SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


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

                For the quarterly period ended June 30, 1999
                                       OR

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

             For the transition period from         to
                                           --------   --------

                         Commission File Number: 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 Identification No.)
     incorporation or organization)


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

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

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  filings
requirements for the past 90 days.
                                    Yes   X                   No
                                       ------                   ------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

         Class of Common Stock                    Outstanding at August 13, 1999
         ---------------------                    ------------------------------
     Common Stock, $0.01 par value                         11,140,577


                                       1
<PAGE>

<TABLE>
<CAPTION>
                              MARKER INTERNATIONAL

                                TABLE OF CONTENTS


                         Part I - Financial Information

         <S>                                                                                   <C>
         Item 1.   Financial Statements                                                       Page
                                                                                              ----
                           Condensed Consolidated Balance Sheets
                                    As of June 30, 1999 and March 31, 1999                     3

                           Condensed Consolidated Statements of Operations
                                    For the Three Months Ended
                                    June 30, 1999 and 1998                                     5

                           Condensed Consolidated Statements of Cash Flows
                                    For the Three Months Ended
                                    June 30, 1999 and 1998                                     7

                           Notes to Condensed Consolidated Financial Statements                8


         Item 2.   Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                                          21


         Item 3.  Quantitative and Qualitative Disclosures About Market Risk                  31

                           Part II - Other Information


         Item 3. Defaults Upon Senior Securities                                              34

         Item 6.   Exhibits and Reports on Form 8-K                                           36

         Signatures                                                                           38
</TABLE>


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                      MARKER INTERNATIONAL AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
                                   (Unaudited)

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

                                     ASSETS

                                                            June 30,   March 31,
                                                             1999        1999
                                                           --------    --------

CURRENT ASSETS:
     Cash and cash equivalents                             $  1,903    $  5,547
     Accounts receivable, net of allowance for doubtful
         accounts of $1,429 and $1,721, respectively         17,125      22,392
     Inventories                                             23,333      18,752
     Prepaid and other current assets                           587         391
                                                           --------    --------
              Total current assets                           42,948      47,082
                                                           --------    --------

PROPERTY, PLANT AND EQUIPMENT:
     Land                                                       386         386
     Building and improvements                                4,584       4,645
     Machinery and equipment                                 19,063      20,096
     Furniture, fixtures and office equipment                 4,050       4,797
                                                           --------    --------
                                                             28,083      29,924
     Less accumulated depreciation and amortization         (18,106)    (18,725)
                                                           --------    --------
              Net property, plant and equipment               9,977      11,199
                                                           --------    --------

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

OTHER ASSETS                                                    446         448
                                                           --------    --------
                                                           $ 53,371    $ 58,973
                                                           ========    ========





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


                                       3
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
                             (Dollars in Thousands)
                                   (Unaudited)

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

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

                                                           June 30,    March 31,
                                                             1999        1999
                                                           --------    --------

CURRENT LIABILITIES:
     Notes payable to banks                                $ 51,495    $ 46,062
     Current maturities of long-term debt                     4,256       5,595
     Current maturities of Series A Bonds, issued to a
         related party                                       11,175      11,399
     Accounts payable                                         3,157       5,948
     Other current liabilities                               12,045      12,937
                                                           --------    --------
              Total current liabilities                      82,128      81,941
                                                           --------    --------

LONG-TERM DEBT,  net of current maturities                    2,426       3,821
                                                           --------    --------

REDEEMABLE SERIES B PREFERRED STOCK                           3,000       3,000
                                                           --------    --------

SHAREHOLDERS' DEFICIT:
     Common stock                                               111         111
     Additional paid-in capital                              36,736      36,311
     Accumulated deficit                                    (69,572)    (64,658)
     Accumulated other comprehensive loss                    (1,458)     (1,553)
                                                           --------    --------
              Total shareholders' deficit                   (34,183)    (29,789)
                                                           --------    --------
                                                           $ 53,371    $ 58,973
                                                           ========    ========




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

                                       4
<PAGE>

<TABLE>
<CAPTION>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Dollars in Thousands, Except Per Share Amounts)
                                   (Unaudited)

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

                                                                       For the Three Months
                                                                            Ended June 30,
                                                                       --------------------
                                                                         1999       1998
                                                                       -------    -------
<S>                                                                    <C>        <C>
NET SALES                                                              $ 3,070    $ 2,662
COST OF SALES                                                            2,179      1,597
                                                                       -------    -------
GROSS PROFIT                                                               891      1,065
                                                                       -------    -------

OPERATING EXPENSES:
     Selling                                                             1,698      2,434
     General and administrative                                          2,299      2,436
     Research and development                                              440        684
     Warehousing and shipping                                              311        370
                                                                       -------    -------
                                                                         4,748      5,924
                                                                       -------    -------

OPERATING LOSS                                                          (3,857)    (4,859)
                                                                       -------    -------
OTHER INCOME (EXPENSE):
     Interest expense                                                     (960)    (1,492)
     Other, net                                                            (48)       238
                                                                       -------    -------
                                                                        (1,008)    (1,254)
                                                                       -------    -------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                     (4,865)    (6,113)
PROVISION FOR INCOME TAXES                                                 (62)      --
                                                                       -------    -------
LOSS FROM CONTINUING OPERATIONS                                         (4,927)    (6,113)
                                                                       -------    -------

DISCONTINUED OPERATIONS:
     Loss from operations of discontinued snowboard business, net
     of income taxes                                                      --         (241)
     Income on disposal of snowboard business, net of income
     taxes                                                                  81       --
                                                                       -------    -------

INCOME (LOSS) FROM DISCONTINUED OPERATIONS                                  81       (241)
                                                                       -------    -------

NET LOSS                                                               $(4,846)   $(6,354)
                                                                       =======    =======
</TABLE>



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


                                       5
<PAGE>
<TABLE>
<CAPTION>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
                (Dollars in Thousands, Except Per Share Amounts)
                                   (Unaudited)

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

                                                                                        For the Three Months
                                                                                               Ended June 30,
                                                                                     ----------------------------
                                                                                        1999             1998
                                                                                     -----------      -----------

LOSS PER COMMON SHARE (Both Basic and Diluted):

<S>                                                                                  <C>              <C>
     Loss from continuing operations                                                 $    (0.44)      $    (0.55)
                                                                                     -----------      -----------

     Income (Loss) from operations of discontinued snowboard business                     --               (0.02)
     Income (Loss) on disposal of snowboard business                                       0.01            --
                                                                                     -----------      -----------
                                                                                                  -
     Income (Loss) from discontinued operations                                            0.01            (0.02)
                                                                                     ----------       -----------

     Net loss                                                                        $    (0.43)      $    (0.57)
                                                                                     ===========      ===========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Both
  Basic and Diluted)                                                                 11,140,577       11,130,577
                                                                                     ===========      ===========
</TABLE>


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

                                       6
<PAGE>


<TABLE>
<CAPTION>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)

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

                                                                       For the Three Months
                                                                            Ended June 30,
                                                                       --------------------
                                                                          1999        1998
                                                                       --------    --------

<S>                                                                    <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                            $ (4,846)   $ (6,354)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
    Minority interest                                                      --           (52)
    Depreciation and amortization                                         1,011       1,273
    Change in assets and liabilities:
     Decrease in accounts receivable, net                                 2,025       5,851
     Increase in inventories                                             (6,856)    (16,205)
     Increase in prepaid and other assets                                  (263)       (251)
     Increase in accounts payable                                            80       1,686
     Decrease in other current liabilities                                 (825)     (1,395)
                                                                       --------    --------
NET CASH USED IN OPERATING ACTIVITIES                                    (9,674)    (15,447)
                                                                       --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property, plant and equipment                             (339)     (1,951)
    Proceeds from disposition of equipment                                  160        --
                                                                       --------    --------
NET CASH USED IN INVESTING ACTIVITIES                                      (179)     (1,951)
                                                                       --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings on notes payable to banks                              8,498      15,771
    Proceeds from issuance of long-term debt                               --           360
    Principal payments on long-term debt                                 (2,541)       (490)
                                                                       --------    --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                 5,957      15,641
                                                                       --------    --------

Effect of foreign exchange rate changes on cash and cash equivalents        252          96
                                                                       --------    --------

Net decrease in cash and cash equivalents                                (3,644)     (1,661)
Cash and cash equivalents at beginning of period                          5,547       4,241
                                                                       --------    --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $  1,903    $  2,580
                                                                       ========    ========
</TABLE>


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


                                       7
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Interim Financial Statements

         The accompanying  condensed  consolidated  financial statements include
the accounts of Marker  International and its subsidiaries (the "Company").  The
condensed  consolidated  financial statements have been prepared pursuant to the
rules and  regulations of the Securities  and Exchange  Commission  (the "SEC").
Certain  information  and footnote  disclosures  normally  required in financial
statements prepared in accordance with generally accepted accounting  principles
have  been  omitted  pursuant  to such  rules  and  regulations.  The  financial
statements  reflect  all  adjustments   (consisting  only  of  normal  recurring
adjustments)  which,  in the  opinion of  management,  are  necessary  to fairly
present the financial  position,  results of  operations  and cash flows for the
periods presented.

