secondary  Public  Offering of
the  Company's  common  stock.  In  connection  therewith,  the  Company  issued
2,680,000  shares of common stock,  including  180,000 shares of common stock in
connection  with the  closing  of the  underwriters  overallotment  option.  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.

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,  1997,  115,750  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, 1997.

                                       F-22
<PAGE>



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.  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.  As of March 31,  1997 and
1996, the Company had the following options outstanding and exercisable:

                                                      Weighted Avg
        Year Ended March 31, 1997           Amount    Exercise Price
        Options Granted                    236,000        $ 5.42
        Options Exercised                  (1,250)         7.125
        Options Expired/Forfeited          (44,250)         6.83
        Options Canceled                  (169,000)         5.75
        Options outstanding                877,500          6.46
        Options exercisable                277,750          6.96

        Year Ended March 31, 1996
        Options Granted                    359,500        $ 5.91
        Options Exercised                  (1,000)         7.125
        Options Expired/Forfeited          (25,000)         6.95
        Options outstanding                856,000          6.62
        Options exercisable                125,375         7.125

      Subsequent to year end, the Board of Directors  amended the exercise price
of 468,500 options  originally granted on November 1, 1994 at an option price of
$7.125  per share to $4.125 per share,  which was the  closing  price for Marker
common stock on April 15, 1997, the date the options were amended.

      The  Company  has  adopted the  disclosure-only  provisions  of  Financial
Accounting  Standards  No.  123,  "Accounting  for  Stock-Based   Compensation."
Accordingly,  no  compensation  expense has been recognized for its 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


                                       F-23
<PAGE>

income and earnings  per share would have been reduced to the pro forma  amounts
indicated below:

                                                       1997          1996
                                                       ----          ----
        Net Income - As Reported (in thousands)      $4,602        $3,423
        
        Net Income - Pro Forma (in thousands)        $4,190        $3,265
        

        Earnings per share - As Reported            $  0.45        $ 0.40
        Earnings per share - Pro Forma              $  0.41        $ 0.38

      The  following   information   applies  to  the  options  outstanding  and
exercisable  at March 31, 1997:  233,000 of the 877,500  options  outstanding at
March 31, 1997 have exercise  prices  between  $4.00 and $5.75,  with a weighted
average  exercise price of $5.41 and a weighted  average  remaining  contractual
life of 9.3  years  of which  none of these  options  are  exercisable,  and the
remaining  644,500 options have exercise prices between $6.00 and $7.13,  with a
weighted  average  exercise  price of $6.83  and a  weighted  average  remaining
contractual  life of 7.7 years of which  approximately  277,750 of these options
are exercisable; their weighted average exercise price is $6.96.

      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 ending March 31, 1997 and 1996 were estimated at $4.27
and  $4.37,  respectively,   on  the  date  of  grant  using  the  Black-Scholes
option-pricing  model with the following weighted average assumptions for grants
in 1997 and 1996, respectively: dividend yield of 0%, expected volatility of 78%
and expected lives of 6 years, for both years; and a risk free rate of return of
6.6% and 6.1%, and an assumed  forfeiture  rate of 2.3% and 7.9%,  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 1997 and 1996 was $4.33 for both years.


NOTE 8.  INVESTMENT IN SUBSIDIARY

      On June 30, 1995,  the Company  acquired  25% of the common  shares of DNR
Sportsystem Ltd. ("DNR"), 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 DNR 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


                                       F-24
<PAGE>

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 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's financial information.  As such, DNR'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's  operating  results for the period  January 1, 1997 to March 31,  1997,
effectively  making DNR's  current  reporting  period the same as that of Marker
International 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's net loss for that same period.  DNR 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 reported net
sales of $49.7 million,  operating income of $6.7 million and net income of $6.4
million.  For the period January 1, 1995 through December 31, 1995, DNR reported
net sales of $44.0 million,  operating  income of $6.7 million and net income of
$5.6 million.  However, the Company's actual benefit from the 1996 DNR 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 and significant  interest
expense incurred by the Company relating to the purchase.

      The  following  unaudited  pro forma  information  presents  a summary  of
consolidated  results of operations of the Company and DNR as if the Company had
owned 80% of DNR at the beginning of fiscal 1997 and 1996. Pro forma adjustments
have been made to give effect to amortization of goodwill,  interest  expense on
acquisition debt and certain other adjustments.  The pro forma results have been
prepared for comparative  purposes only. They do not purport to be indicative of
the results of  operations  which  actually  would have resulted had the Company
owned 80% of DNR for the entire fiscal years 1997 and 1996, or of future results
of operations of the consolidated  entities.