         The Company's  financial  statements  for the year ended March 31, 1999
and unaudited financial statements for the quarter ended June 30, 1999 have been
prepared on a going concern basis,  which contemplates the realization of assets
and settlement of liabilities  and commitments in the normal course of business.
The Company  incurred net losses of  approximately  $4.8 million for the quarter
ended June 30, 1999 and approximately $48.0 million for the year ended March 31,
1999.  As of  June  30,  1999,  the  Company  had  a  shareholders'  deficit  of
approximately  $34.2  million.  The Company was not, and continues not to be, in
compliance  with  covenants  of  various  debt  and  other  obligations  and has
insufficient  working capital to fund operations (See Note 2 for a discussion of
obligations in default).  These factors,  among others,  raise substantial doubt
about the Company's  ability to continue as a going  concern.  The  accompanying
condensed  consolidated  financial  statements  do not include  any  adjustments
relating to the  recoverability  and classification of asset carrying amounts or
the amount and  classification  of  liabilities  that  might  result  should the
Company be unable to continue as a going concern.

         Management's  plans with respect to these matters include,  among other
things, restructuring the Company's obligations, obtaining additional financing,
consummating the transactions contemplated by the asset purchase agreement dated
as of July 30, 1999 between the Company and Marker International GmbH and filing
a voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code.  Management is actively pursuing these plans as discussed below. There can
be no assurance  that the Company will be successful  in such  endeavors or that
the Company will not be forced into an involuntary bankruptcy in the near term.

         The results of operations  for the three months ended June 30, 1999 are
not  necessarily  indicative  of the  results for the full  fiscal  year.  It is
suggested  that these  condensed  consolidated  financial  statements be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's latest Annual Report on Form 10-K as filed with the SEC.

                                       8
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

Note 2.  Recent Events

         Purchase  Agreement with Market  International GmbH - On July 30, 1999,
Marker  International  (the "Company")  entered into an asset purchase agreement
(the "Purchase  Agreement") with Marker International GmbH ("Newco"),  providing
for the sale by the Company of  substantially  all of its assets  (including the
equity securities of its subsidiaries) to Newco. In exchange,  Newco will assume
certain  liabilities  of the Company and the Company  will  receive a 15% equity
interest in Newco. The remaining 85% equity interest in Newco will be held by CT
Sports Holding AG ("CT"),  a newly formed joint venture  between  Tecnica S.p.A.
and H.D. Cleven, the principal shareholder of the Volkl Group.

         Pursuant to the terms of the  Purchase  Agreement,  CT will  contribute
$15,000,000  in cash  (subject to  reduction  by  $1,025,501  as a result of the
consummation  of the sale to CT of the 66.66% equity  interest in Marker Canada,
Ltd.) to Newco in consideration for an 85% equity interest in Newco.  Newco is a
GmbH  organized  under the laws of  Switzerland  and is currently a wholly-owned
subsidiary of CT. In connection with the Purchase Agreement,  the Company and CT
will enter into an operating  agreement which, among other things,  will provide
that CT will be granted an option (the  "Option") to purchase the  Company's 15%
equity  interest in Newco at any time on or after the second  anniversary of the
consummation  date of the plan of  reorganization at the then fair market value,
subject to the  reduction of an amount equal to the sum of (x) all  unreimbursed
Advances  (as  defined  below) and  litigation  costs  incurred  by Newco  under
Sections  10.4(b)(i) and (ii) of the Purchase  Agreement,  together with accrued
interest thereon, plus (y) $775,000.

         Pursuant to the Purchase Agreement and so long as the Company is not in
default of any of its obligations under the Purchase  Agreement or the operating
agreement,  Newco will  advance to the  Company  from time to time an  aggregate
amount of up to $300,000 for each twelve month period following the closing (the
"Advances"); provided that the Advances will be used solely for certain expenses
as more  specifically  set forth in the Purchase  Agreement.  Newco will have no
obligations  to make any  Advances to the  Company  after the earlier of (a) the
second  anniversary of the closing,  (b) the Company's breach of its obligations
under Section 7.8(a) of the Purchase  Agreement and (c) the Company's ceasing to
be the holder of record of its 15% equity interest in Newco. The proceeds of the
exercise of the Option (after payment of any unpaid fees,  costs and taxes) will
then be distributed to the shareholders of the Company in liquidation.

         The Purchase  Agreement provides for the consummation of the sale to be
effected through a pre-negotiated  Chapter 11 bankruptcy proceeding and requires
the Company, DNR USA, Inc. ("DNR USA"), and DNR North America,  Inc. ("DNR North
America")  to  commence  the  bankruptcy  proceeding  by  August  20,  1999.  In
connection  therewith,  the  Company  is  preparing  to file  its  petition  for
reorganization,  obtain  approval of its  disclosure  statement and commence its
post-bankruptcy     solicitation    process.    The    Company    has    reached


                                       9
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

agreements-in-principle  regarding the restructuring of its debt with certain of
its creditors who are impaired under the plan of reorganization.

         Pursuant to the Purchase  Agreement,  the Company is obligated to pay a
$1.0 million break-up fee to Newco if the acquisition is not consummated and (i)
any  plan of  reorganization  other  than  the  plan  agreed  upon by  Newco  is
confirmed, or (ii) the Company consummates any sale of its stock or assets other
than as contemplated by the Purchase  Agreement upon terms more favorable to the
shareholders  of  the  Company  (an  "Alternative  Sale").  The  Company  is not
obligated to pay the break-up fee if its failure to consummate  the  acquisition
is due to (i) circumstances beyond its reasonable control, the Company is not in
material breach of the Purchase Agreement and the Company has not consummated or
agreed to consummate an Alternative  Sale, or (ii) a material breach by Newco of
the Purchase Agreement.  The Company is also required to reimburse Newco and its
affiliates for actual costs and expenses incurred by them in connection with the
acquisition  unless (i) the Purchase  Agreement is terminated in accordance with
its terms or as a result of a material  breach by Newco, or (ii) Newco elects to
abandon the acquisition.

         There are numerous  conditions to Newco's  obligation to consummate the
acquisition. Such conditions include, but are not limited to, (a) Newco entering
into  employment  agreements with key members of the Company's  management,  (b)
there not being any material adverse change in the business of the Company,  (c)
acceptable  pre-bankruptcy  agreements  with key  creditors,  (d) the bankruptcy
court's  approval  of the  proposed  sale and the  court's  confirmation  of the
Company's pre-negotiated bankruptcy plan of reorganization, and (e) the issuance
of consents or waivers by various third parties.  There can be no assurance that
the Company will be able to satisfy the conditions  precedent under the Purchase
Agreement.

         The closing of the sale is expected to be  consummated in the Company's
fiscal third quarter.  After the closing, the Company will not be engaged in the
conduct of business  and will operate for the sole  purpose of  liquidating  its
assets (including,  without limitation,  its equity interest in Newco). Pursuant
to the terms of the operating agreement, the Company is required to dissolve and
liquidate  all of its  assets no  earlier  than the  second  anniversary  of the
closing and no later than the fifth anniversary of the closing.

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

         Sale of Marker  Canada  Interest - On June 18,  1999,  CT, the Company,
Marker  Canada  and  Lapointe  Rosenstein,  as  escrow  agent,  entered  into  a
shareholders  agreement  (the  "Shareholders  Agreement")  pursuant  to which CT
purchased 200 class "A" shares of Marker Canada for a purchase price of Canadian

                                       10
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

Dollar ("Cdn") $1.5 million (approximately U.S. $1.0 million). The 200 class "A"
shares represent 66.66% of the outstanding  voting and  participating  shares of
Marker Canada.  The remaining 100 class "A" shares,  representing  33.33% of the
outstanding  and voting  shares,  are held by the  Company.  The purpose of this
transaction was to provide working capital to Marker Canada.

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

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

         As of June 19, 1999, the Company recorded its share of equity ownership
in Marker  Canada using the equity  method.  As of June 30, 1999,  the Company's
investment in Marker Canada was  approximately  $0. As of June 30, 1999,  Marker
Germany had an outstanding receivable balance of approximately $570,000 due from
Marker Canada.

         Marker  Germany and Marker Austria  Stockholder's  Deficit - As of June
30,  1999,  each  of  Marker  Germany  and  Marker  Austria,  on a  stand  alone
unconsolidated  basis,  had a net  stockholder's  deficit.  Under the applicable
foreign  laws  and  regulations,   in  order  to  avoid  involuntary  bankruptcy
proceedings,  these entities require additional  capital infusions.  The Company
and CT are in the process of negotiating debt  restructuring  arrangements  with
certain of the Company's  creditors.  If  successful,  these  negotiations  will
result in capital  infusions  which will  increase the  stockholder's  equity of
these entities. There can be no assurance that the Company will be able to reach
agreements  with its  creditors or be  successful  in  increasing  stockholder's
equity to a level sufficient to avoid such bankruptcy proceedings.

         Non-compliance with Debt Covenants / Defaults / Debt Restructuring - As
of June 30, 1999,  Marker Canada was not in compliance  with a minimum  tangible
net worth covenant under a $3.0 million Canadian Dollar (U.S. $2.0 million) line
of credit agreement with the Royal Bank of Canada ("Royal Bank").  Marker Canada
was also not in  compliance  with  margin  requirements  under  the same line of

                                       11
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

credit as of June 30, 1999.  On June 22, 1999,  the Royal Bank  notified  Marker
Canada of several terms and conditions that it requires Marker Canada to meet in
order for the Royal Bank to continue to provide financing to Marker Canada.  The
Company  guarantees  Marker Canada's  obligations under the Royal Bank facility.
Marker Canada is currently in the process of attempting to comply with the terms
and  conditions  that the Royal Bank has outlined in its letter and has signed a
definitive  agreement  with  Laurentian  Bank  of  Canada  in  order  to  obtain
additional  financing.  In the  event  that the  non-compliance  is not cured or
waived,  the Royal Bank may exercise its rights to demand payment of all amounts
due and/or  foreclose on Marker  Canada's assets which are pledged as collateral
under the agreement which could also lead to cross-defaults  under the Company's
other credit  arrangements.  There can be no assurance  that the Company will be
able to cure its  non-compliance  and reach a  satisfactory  agreement  with the
Royal Bank or that  Marker  Canada will be able to obtain  additional  financing
from Laurentian Bank.