(Unaudited and in thousands except 
 per share amounts)                             For the Year ended March 31,
                                                      1997          1996

Net Sales                                        $  131,354     $ 131,949
Operating income                                      9,497        11,653
Net income                                            3,531         5,186
Earnings per common share                        $     0.32     $    0.47

                                      F-25
<PAGE>


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.

Foreign Exchange Contracts

      Forward foreign  exchange  contracts are 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 has available,  through its credit  arrangement  with a German bank, the
ability to enter into forward foreign  exchange  contracts to purchase up to the
equivalent of DM 70.0 million. In addition, the Company has the ability to enter
into  forward  foreign  exchange  contracts  with three  United  States banks to
purchase, in the aggregate, up to the equivalent of US$70.0 million.

      The Company holds forward exchange contracts to purchase German marks with
U.S.  dollars,  Canadian  Dollars and Japanese Yen, and to sell German marks for
U.S.  dollars.  The contracts  mature at various  dates through March 1998.  The
outstanding  forward exchange  purchase and sale contracts at March 31, 1997 are
as follows:

    Selling             Buying         Contracted
     Amount             Amount        Forward Rate
                                      
  (Y)440,906,230     DM  7,000,000   59.284 - 69.29
  CND$ 2,179,316     DM  2,500,000    1.115 - 1.195
    $ 28,978,882     DM 45,060,250   1.5295 - 1.6419

      During fiscal years ended March 31, 1997 and 1996,  the Company  purchased
and sold options and forward foreign exchange contracts, respectively which were
not accounted for as hedges.  As a result,  the Company recorded in other income
net gains of approximately $.8 million and $1.0 million, respectively.

      Counterparties  to the foreign  exchange  contracts  are  typically  major
international financial  institutions.  At March 31, 1997, the fair value of the
foreign  exchange  contracts  indicates a potential loss of $1.1 million,  which
represents the total deferred loss on such contracts.  The Company's theoretical
risk in these  transactions  is the cost of replacing,  at current market rates,
these contracts in the event of default by the counterparty. Management believes
the risk of incurring such losses is remote.

                                      F-26
<PAGE>

Interest Rate Swap Agreement

      The Company has entered into an interest rate swap agreement to reduce the
impact of  changes in  interest  rates on its  variable  rate  revolving  credit
agreement (See Note 3). The  differential to be paid or received on the interest
rate swap  agreement is  recognized  over the term of the agreement as either an
increase  or  decrease  of  interest  expense.  As of March  31,  1997,  the net
unrealized loss on this agreement was approximately $52,000 (DM 86,800) which is
the estimated amount that the financial  institution  would receive in order for
the Company to terminate the swap agreement as of March 31, 1997.

NOTE 10.  RELATED PARTY TRANSACTIONS

      During  fiscal  years 1997,  1996 and 1995,  Marker  Japan  purchased  ski
bindings and services totaling approximately $93,000, $13,000, and $0.6 million,
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.  In fiscal  year 1995,  a customer  of Marker  Japan
returned snowmaking  equipment of approximately $0.5 million to Marker Japan for
warranty purposes.  Marker Japan returned this equipment to Isomura  Seisakusho,
the supplier of such equipment,  for reimbursement.  At March 31, 1997, 1996 and
1995, the net account  receivable from Isomura Seisakusho was approximately $0.4
million, $0.5 million and $0.6 million, respectively.

      At March 31, 1997, the Company had outstanding  credit  arrangements in an
aggregate  amount equal to  approximately  U.S. $9.4 million payable to Japanese
banks. Of these amounts, approximately $3.2 million was secured by assets of Mr.
Isomura, a shareholder and 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
1997,  1996 and 1995,  Marker  Japan made  payments to Isomura  Sangyo  totaling
approximately $287,000, $428,000 and $272,000, 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 $851,000,  $746,000, and $821,000
of premiums for such insurance during fiscal 1997, 1996 and 1995, respectively.

      During fiscal year 1997, DNR purchased substantially all of its snowboards
from an  affiliated  entity,  of which  Gregor  Furrer & Partner  Holding  AG, a
minority shareholder of DNR, is a partner.