         On March  31,  1999,  Marker  Germany's  DM 58.7  million  (U.S.  $32.3
million)  line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank
expired  (together,  the "German Banks").  HypoVereinsbank  and Deutsche Bank AG
have agreed to extend the credit line through  August 31, 1999 based on numerous
conditions.   Such  conditions  include,   but  are  not  limited  to,  (i)  the
consummation of the transactions  contemplated by the Purchase  Agreement,  (ii)
the Company and/or CT entering into  acceptable  pre-bankruptcy  agreements with
key  creditors,  and (iii)  product  purchase  guarantees by CT. There can be no
assurance  that the Company will be successful in meeting these  conditions.  In
the event that the Company is unable to meet these conditions,  the German Banks
could  terminate  the bank line  immediately  and force  Marker  Germany into an
involuntary  bankruptcy.  HypoVereinsbank and Deutsche Bank AG could also obtain
judgments  against the Company  and Marker USA for the  outstanding  obligations
since each of Marker USA and the Company has individually  guaranteed  repayment
of the outstanding obligations of Marker Germany to each of these banks.

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
outstanding  balance of $1.5 million as of June 30,  1999.  In the event that an
agreement is not  reached,  HypoVereinsbank  could  proceed to obtain a judgment
against the Company and force the Company into an involuntary bankruptcy.  There
can be no assurance  that the Company will reach a  satisfactory  agreement with
HypoVereinsbank.

         The Company did not make the required interest payments of $125,000 due
in October  1998 and  $125,000  due in April  1999 on the  Series A Bonds.  As a

                                       12
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

result,  the  bondholder  has the right to declare the Series A Bonds in default
and accelerate  the entire  outstanding  balance of $12.0 million,  plus accrued
interest  thereon,  as of June 30, 1999.  On March 26,  1999,  CT entered into a
restructuring  agreement,  as amended,  with the bondholder  which is contingent
upon  numerous  conditions.  Under the  agreement,  the  Series A Bonds  will be
reduced to an aggregate principal amount of $5,750,000 and payable in four equal
annual  installments  of $750,000 with  $2,750,000  payable  after 5 years.  The
agreement also requires  interest payments at 2% per annum during the first four
years,  and  thereafter  at a  variable  rate not  exceeding  the prime  rate on
commercial  loans in Japan plus 0.5%.  The agreement  also requires that certain
personal  guarantees of Eiichi  Isomura on Marker  Japan's debt  obligations  be
satisfied commencing on the sixth anniversary of the bankruptcy court confirming
a plan of reorganization. The agreement prohibits the bondholder from taking any
enforcement  action  against the Company or its  subsidiaries  or exercising any
other rights or remedies that the  bondholder  may have under the  documentation
relating to the Series A Bonds or applicable law. However,  if the conditions of
the agreement are not met, there can be no assurance  that the  bondholder  will
not  declare  the  Series A Bonds in  default  and  accelerate  the  outstanding
balance.

         The Company  notified  Manufacturers  and Traders  Trust  Company ("M&T
Bank")  and  KeyBank  National  Association  ("KeyBank"),  banks  with which the
Company has certain foreign  exchange  arrangements,  in May 1999 and June 1999,
respectively,  that the Company would be unable to utilize its foreign  exchange
contracts  as  originally  intended.  As a  result,  on May 25,  1999,  M&T Bank
terminated the foreign exchange netting agreement (the "Netting Agreement") with
the  Company  dated May 1,  1997.  Pursuant  to its  rights  under  the  Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of such  amount.  On July 26,  1999,  the Company  entered into a letter
agreement  with M&T Bank,  Newco and CT  whereby  M&T Bank  agreed,  subject  to
certain  conditions  (including,   but  not  limited  to,  consummation  of  the
transactions  contemplated  by the Purchase  Agreement by November 30, 1999), to
reduce their  obligation to $1.8 million payable in  installments  through 2004.
The Company entered into a Supplemental Agreement with M&T Bank, Newco and CT on
August 11, 1999 (the  "Supplemental  Agreement")  whereby M&T agreed not to take
any enforcement  action against the Company and/or its  subsidiaries or exercise
any rights or remedies  under the Netting  Agreement or any other  documentation
relating thereto. The Supplemental  Agreement is subject to numerous conditions,
including,  without  limitation,  bankruptcy  court  approval  of  the  plan  of
reorganization.  On August 13, 1999, the Company and KeyBank agreed to terminate
all  outstanding  foreign  exchange  contracts  for a  recognized  loss  of $1.3
million.  The Company is currently  negotiating  with KeyBank to restructure the
resulting  outstanding   obligation  of  $1.3  million.  In  the  event  that  a
restructuring  agreement  is not  executed,  KeyBank  could  proceed to obtain a
judgment against the Company.

     As of June 30, 1999,  the Company was not in  compliance  with several loan
covenants under the terms and conditions of the revolving credit agreement dated
October 30, 1998, as amended, among the Company, its U.S. subsidiaries and First
Security  Bank (the  "Revolving  Credit  Agreement").  On June 14,  1999,  First
Security Bank notified the Company

                                       13
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

that the  termination  of the  Netting  Agreement  with M&T Bank  constituted  a
default  under the Revolving  Credit  Facility.  Also, as of June 30, 1999,  the
Company's  outstanding  balance  on its line of credit  exceeded  the  available
borrowing base for a period greater than the ten day mandatory  repayment period
allowed under the Revolving  Credit  Agreement which also constitutes a default.
On July 30, 1999, the Company, its U.S. subsidiaries,  Marker Germany, Newco and
First  Security  Bank  entered  into a  Standstill  Agreement  (the  "Standstill
Agreement").  Under the  Standstill  Agreement,  First  Security  Bank agreed to
refrain from exercising any of its rights or remedies under the Revolving Credit
Agreement  and  other  related  loan   documentation  or  under  applicable  law
including, without limitation,  exercise any right of setoff, institute any suit
or foreclose on their  collateral  until the earlier of November 30, 1999 or the
date upon which any default under the Standstill Agreement occurs.  Events which
could occur and constitute defaults under the Standstill  Agreement include, but
are not limited to, the following:  (i) the  contemplated  bankruptcy  cases are
dismissed or converted to a case under Chapter 7 of the United States Code, (ii)
the Exclusive Distributorship Agreement by and among the Company, Marker USA and
Marker  Germany  is  rejected  or  otherwise  terminated  by any of the  parties
thereto, or such party materially breaches its obligations thereunder, and (iii)
if at any time the borrowing base (as defined in the Revolving Credit Agreement)
is less  that 80% of the  outstanding  obligations  under the  Revolving  Credit
Agreement.  In the event of a default under the Standstill Agreement,  the First
Security Bank can exercise its rights to demand payment of all amounts due under
the Revolving  Credit  Agreement,  foreclose on the  Company's  assets which are
pledged  as  collateral  under  the  agreement,  or force  the  Company  into an
involuntary bankruptcy.

         On January 14, 1999,  the  Company,  in  coordination  with Zions First
National Bank ("Zions")  disposed of its leased snowboard  equipment  through an
auction.  The net  proceeds of the  auction  were paid to Zions.  The  remaining
balance of $1.8 million was to be paid  according  to the original  terms of the
lease. On March 17, 1999, the Company signed an agreement with Zions whereby the
Company would make a lump sum payment of  $170,391.65  on or before July 1, 1999
as full settlement of the remaining lease obligation of  $1,703,916.45.  On June
30, 1999, the Company signed a revised  agreement with Zions whereby the Company
paid  $30,000 on June 30, 1999,  and must pay the  remaining  $140,391.65  on or
before  October 1,  1999.  In the event this  payment is not made,  the  Company
remains liable for the entire  $1,703,916.45  (less the $30,000 paid on June 30,
1999)  obligation.  There can be no  assurance  that the Company will be able to
satisfy its  obligation to pay the remaining  $140,391.65 to Zions by October 1,
1999.