                                       F-27
<PAGE>

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,  1997,  1996 and 1995,
employer  contributions  totaled  approximately  $47,000,  $41,000 and  $43,000,
respectively.

                                      F-28
<PAGE>


NOTE 12.  INTERNATIONAL OPERATIONS

      The Company's  operations involve a single industry segment. The Company's
three  geographic  regions are North  America,  Europe,  and Asia.  Net sales to
affiliates consist primarily of inventory  transactions and are made at transfer
prices which approximate prices charged to unaffiliated customers. The following
is a summary of the  Company's  operations  by  geographic  region for the years
ended March 31, 1997, 1996 and 1995 (in thousands):

                                             1997        1996        1995
                                           -------     -------     ------
         Net Sales to Unaffiliated
         Customers:
            North America                  $39,477     $40,702     $34,545
            Europe                          73,927      30,245      29,569
            Asia                            12,999      16,964      19,848
                                           -------     -------     -------
                  Total Consolidated      $126,403     $87,911     $83,962
                                           ========    =======     =======
         Export Sales From Europe to Asia: $ 1,677     $ 1,649     $   848
                                           =======     =======     =======
         
         Net Sales to Affiliates:
            North America                  $   375     $   515     $   658
            Europe                          36,426      42,905      34,141
            Asia                                -           22          -
                                           -------     -------     ------
                  Total                    $36,801     $43,442     $34,799
                                           =======     =======     =======
         Operating Income:
            North America                  $   (96)    $ 2,681     $ 2,177
            Europe                          11,711       4,064       5,462
            Asia                               308        (389)      1,036
               Eliminations                    (33)       (532)        242
                                           --------    --------    -------
                  Total Consolidated     $  11,890     $ 5,824     $ 8,917
                                           =========   =======     =======
         Identifiable Assets:
            North America                  $52,742     $37,072     $35,111
            Europe                          70,020      50,339      40,764
            Asia                            13,653      14,814      15,666
               Eliminations                (19,275)    (14,960)     (8,543)
                                           --------    --------    -------
                  Total Consolidated      $117,140     $87,265     $82,998
                                           ========    =======     =======

                                      F-29

<PAGE>


NOTE 13.  SELECTED QUARTERLY FINANCIAL DATA (Unaudited)


For the fiscal years ended March 31, (in thousands except per share amounts):

                                 First        Second       Third        Fourth
                                 Quarter      Quarter      Quarter      Quarter
                                 -------      -------      -------      -------
1997
   Net Sales                     $1,624      $31,600      $60,305      $32,874
                                 ======      =======      =======      =======

   Gross Profit                     781       12,437       20,649       12,005
                                 ======       ======       ======       ======

   Net Income (Loss)             (3,960)       2,884        5,418          260
                                 =======      ======       ======       ======

   Net Income (Loss)
     Applicable to               (3,960)       2,884        5,418          260
                                 =======      ======       ======       ======
      Common Shares

   Net Income (Loss) Per
      Common Share                (0.46)        0.28         0.49         0.02
                                 =======     =======      =======      =======

  1996
   Net Sales                     $2,244      $30,008      $33,965      $21,694
                                 ======      =======      =======      =======

   Gross Profit                     126       13,697       13,895        7,585
                                 ======       ======       ======       ======

   Net Income (Loss)             (4,271)       3,802        3,500          392
                                 =======      ======       ======       ======

   Net Income (Loss)
     Applicable to Common
     Shares                      (4,271)       3,802        3,500          392
                                 =======      ======       ======       ======
      

   Net Income (Loss) Per
      Common Share                (0.51)        0.45         0.40         0.05
                                 ========     =======      =======      =======

1995
   Net Sales                     $1,052      $30,895      $34,726      $17,289
                                 ======       =======      =======     =======

   Gross Profit                     295       13,346       15,504        5,939
                                 ======       ======       ======      =======

   Net Income (Loss)             (4,299)       4,313        5,072         (979)
                                 ======       ======       ======      =======

   Net Income (Loss)
     Applicable to Common 
     Shares                      (4,583)       4,161        5,054         (979)
                                 ======       ======       ======      =======
     

   Net Income (Loss) Per
      Common Share                (0.79)        0.61         0.60        (0.12)
                                 =======      =======      =======     ========





                                      F-30