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

                                       14
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

Discontinued Operations
-----------------------

         The Company is in the process of exiting the snowboard business through
dissolution  and sale of its  snowboard  subsidiaries  and related  assets.  The
components of net assets of  discontinued  operations  included in the condensed
consolidated  balance  sheets  at June 30,  1999 and  March  31,  1999,  were as
follows:
<TABLE>
<CAPTION>
                                                         June 30,             March 31,
                                                           1999                  1999
                                                        ------------          ------------
                                                                  (In Thousands)
<S>                                                     <C>                   <C>
         Accounts receivable, net                       $       103           $       171
         Inventories                                           --                    --
         Prepaid and other current assets                        12                     9
         Current portion of long-term debt                     --                    --
         Accounts payable                                        (8)                   (8)
         Other current liabilities                           (1,885)               (2,032)
                                                        ------------          ------------
                  Net current assets                    $    (1,778)          $    (1,860)
                                                        ============          ============

         Net property, plant and equipment              $      --            $       --
         Intangible assets, net                                --                    --
         Other assets                                          --                    --
         Long-term liabilities                                 --                    --
         Minority interest                                     --                    --
                                                        -----------           ----------
                  Net long-term assets                  $      --            $       --
                                                        ===========           ==========
</TABLE>


         As of June 30, 1999,  the  liabilities of the  discontinued  operations
exceeded  the  assets by  approximately  $1.8  million.  The net losses of these
operations  prior to September  1998 are included in the condensed  consolidated
statements of operations  under "loss (income) from  operations of  discontinued
snowboard   business."   Revenues   from  the   discontinued   operations   were
approximately $0 and $348,000 for the three months ended June 30, 1999 and 1998,
respectively.  The disposal estimates  represent  management's best estimates of
the potential loss. However, actual results could differ from those estimates.

Note 3.  Cash and Cash Equivalents

         Cash  and cash  equivalents  include  investments  in  certificates  of
deposit with original maturities of less than 30 days and restricted cash.

Note 4.  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,  including
inventories of the discontinued operations, are as follows:

                                       15
<PAGE>


                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


                                  June 30, 1999               March 31, 1999
                                 ---------------              --------------
                                                (In Thousands)
         Raw materials            $      196                  $      542
         Work in process               2,165                       1,821
         Finished goods               20,972                      16,389
                                  ----------                  ----------
                                  $   23,333                  $   18,752
                                  ==========                  ==========


Note 5.  Earnings per Share

         For the three  months  ended June 30,  1999,  options  and  warrants to
purchase  1,531,800  shares of common stock were not included in the computation
of diluted net income  (loss) per common share  because the  exercise  prices of
such options and warrants  were greater than the average  market price of common
shares or because the Company incurred a net loss.


Note 6.  Comprehensive Loss

         As of April 1,  1998,  the  Company  adopted  SFAS No.  130  "Reporting
Comprehensive  Income." The following table displays components of the Company's
comprehensive loss for the three month periods ended June 30, 1999 and 1998:

                                                             Three Months Ended
                                                                  June 30,
                                                           ---------------------
                                                               (In Thousands)
                                                              1999        1998
                                                           -------      -------
Net Loss                                                   $(4,846)     $(6,354)
Other Comprehensive Income (Loss) Items:
         Foreign Currency Translation Adjustments               94          180
                                                           -------      -------
Comprehensive Loss                                         $(4,752)     $(6,174)
                                                           =======      =======

Note 7.  Derivative Instruments and Hedging Activities

         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.

                                       16
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

From time to time the Company has entered into
derivatives that require speculative accounting treatment.

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

Foreign Exchange Contracts

         The  Company  enters  into  foreign  exchange  contracts  to reduce the
potential  impact  of  unfavorable   fluctuations  in  foreign  exchange  rates.
Contracts  that  are  intended  to  hedge  firm  commitments  are  deferred  and
recognized as part of the cost of the underlying transaction being hedged. Gains
and  losses on  foreign  exchange  contracts  that do not  qualify as hedges are
reported  currently in income.  During fiscal 1999, given the financial position
of the  Company,  the  Company  determined  that all gains and losses on foreign
exchange contracts should be reported in income.

         The Company and its subsidiaries have numerous intercompany receivables
and payables  and  commitments  denominated  in foreign  currencies  that create
exposure to  fluctuations in foreign  currency  rates.  The Company entered into
forward foreign exchange contracts to reduce the potential impact of unfavorable
fluctuations in foreign  exchange rates.  The Company had commitments to buy and
sell foreign currencies relating to foreign exchange contracts in order to hedge
against future currency fluctuations.

         The Company held forward  exchange  contracts to purchase  German Marks
with  Japanese  Yen and U.S.  Dollars.  The  contracts  mature at various  dates
through April 2000. The outstanding forward exchange purchase and sale contracts
at June 30, 1999, were as follows:

                                       17
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

<TABLE>
<CAPTION>
               Selling                 Buying              Contracted
                Amount                 Amount            Forward Rate        Unrealized Loss         Maturity
            --------------         --------------        -------------       ---------------         --------
         <S>                       <C>                 <C>                   <C>                <C>
         (Y)      677,810,000      DM     10,000,000   64.080 - 69.430       $  (383,630)       11/24/99-4/20/00
           $        9,000,000      DM     15,081,100   1.6565 - 1.6994       $(1,030,103)       9/16/99-12/29/99
</TABLE>

         The U.S.  Dollar  amount of the Yen  contracts  based upon the June 30,
1999 spot rate was approximately  $5.6 million.  Due to the Company's  financial
position,  the Company determined that it would be unable to utilize the foreign
exchange contracts as originally intended.  Accordingly, all contracts have been
accounted for as speculative and marked to market. This resulted in a cumulative
unrealized loss of $1.4 million as of June 30, 1999.

         The Company notified M&T Bank and KeyBank, banks with which the Company
has  certain  foreign  exchange  arrangements,   in  May  1999  and  June  1999,
respectively,  that the Company would be unable to utilize its foreign  exchange
contracts  as  originally  intended.  As a  result,  on May 25,  1999,  M&T Bank
terminated  the  Netting  Agreement.  Pursuant  to its rights  under the Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of such  amount.  On July 26,  1999,  the Company  entered into a letter
agreement  with M&T Bank,  Newco and CT  whereby  M&T Bank  agreed,  subject  to
certain  conditions  (including,   but  not  limited  to,  consummation  of  the
transactions  contemplated  by the Purchase  Agreement by November 30, 1999), to
reduce their  obligation to $1.8 million payable in  installments  through 2004.
The Company entered into the  Supplemental  Agreement  whereby M&T agreed not to
take any  enforcement  action  against the Company  and/or its  subsidiaries  or
exercise  any  rights or  remedies  under  the  Netting  Agreement  or any other
documentation  relating  thereto.  The  Supplemental  Agreement  is  subject  to
numerous conditions, including, without limitation, bankruptcy court approval of
the plan of  reorganization.  On August 13, 1999, the Company and KeyBank agreed
to terminate all outstanding foreign exchange contracts for a recognized loss of
$1.3 million.  The Company is currently  negotiating with KeyBank to restructure
the  resulting  outstanding  obligation  of $1.3  million.  In the event  that a
restructuring  agreement  is not  executed,  KeyBank  could  proceed to obtain a
judgment against the Company.

                                       18
<PAGE>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)


Note 8.  Segment Reporting

         The Company's  reportable  operating  segments are  strategic  business
units that offer  different  products and  services.  The  Company's  reportable
operating  segments  as of June 30,  1999,  are  consistent  with the  Company's
reportable  operating  segments  as of  March  31,  1999,  as  described  in the
Company's  Annual  Report  on Form  10-K  for the year  ended  March  31,  1999.
Intersegment  sales,   eliminated  in  consolidation,   are  not  material.  The
information  for  fiscal  year  1999 have been  restated  from the prior  year's
segment  presentation in order to conform to the fiscal year 2000  presentation.
The accounting policies of the Company's  reportable  operating segments are the
same as those described in Note 1. Summarized financial  information  concerning
the Company's reportable operating segments is shown in the following table. The
information  in the  following  table is  derived  directly  from the  operating
segments' internal financial information used for corporate management purposes.

         While the major portion of the Company's operations is derived from the
ski bindings and other hard goods  segment,  the Company also had a clothing and
other soft goods segment.  Effective April 1, 1999, the right to manufacture and
sell  Company's  clothing  and  other  softgoods  was  licensed  to Ski & Sports
Recreation  Company,  L.L.C.  ("SSRC") in return for royalty payments equal to a
percentage  of net sales  which  ranges  form 3% to 5%. In  connection  with the
license agreement, SSRC purchased certain assets of Marker Ltd. for $859,000, of
which  $450,000  was paid at  closing,  $204,500  was paid on August 2, 1999 and
$204,500 is due on August 31, 1999. With respect to certain  Olympic  inventory,
SSRC agreed to pay 60% to 75% of the net sales price to the Company as the sales
price  is  received.  Substantially  all  of  the  Company's  ski  bindings  are
manufactured by Marker Germany,  which also distributes bindings in Germany, and
sells  to  subsidiaries  of the  Company,  and to  independent  distributors  in
countries where the Company does not have a distribution  subsidiary.  No single
customer accounted for more than 10% of the Company's sales for these periods.

                                       19
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                   (Unaudited)

         Information  concerning  continuing  operations by reportable operating
segments for each of the three month periods  ended June 30, 1999 and 1998,  and
as of June 30, 1999 and March 31, 1999, is as follows:

                                              Three Months Ended June 30,
                                         ---------------------------------------
                                            1999                   1998
                                         -----------            -----------

                                                  (In Thousands)
Revenues from Unrelated Entities:
   Ski Bindings and Other Hard Goods     $     1,995            $     2,052
   Clothing and Other Soft Goods               1,075                    610
                                         -----------            -----------
                                         $     3,070            $     2,662
                                         ===========            ===========
Operating (Loss) Income:
   Ski Bindings and Other Hard Goods     $    (3,156)           $    (4,832)
   Clothing and Other Soft Goods                  10                     91
   Unallocated Corporate                        (711)                  (118)
                                         -----------            -----------
                                         $    (3,857)           $    (4,859)
                                         ===========            ===========

                                                         As Of
                                         ---------------------------------------
                                          June 30, 1999         March 31, 1999
                                         ---------------        --------------
                                                    (In Thousands)

Total Assets:
   Ski Bindings and Other Hard Goods     $    49,048            $    49,133
   Clothing and Other Soft Goods                 666                  2,631
   Unallocated Corporate                       3,542                  7,030
   Discontinued Operations                       115                    179
                                         -----------            -----------
                                         $    53,371            $    58,973
                                         ===========            ===========


                                       20
<PAGE>



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

         The  following  discussion  should  be read  in  conjunction  with  the
financial statements and notes thereto appearing elsewhere in this report.

General

         The Company  incurred net losses of $4.8 million for the quarter  ended
June 30, 1999,  and $48.0  million for the year ended March 31, 1999. As of June
30, 1999, the Company had a  shareholders'  deficit of $34.2 million (see Note 1
to the condensed consolidated  financial statements).  The Company currently has
inadequate working capital to fund operations and service repayment of debt. The
Company is not in compliance with certain financial  covenants and is in default
under  its  obligations  to  certain   creditors  (see  "Liquidity  and  Capital
Resources").  Accordingly,  there is substantial  doubt that the Company will be
able to  continue  as a going  concern.  Although  the  Company  is  seeking  to
alleviate its current fiscal problems by, among other things,  restructuring the
Company's   obligations,   obtaining  additional  financing,   consummating  the
transactions  contemplated  by the Purchase  Agreement with Newco,  and filing a
voluntary  petition for relief under Chapter 11 of the United States  Bankruptcy
Code,  there can be no  assurance  that the Company will be  successful  in such
endeavors or that the Company will not be forced into an involuntary bankruptcy.

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

                                       21
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         Purchase  Agreement with Market  International GmbH - On July 30, 1999,
the Company  entered into the Purchase  Agreement with Newco,  providing for the
sale by the Company of  substantially  all of its assets  (including  the equity
securities of its subsidiaries) to Newco. In exchange, Newco will assume certain
liabilities of the Company and the Company will receive a 15% equity interest in
Newco.  The remaining  85% equity  interest in Newco will be held by CT, a newly
formed joint venture  between  Tecnica  S.p.A.  and H.D.  Cleven,  the principal
shareholder of the Volkl Group.

         Pursuant to the terms of the  Purchase  Agreement,  CT will  contribute
$15,000,000  in cash  (subject to  reduction  by  $1,025,501  as a result of the
consummation  of the sale to CT of the 66.66% equity  interest in Marker Canada,
Ltd.) to Newco in consideration for an 85% equity interest in Newco.  Newco is a
GmbH  organized  under the laws of  Switzerland  and is currently a wholly-owned
subsidiary of CT. In connection with the Purchase Agreement,  the Company and CT
will enter into an operating  agreement which, among other things,  will provide
that CT will be granted an option (the  "Option") to purchase the  Company's 15%
equity  interest in Newco at any time on or after the second  anniversary of the
consummation  date of the plan of  reorganization at the then fair market value,
subject to the  reduction of an amount equal to the sum of (x) all  unreimbursed
Advances (as discussed in Note 2 to the  Financial  Statements)  and  litigation
costs  incurred  by Newco under  Sections  10.4(b)(i)  and (ii) of the  Purchase
Agreement,  together  with accrued  interest  thereon,  plus (y)  $775,000.  The
proceeds of the exercise of the Option (after payment of any unpaid fees,  costs
and  taxes)  will then be  distributed  to the  shareholders  of the  Company in
liquidation.

         The Purchase  Agreement provides for the consummation of the sale to be
effected through a pre-negotiated  Chapter 11 bankruptcy proceeding and requires
the  Company,  DNR  USA,  and DNR  North  America  to  commence  the  bankruptcy
proceeding by August 20, 1999. In connection therewith, the Company is preparing
to file its  petition  for  reorganization,  obtain  approval of its  disclosure
statement and commence its post-bankruptcy solicitation process. The Company has
reached  agreements-in-principle  regarding the  restructuring  of its debt with
certain of its creditors who are impaired under the plan of reorganization.

         Pursuant to the Purchase  Agreement,  the Company is obligated to pay a
$1.0 million break-up fee to Newco if the acquisition is not consummated and (i)
any  plan of  reorganization  other  than  the  plan  agreed  upon by  Newco  is
confirmed, or (ii) the Company consummates any sale of its stock or assets other
than as contemplated by the Purchase  Agreement upon terms more favorable to the
shareholders  of  the  Company  (an  "Alternative  Sale").  The  Company  is not
obligated to pay the break-up fee if its failure to consummate  the  acquisition
is due to (i) circumstances beyond its reasonable control, the Company is not in
material breach of the Purchase Agreement and the Company has not consummated or
has agreed to consummate an Alternative Sale, or (ii) a material breach by Newco
of the Purchase  Agreement.  The Company is also required to reimburse Newco and
its affiliates for actual costs and expenses incurred by them in connection with


                                       22
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

the  acquisition  unless (i) the Purchase  Agreement is terminated in accordance
with its terms or as a result of a  material  breach  by  Newco,  or (ii)  Newco
elects to abandon the acquisition.

         There are numerous  conditions to Newco's  obligation to consummate the
acquisition. Such conditions include, but are not limited to, (a) Newco entering
into  employment  agreements with key members of the Company's  management,  (b)
there not being any material adverse change in the business of the Company,  (c)
acceptable  pre-bankruptcy  agreements  with key  creditors,  (d) the bankruptcy
court's  approval  of the  proposed  sale and the  court's  confirmation  of the
Company's pre-negotiated bankruptcy plan of reorganization, and (e) the issuance
of consents or waivers by various third parties.  There can be no assurance that
the Company will be able to satisfy the conditions  precedent under the Purchase
Agreement.

         The closing of the sale is expected to be  consummated in the Company's
fiscal third quarter.  After the closing, the Company will not be engaged in the
conduct of business  and will operate for the sole  purpose of  liquidating  its
assets (including,  without limitation,  its equity interest in Newco). Pursuant
to the terms of the Operating Agreement, the Company is required to dissolve and
liquidate  all of its  assets no  earlier  than the  second  anniversary  of the
closing and no later than the fifth anniversary of the closing.

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

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

         CT holds its 200 shares in the name of and on the behalf of Newco,  the
shareholder   of  such  shares.   The   purchase   price  of  Cdn  $1.5  million
(approximately  U.S. $1.0  million)  will be deducted from the U.S.  $15,000,000
required to be contributed by CT to Newco pursuant to the Purchase Agreement. CT
has the option to require  the  Company to sell to CT all of the  Company's  100
shares of Marker Canada for a purchase price of Cdn $750,000 (approximately U.S.
$500,000),  less  all  amounts  then  payable  by  the  Company  or  any  of its
subsidiaries to Marker Canada, CT or any subsidiary or affiliate of CT..

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

                                       23
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         As of June 19, 1999, the Company recorded its share of equity ownership
in Marker  Canada using the equity  method.  As of June 30, 1999,  the Company's
investment in Marker Canada was  approximately  $0. As of June 30, 1999,  Marker
Germany had an outstanding receivable balance of approximately $570,000 due from
Marker Canada.

         Marker  Germany and Marker Austria  Stockholder's  Deficit - As of June
30,  1999,  each  of  Marker  Germany  and  Marker  Austria,  on a  stand  alone
unconsolidated  basis,  had a net  stockholder's  deficit.  Under the applicable
foreign  laws  and  regulations,   in  order  to  avoid  involuntary  bankruptcy
proceedings,  these entities require additional  capital infusions.  The Company
and CT are in the process of negotiating debt  restructuring  arrangements  with
certain of the Company's  creditors.  If  successful,  these  negotiations  will
result in capital  infusions  which will  increase the  stockholder's  equity of
these entities. There can be no assurance that the Company will be able to reach
agreements  with its  creditors or be  successful  in  increasing  stockholder's
equity to a level sufficient to avoid such bankruptcy proceedings.

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

         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, the
Company'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.

         For the three  months  ended  June 30,  1999,  average  exchange  rates
between  the Dollar and the Yen,  the Dollar and the Mark and the Dollar and the
Canadian  Dollar  resulted  in an  effective  increase  in the  value of the Yen
against the Dollar of  approximately  11.0%,  and a decrease in the value of the
Mark  against  the  Dollar  and  the  Canadian  Dollar  against  the  Dollar  of
approximately 3.1% and 1.8%, respectively,  compared to the corresponding period
of the prior year. Such currency  exchange  activity  resulted in  corresponding
fluctuations  in the value of the revenues and expenses of Marker Japan,  Marker
Germany and Marker Canada.

                                       24
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         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,  the Company's  consolidated assets and
liabilities  may vary as a result of  fluctuations in the exchange rates between
the  functional  currencies  of such foreign  subsidiaries  and the Dollar.  The
resulting  translation   adjustments  from  foreign  currency  fluctuations  are
recorded  in  shareholders'  equity  as  accumulated  other  comprehensive  loss
adjustments.

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

Results of Operations

Comparison of the three months ended June 30, 1999 with the three months ended
------------------------------------------------------------------------------
June 30, 1998  (continuing operations)
--------------------------------------
         Consistent with the seasonal  nature of the Company's  business and the
ski  industry  in  general,  the  Company  has  historically  recorded  a  small
percentage of its annual net sales during its first fiscal quarter.  These sales
amounts have  historically  represented less than 5% of the Company's annual net
sales and are primarily  attributable to close-out products sold late in the ski
season.  As such,  sales  results and gross profit  margins are not  necessarily
indicative of the results to be expected for the full fiscal year.

         Net  sales  for the  quarter  ended  June 30,  1999  increased  to $3.0
million,  compared to $2.7  million for the  corresponding  quarter of the prior
fiscal year. The increase in sales is primarily  attributable  to a bulk sale of
clothing and other soft goods  inventory for $0.8 million to SSRC,  the licensee
of Marker clothing and other soft goods.

         Gross profit for the quarter ended June 30, 1999 was $0.9  million,  or
29.0% of net sales,  compared to $1.1  million,  or 40.0% of net sales,  for the
corresponding  period of the prior fiscal year. The decrease in the gross profit
percentage  is primarily  due to the bulk sale of clothing  and other  softgoods
inventory for approximately book value to SSRC. The clothing and other softgoods
inventory had been written down to the bulk sales price as of March 31, 1999.

                                       25
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         Operating  expenses for the three months ended June 30, 1999  decreased
to $4.7  million,  compared  to $5.9  million  for the same  period of the prior
fiscal year. The decrease relates primarily to cost reductions and the licensing
of clothing and other  softgoods to SSRC resulting in lower  operating  expenses
which was partially offset by legal and advisory fees paid to assist the Company
in developing and implementing restructuring plans and negotiating with lenders.

         Interest  expense for the three months ended June 30, 1999 decreased to
$1.0 million, compared to $1.5 million for the corresponding period of the prior
fiscal year. This decrease was attributable to lower borrowing  requirements due
to the  liquidation  of  snowboard  related  assets and lower  inventory  levels
compared to the same period of the prior fiscal year.

         Other income  (loss) for the quarter  ended June 30, 1999  decreased to
$(48,000), compared to $238,000 for the corresponding period of the prior fiscal
year.  The  decrease  in other  income  (loss)  is due to the  write-off  of the
Company's  receivables from Marker Canada which was one of the conditions of the
sale of 66.66% of Marker Canada to CT.

Liquidity and Capital Resources

         The  Company  incurred  net losses of $4.8 for the  quarter  ended June
30,1999  and $48.0  million for the year ended  March 31,  1999.  As of June 30,
1999,  the Company had a  shareholders'  deficit of $34.2  million.  The Company
currently  has  inadequate  working  capital  to  fund  operations  and  service
repayment  of debt.  The Company is not in  compliance  with  certain  financial
covenants and is in default under its obligations to certain creditors (see Note
2 to the Financial Statements).

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

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

         Working  capital  decreased  from $(34.8)  million at March 31, 1999 to
$(39.2) million,  at June 30, 1999. The decrease in working capital is primarily
attributable to the Company's losses.

         At June 30, 1999, the Company's primary sources of liquidity  consisted
of $1.9 million in cash and cash  equivalents  and  available  borrowings  under


                                       26
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

lines of credit. At June 30, 1999, the Company had  approximately  $51.5 million
available   borrowings  under  lines  of  credit,   of  which  it  had  borrowed
approximately $51.5 million.

         As of June 30, 1999,  each of Marker Germany and Marker  Austria,  on a
stand alone  unconsolidated  basis, had a net stockholder's  deficit.  Under the
applicable  foreign  laws  and  regulations,   in  order  to  avoid  involuntary
bankruptcy proceedings, these entities require additional capital infusions. The
Company and CT are in the process of negotiating debt restructuring arrangements
with certain of the Company's creditors. If successful,  these negotiations will
result in capital  infusions  which will  increase the  stockholder's  equity of
these entities. There can be no assurance that the Company will be able to reach
agreements  with its  creditors or be  successful  in  increasing  stockholder's
equity to a level sufficient to avoid such bankruptcy proceedings.

         As of June 30, 1999, Marker Canada was not in compliance with a minimum
tangible net worth  covenant  under a $3.0 million  Canadian  Dollar (U.S.  $2.0
million) line of credit  agreement  with the Royal Bank.  Marker Canada was also
not in compliance with margin  requirements  under the same line of credit as of
June 30,  1999.  On June 22,  1999,  the Royal Bank  notified  Marker  Canada of
several terms and conditions that it requires Marker Canada to meet in order for
the Royal Bank to continue to provide  financing to Marker  Canada.  The Company
guarantees  Marker Canada's  obligations  under the Royal Bank facility.  Marker
Canada is  currently in the process of  attempting  to comply with the terms and
conditions  that the Royal  Bank has  outlined  in its  letter  and has signed a
definitive  agreement  with  Laurentian  Bank  of  Canada  in  order  to  obtain
additional  financing.  In the  event  that the  non-compliance  is not cured or
waived,  the Royal Bank may exercise its rights to demand payment of all amounts
due and/or  foreclose on Marker  Canada's assets which are pledged as collateral
under the agreement which could also lead to cross-defaults  under the Company's
other credit  arrangements.  There can be no assurance  that the Company will be
able to cure its  non-compliance  and reach a  satisfactory  agreement  with the
Royal Bank or that  Marker  Canada will be able to obtain  additional  financing
from Laurentian Bank.

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
outstanding  balance of $1.5 million as of June 30,  1999.  In the event that an
agreement is not  reached,  HypoVereinsbank  could  proceed to obtain a judgment
against the Company and force the Company into an involuntary bankruptcy.  There
can be no assurance  that the Company will reach a  satisfactory  agreement with
HypoVereinsbank.

                                       27
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         The Company did not make the required interest payments of $125,000 due
in October  1998 and  $125,000  due in April  1999 on the  Series A Bonds.  As a
result,  the  bondholder  has the right to declare the Series A Bonds in default
and accelerate  the entire  outstanding  balance of $12.0 million,  plus accrued
interest  thereon,  as of June 30, 1999.  On March 26,  1999,  CT entered into a
restructuring  agreement,  as amended,  with the bondholder  which is contingent
upon  numerous  conditions.  Under the  agreement,  the  Series A Bonds  will be
reduced to an aggregate principal amount of $5,750,000 and payable in four equal
annual  installments  of $750,000 with  $2,750,000  payable  after 5 years.  The
agreement also requires  interest payments at 2% per annum during the first four
years,  and  thereafter  at a  variable  rate not  exceeding  the prime  rate on
commercial  loans in Japan plus 0.5%.  The agreement  also requires that certain
personal  guarantees of Eiichi  Isomura on Marker  Japan's debt  obligations  be
satisfied commencing on the sixth anniversary of the bankruptcy court confirming
a plan of reorganization. The agreement prohibits the bondholder from taking any
enforcement  action  against the Company or its  subsidiaries  or exercising any
other rights or remedies that the  bondholder  may have under the  documentation
relating to the Series A Bonds or applicable law. However,  if the conditions of
the agreement are not met, there can be no assurance  that the  bondholder  will
not  declare  the  Series A Bonds in  default  and  accelerate  the  outstanding
balance.

         The Company notified M&T Bank and KeyBank, banks with which the Company
has  certain  foreign  exchange  arrangements,   in  May  1999  and  June  1999,
respectively,  that the Company would be unable to utilize its foreign  exchange
contracts  as  originally  intended.  As a  result,  on May 25,  1999,  M&T Bank
terminated  the  Netting  Agreement.  Pursuant  to its rights  under the Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of such  amount.  On July 26,  1999,  the Company  entered into a letter
agreement  with M&T Bank,  Newco and CT  whereby  M&T Bank  agreed,  subject  to
certain  conditions  (including,   but  not  limited  to,  consummation  of  the
transactions  contemplated  by the Purchase  Agreement by November 30, 1999), to
reduce their  obligation to $1.8 million payable in  installments  through 2004.
The Company entered into the  Supplemental  Agreement  whereby M&T agreed not to
take any  enforcement  action  against the Company  and/or its  subsidiaries  or
exercise  any  rights or  remedies  under  the  Netting  Agreement  or any other
documentation  relating  thereto.  The  Supplemental  Agreement  is  subject  to
numerous conditions, including, without limitation, bankruptcy court approval of
the plan of  reorganization.  On August 13, 1999, the Company and KeyBank agreed
to terminate all outstanding foreign exchange contracts for a recognized loss of
$1.3 million.  The Company is currently  negotiating with KeyBank to restructure
the  resulting  outstanding  obligation  of $1.3  million.  In the event  that a
restructuring  agreement  is not  executed,  KeyBank  could  proceed to obtain a
judgment  against the Company.


         As of June 30,  1999,  the Company was not in  compliance  with several
loan covenants under the terms and conditions of the Revolving Credit Agreement.
On June 14, 1999,  First Security Bank notified the Company that the termination
of the Netting Agreement with M&T Bank constituted a default under the Revolving
Credit Facility. Also, as of June 30, 1999, the Company's outstanding balance on


                                       28
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

its line of credit  exceeded the available  borrowing  base for a period greater
than the ten day mandatory  repayment  period allowed under the Revolving Credit
Agreement which also constitutes a default.  On July 30, 1999, the Company,  its
U.S.  subsidiaries,  Marker Germany,  Newco and First Security Bank entered into
the Standstill Agreement.  Under the Standstill  Agreement,  First Security Bank
agreed to  refrain  from  exercising  any of its  rights or  remedies  under the
Revolving  Credit  Agreement  and  other  related  loan  documentation  or under
applicable  law  including,  without  limitation,  exercise any right of setoff,
institute  any suit or  foreclose  on their  collateral  until  the  earlier  of
November  30,  1999 or the date upon  which  any  default  under the  Standstill
Agreement  occurs.  Events which could occur and  constitute  defaults under the
Standstill  Agreement  include,  but are not limited to, the following:  (i) the
contemplated bankruptcy cases are dismissed or converted to a case under Chapter
7 of the United  States  Bankruptcy  Code,  (ii) the  Exclusive  Distributorship
Agreement by and among the Company, Marker USA and Marker Germany is rejected or
otherwise  terminated by any of the parties  thereto,  or such party  materially
breaches its obligations thereunder, and (iii) if at any time the borrowing base
(as  defined  in  the  Revolving  Credit  Agreement)  is  less  that  80% of the
outstanding  obligations under the Revolving Credit Agreement. In the event of a
default under the Standstill Agreement, the First Security Bank can exercise its
rights  to  demand  payment  of all  amounts  due  under  the  Revolving  Credit
Agreement,  foreclose on the  Company's  assets which are pledged as  collateral
under the agreement, or force the Company into an involuntary bankruptcy.

         On March  31,  1999,  Marker  Germany's  DM 58.7  million  (U.S.  $32.3
million)  line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank
expired  (together,  the "German Banks").  HypoVereinsbank  and Deutsche Bank AG
have agreed to extend the credit line through  August 31, 1999 based on numerous
conditions.   Such  conditions  include,   but  are  not  limited  to,  (i)  the
consummation of the transactions  contemplated by the Purchase  Agreement,  (ii)
the Company and/or CT entering into  acceptable  pre-bankruptcy  agreements with
key  creditors,  and (iii)  product  purchase  guarantees by CT. There can be no
assurance that Marker Germany will be successful in meeting these conditions. In
the event that  Marker  Germany is unable to meet these  conditions,  the German
Banks could terminate the bank line immediately and force Marker Germany into an
involuntary  bankruptcy.  HypoVereinsbank and Deutsche Bank AG could also obtain
judgments  against the Company  and Marker USA for the  outstanding  obligations
since each of Marker USA and the Company has individually  guaranteed  repayment
of the outstanding obligations of Marker Germany to each of these banks.

         On January 14, 1999, the Company,  in coordination  with Zions disposed
of its leased snowboard  equipment  through an auction.  The net proceeds of the
auction were paid to Zions. The remaining balance of $1.8 million was to be paid
according to the  original  terms of the lease.  On March 17, 1999,  the Company
signed an agreement with Zions whereby the Company would make a lump sum payment
of  $170,391.65  on or before July 1, 1999 as full  settlement  of the remaining
lease  obligation  of  $1,703,916.45.  On June 30,  1999,  the Company  signed a
revised  agreement with Zions whereby the Company paid $30,000 on June 30, 1999,
and must pay the  remaining  $140,391.65  on or before  October 1, 1999.  In the
event  this  payment  is not made,  the  Company  remains  liable for the entire
$1,703,916.45 (less the $30,000 paid on June 30, 1999) obligation.  There can be
no assurance  that the Company will be able to satisfy its obligation to pay the
remaining $140,391.65 to Zions by October 1, 1999.

                                       29
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

Year 2000 Computer Issue

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

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

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

                                       30
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

         The Company is in the process of  developing  contingency  and business
continuity  plans  tailored  for  Year  2000-related  occurrences.  The  Company
believes its significant  hardware and software systems are Year 2000 compliant.
The Company  believes  that the most  reasonably  likely worst case  scenario of
failure by the Company or its suppliers to  adequately  resolve Year 2000 issues
would arise from a failure of its order entry and  accounts  receivable  system.
Such a failure would require the Company to resort to  "non-computerized"  means
to undertake such sales and  distribution  functions as placing  customer orders
and  ordering  inventory.  While the  Company  believes  that it is  equipped to
operate in such a "non-computerized"  mode to address such a failure,  there can
be no  assurance  that the  Company  would not, as a result of such or any other
unanticipated Year 2000 failure, suffer from lost revenues,  increased operating
costs, loss of customers or other business interruptions of a material nature.

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

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

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

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

         The Company held forward foreign exchange  contracts to purchase German
Marks with Japanese Yen and U.S. Dollars.  The contracts mature at various dates
through April 2000. The outstanding forward exchange purchase and sale contracts
at June 30, 1999, were as follows:

                                       31
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)
<TABLE>
<CAPTION>
               Selling                 Buying              Contracted
                Amount                 Amount            Forward Rate        Unrealized Loss         Maturity
            --------------         --------------        -------------       ---------------         --------
         <S>                       <C>                 <C>                   <C>                <C>
         (Y)      677,810,000      DM     10,000,000   64.080 - 69.430       $  (383,630)       11/24/99-4/20/00
           $        9,000,000      DM     15,081,100   1.6565 - 1.6994       $(1,030,103)       9/16/99-12/29/99
</TABLE>

         The U.S.  Dollar  amount of the Yen  contracts  based upon the June 30,
1999 spot rate was approximately  $5.6 million.  Due to the Company's  financial
position,  the Company determined that it would be unable to utilize the foreign
exchange contracts as originally intended.  Accordingly, all contracts have been
accounted for as speculative and marked to market. This resulted in a cumulative
unrealized loss of $1.4 million as of June 30, 1999.

         The Company notified M&T Bank and KeyBank, banks with which the Company
has  certain  foreign  exchange  arrangements,   in  May  1999  and  June  1999,
respectively,  that the Company would be unable to utilize its foreign  exchange
contracts  as  originally  intended.  As a  result,  on May 25,  1999,  M&T Bank
terminated  the  Netting  Agreement.  Pursuant  to its rights  under the Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of such  amount.  On July 26,  1999,  the Company  entered into a letter
agreement  with M&T Bank,  Newco and CT  whereby  M&T Bank  agreed,  subject  to
certain  conditions  (including,   but  not  limited  to,  consummation  of  the
transactions  contemplated  by the Purchase  Agreement by November 30, 1999), to
reduce their  obligation to $1.8 million payable in  installments  through 2004.
The Company entered into a Supplemental Agreement whereby M&T agreed not to take
any enforcement  action against the Company and/or its  subsidiaries or exercise
any rights or remedies  under the Netting  Agreement or any other  documentation
relating thereto. The Supplemental  Agreement is subject to numerous conditions,
including,  without  limitation,  bankruptcy  court  approval  of  the  plan  of
reorganization.  On August 13, 1999, the Company and KeyBank agreed to terminate
all  outstanding  foreign  exchange  contracts  for a  recognized  loss  of $1.3
million.  The Company is currently  negotiating  with KeyBank to restructure the
resulting  outstanding   obligation  of  $1.3  million.  In  the  event  that  a
restructuring  agreement  is not  executed,  KeyBank  could  proceed to obtain a
judgment against the Company.

         Interest Rate Risk - The Company's exposure to market risks for changes
in  interest  rates  is  tied  to  its  outstanding  borrowings.  The  Company's
borrowings consist of operating  line-of-credits with variable interest rates to
finance its  operations  and long-term debt with fixed interest rates to finance
its capital  expenditures.  Changes in the general  level of interest  rates can
affect  the  Company's   interest   expense  incurred  in  connection  with  its
interest-bearing  liabilities. The interest rates on the Company's variable rate
debt ranged from 2.0% to 10.00% on a total outstanding  balance of $53.2 million
as of June 30, 1999. The interest rates on the Company's  fixed rate debt ranged
from 2.1% to 9.7% on a total outstanding  balance of $5.0 million as of June 30,
1999.

                                       32
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS - (continued)

"Safe Harbor"  Statement Under the Private  Securities  Litigation Reform Act of
1995

         With the exception of historical  information  (information relating to
the Company's  financial condition and results of operations at historical dates
or  for  historical  periods),   the  matters  discussed  in  this  Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations  are
forward-looking statements that necessarily are based on certain assumptions and
are subject to certain risks and uncertainties. These forward-looking statements
are based on management's  expectations  as of the date hereof,  and the Company
does not undertake any  responsibility  to update any of these statements in the
future.  Actual future  performance and results could differ from that contained
in or suggested by these  forward-looking  statements as a result of the factors
set forth in this  Management's  Discussion and Analysis of Financial  Condition
and Results of  Operations  and the Business  Risks  described in the  Company's
Annual  Report on Form 10-K for the year ended March 31, 1999 and  elsewhere  in
the Company's filings with the Securities and Exchange Commission.


                                       33
<PAGE>

                    PART II - OTHER INFORMATION

                           PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.

         As of June 30, 1999, Marker Canada was not in compliance with a minimum
tangible net worth  covenant  under a $3.0 million  Canadian  Dollar (U.S.  $2.0
million) line of credit  agreement  with the Royal Bank.  Marker Canada was also
not in compliance with margin  requirements  under the same line of credit as of
June 30,  1999.  On June 22,  1999,  the Royal Bank  notified  Marker  Canada of
several terms and conditions that it requires Marker Canada to meet in order for
the Royal Bank to continue to provide  financing to Marker  Canada.  The Company
guarantees  Marker Canada's  obligations  under the Royal Bank facility.  Marker
Canada is  currently in the process of  attempting  to comply with the terms and
conditions  that the Royal  Bank has  outlined  in its  letter  and has signed a
definitive  agreement  with  Laurentian  Bank  of  Canada  in  order  to  obtain
additional  financing.  In the  event  that the  non-compliance  is not cured or
waived,  the Royal Bank may exercise its rights to demand payment of all amounts
due and/or  foreclose on Marker  Canada's assets which are pledged as collateral
under the agreement which could also lead to cross-defaults  under the Company's
other credit  arrangements.  There can be no assurance  that the Company will be
able to cure its  non-compliance  and reach a  satisfactory  agreement  with the
Royal Bank or that  Marker  Canada will be able to obtain  additional  financing
from Laurentian Bank.

         On April 15, 1999,  the Company did not make a required  principal  and
interest   payment  of  DM  900,000  (U.S.   $496,000)  on  a  note  payable  to
HypoVereinsbank,  New York.  On April 16,  1999,  HypoVereinsbank  notified  the
Company that the  nonpayment  of principal  and interest  constituted  a default
under the terms of the note and that the entire  balance of DM 6.4 million (U.S.
$3.5  million) was  immediately  due and payable.  As a result,  HypoVereinsbank
applied the  proceeds of a time deposit that was held as security by the bank in
the amount of $2.0 million against the outstanding  balance due on the note. The
Company  is  currently  negotiating  with  HypoVereinsbank  to  restructure  the
outstanding  balance of $1.5 million as of June 30,  1999.  In the event that an
agreement is not  reached,  HypoVereinsbank  could  proceed to obtain a judgment
against the Company and force the Company into an involuntary bankruptcy.  There
can be no assurance  that the Company will reach a  satisfactory  agreement with
HypoVereinsbank.

         The Company did not make the required interest payments of $125,000 due
in October  1998 and  $125,000  due in April  1999 on the  Series A Bonds.  As a
result,  the  bondholder  has the right to declare the Series A Bonds in default
and accelerate  the entire  outstanding  balance of $12.0 million,  plus accrued
interest  thereon,  as of June 30, 1999.  On March 26,  1999,  CT entered into a
restructuring  agreement,  as amended,  with the bondholder  which is contingent
upon  numerous  conditions.  Under the  agreement,  the  Series A Bonds  will be
reduced to an aggregate principal amount of $5,750,000 and payable in four equal
annual  installments  of $750,000 with  $2,750,000  payable  after 5 years.  The
agreement also requires  interest payments at 2% per annum during the first four
years,  and  thereafter  at a  variable  rate not  exceeding  the prime  rate on
commercial  loans in Japan plus 0.5%.  The agreement  also requires that certain
personal  guarantees of Eiichi  Isomura on Marker  Japan's debt  obligations  be
satisfied commencing on the sixth anniversary of the bankruptcy court confirming
a plan of reorganization. The agreement prohibits the bondholder from taking any


                                       34
<PAGE>
                    PART II - OTHER INFORMATION - (continued)

enforcement  action  against the Company or its  subsidiaries  or exercising any
other rights or remedies that the  bondholder  may have under the  documentation
relating to the Series A Bonds or applicable law. However,  if the conditions of
the agreement are not met, there can be no assurance  that the  bondholder  will
not  declare  the  Series A Bonds in  default  and  accelerate  the  outstanding
balance.

         The Company notified M&T Bank and KeyBank, banks with which the Company
has  certain  foreign  exchange  arrangements,   in  May  1999  and  June  1999,
respectively,  that the Company would be unable to utilize its foreign  exchange
contracts  as  originally  intended.  As a  result,  on May 25,  1999,  M&T Bank
terminated  the  Netting  Agreement.  Pursuant  to its rights  under the Netting
Agreement,  M&T Bank canceled and closed out all  outstanding  foreign  exchange
contracts  for a loss of $3.7 million as of May 21, 1999 and demanded  immediate
payment of such  amount.  On July 26,  1999,  the Company  entered into a letter
agreement  with M&T Bank,  Newco and CT  whereby  M&T Bank  agreed,  subject  to
certain  conditions  (including,   but  not  limited  to,  consummation  of  the
transactions  contemplated  by the Purchase  Agreement by November 30, 1999), to
reduce their  obligation to $1.8 million payable in  installments  through 2004.
The Company entered into a Supplemental Agreement whereby M&T agreed not to take
any enforcement  action against the Company and/or its  subsidiaries or exercise
any rights or remedies  under the Netting  Agreement or any other  documentation
relating thereto. The Supplemental  Agreement is subject to numerous conditions,
including,  without  limitation,  bankruptcy  court  approval  of  the  plan  of
reorganization.  On August 13, 1999, the Company and KeyBank agreed to terminate
all  outstanding  foreign  exchange  contracts  for a  recognized  loss  of $1.3
million.  The Company is currently  negotiating  with KeyBank to restructure the
resulting  outstanding   obligation  of  $1.3  million.  In  the  event  that  a
restructuring  agreement  is not  executed,  KeyBank  could  proceed to obtain a
judgment against the Company.

         As of June 30,  1999,  the Company was not in  compliance  with several
loan covenants under the terms and conditions of the Revolving Credit Agreement.
On June 14, 1999,  First Security Bank notified the Company that the termination
of the Netting Agreement with M&T Bank constituted a default under the Revolving
Credit Facility. Also, as of June 30, 1999, the Company's outstanding balance on
its line of credit  exceeded the available  borrowing  base for a period greater
than the ten day mandatory  repayment  period allowed under the Revolving Credit
Agreement which also constitutes a default.  On July 30, 1999, the Company,  its
U.S.  subsidiaries,  Marker Germany,  Newco and First Security Bank entered into
the Standstill Agreement.  Under the Standstill  Agreement,  First Security Bank
agreed to  refrain  from  exercising  any of its  rights or  remedies  under the
Revolving  Credit  Agreement  and  other  related  loan  documentation  or under
applicable  law  including,  without  limitation,  exercise any right of setoff,
institute  any suit or  foreclose  on their  collateral  until  the  earlier  of
November  30,  1999 or the date upon  which  any  default  under the  Standstill
Agreement  occurs.  Events which could occur and  constitute  defaults under the
Standstill  Agreement  include,  but are not limited to, the following:  (i) the
contemplated bankruptcy cases are dismissed or converted to a case under Chapter
7 of the United  States  Bankruptcy  Code,  (ii) the  Exclusive  Distributorship
Agreement by and among the Company, Marker USA and Marker Germany is rejected or
otherwise  terminated by any of the parties  thereto,  or such party  materially
breaches its obligations thereunder, and (iii) if at any time the borrowing base
(as  defined  in  the  Revolving  Credit  Agreement)  is  less  that  80% of the


                                       35
<PAGE>

                    PART II - OTHER INFORMATION - (continued)

outstanding  obligations under the Revolving Credit Agreement. In the event of a
default under the Standstill Agreement, the First Security Bank can exercise its
rights  to  demand  payment  of all  amounts  due  under  the  Revolving  Credit
Agreement,  foreclose on the  Company's  assets which are pledged as  collateral
under the agreement, or force the Company into an involuntary bankruptcy.

         On March  31,  1999,  Marker  Germany's  DM 58.7  million  (U.S.  $32.3
million)  line of credit  with  HypoVereinsbank,  Deutsche  Bank AG and BFG Bank
expired  (together,  the "German Banks").  HypoVereinsbank  and Deutsche Bank AG
have agreed to extend the credit line through  August 31, 1999 based on numerous
conditions.   Such  conditions  include,   but  are  not  limited  to,  (i)  the
consummation of the transactions  contemplated by the Purchase  Agreement,  (ii)
the Company and/or CT entering into  acceptable  pre-bankruptcy  agreements with
key  creditors,  and (iii)  product  purchase  guarantees by CT. There can be no
assurance that Marker Germany will be successful in meeting these conditions. In
the event that  Marker  Germany is unable to meet these  conditions,  the German
Banks could terminate the bank line immediately and force Marker Germany into an
involuntary  bankruptcy.  HypoVereinsbank and Deutsche Bank AG could also obtain
judgments  against the Company  and Marker USA for the  outstanding  obligations
since each of Marker USA and the Company has individually  guaranteed  repayment
of the outstanding obligations of Marker Germany to each of these banks.

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

Item 6.  Exhibits and Reports on Form 8-K.

         a)       Exhibits:
                  ---------

                  27       Financial Data Schedule. *

         b)       Reports filed on Form 8-K:
                  --------------------------

                  Current  Report on Form 8-K  filed on July 2,  1999  reporting
                  under  Item  2 the  execution  of the  Shareholders  Agreement
                  between CT Sports  Holding AG,  Marker  International,  Marker
                  Canada, Ltd. and Lapointe Rosenstein, as escrow agent.


                                       36
<PAGE>
                    PART II - OTHER INFORMATION - (continued)

                  Current  Report on Form 8-K filed on August 6, 1999  reporting
                  under Item 2 the execution of the Purchase  Agreement  between
                  Marker International and Marker International GmbH.

----------------------
*        Filed herewith.


                                       37
<PAGE>

                                   SIGNATURES



         Pursuant to the  requirements  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
                                                            --------------------
                                                                  Registrant

Dated:  August 16, 1999                  /s/  Peter C. Weaver
                                         --------------------
                                         Peter C. Weaver
                                         President and Chief Executive Officer

Dated:  August 16, 1999                  /s/  Kevin Hardy
                                         ----------------
                                         Kevin Hardy
                                         Chief Financial Officer

                                       38