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 September 30, 1998
                                       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 November 13, 1998
   ---------------------                        --------------------------------
Common Stock, $0.01 par value                               11,130,577

<PAGE>

                              MARKER INTERNATIONAL

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                         Part I - Financial Information

<S>      <C>                                                                              <C>
         Item 1.   Financial Statements                                                   Page
                                                                                          ----
                           Condensed Consolidated Balance Sheets
                                    As of September 30, 1998 and March 31, 1998            3

                           Condensed Consolidated Statements of Operations
                                    For the Three and Six Months Ended
                                    September 30, 1998 and 1997                            5

                           Condensed Consolidated Statements of Cash Flows
                                    For the Six Months Ended
                                    September 30, 1998 and 1997                            7

                           Notes to Condensed Consolidated Financial Statements            8


         Item 2.   Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                                      17


                           Part II - Other Information


         Item 2. Changes in Securities and Use of Proceeds                                26

         Item 3. Defaults Upon Senior Securities                                          26

         Item 6.   Exhibits and Reports on Form 8-K                                       28

         Signatures                                                                       29
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION

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

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

                                     ASSETS

                                                           September 30,    March 31,
                                                               1998           1998
                                                            ---------      ---------
<S>                                                         <C>            <C>      
CURRENT ASSETS:
     Cash and cash equivalents                              $   4,469      $   4,241
     Accounts receivable, net of allowance for doubtful
         accounts of $1,849 and $1,697, respectively           42,462         31,710
     Inventories                                               45,908         37,223
     Prepaid and other current assets                           3,543          4,440
                                                            ---------      ---------
              Total current assets                             96,382         77,614
                                                            ---------      ---------

PROPERTY, PLANT AND EQUIPMENT:
     Land                                                       1,050          1,050
     Building and improvements                                  8,339          7,581
     Machinery and equipment                                   19,976         21,222
     Furniture, fixtures and office equipment                   6,528          4,582
                                                            ---------      ---------
                                                               35,893         34,435
     Less accumulated depreciation and amortization           (19,184)       (16,733)
                                                            ---------      ---------
              Net property, plant and equipment                16,709         17,702
                                                            ---------      ---------

INTANGIBLE ASSETS, net of accumulated amortization               --            7,877
                                                            ---------      ---------

OTHER ASSETS                                                    1,215          1,927
                                                            ---------      ---------
                                                            $ 114,306      $ 105,120
                                                            =========      =========
</TABLE>



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

                                       3
<PAGE>

<TABLE>
<CAPTION>
                      MARKER INTERNATIONAL AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
                             (Dollars in Thousands)
                                   (Unaudited)

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

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

                                                                        September 30,    March 31,
                                                                            1998           1998
                                                                         ---------      ---------
<S>                                                                      <C>            <C>      
CURRENT LIABILITIES:
     Notes payable to banks                                              $  71,120      $  48,645
     Current maturities of long-term debt                                    3,689          3,512
     Current maturities of Series A Bonds, issued to a
         related party                                                        --            4,500
     Accounts payable                                                       15,163          6,381
     Other current liabilities                                              10,380          7,830
                                                                         ---------      ---------
              Total current liabilities                                    100,352         70,868
                                                                         ---------      ---------

LONG-TERM DEBT,  net of current maturities                                  14,079         14,898
                                                                         ---------      ---------

SERIES A BONDS, net of current maturities, issued to a related party        10,000          5,500
                                                                         ---------      ---------

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

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

SHAREHOLDERS' EQUITY (DEFICIT):
     Common stock                                                              111            111
     Additional paid-in capital                                             36,299         36,299
     Accumulated deficit                                                   (48,665)       (16,471)
     Cumulative foreign currency translation adjustments                      (870)        (7,532)
                                                                         ---------      ---------
              Total shareholders' equity (deficit)                         (13,125)        12,407
                                                                         ---------      ---------
                                                                         $ 114,306      $ 105,120
                                                                         =========      =========
</TABLE>



      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         For the Six Months
                                                             Ended September 30,         Ended September 30,
                                                           ----------------------      ----------------------
                                                             1998          1997          1998          1997
                                                           --------      --------      --------      --------
<S>                                                        <C>           <C>           <C>           <C>     
NET SALES                                                  $ 24,035      $ 24,681      $ 26,596      $ 25,128
COST OF SALES                                                15,830        16,359        17,408        16,339
                                                           --------      --------      --------      --------
GROSS PROFIT                                                  8,205         8,322         9,188         8,789
                                                           --------      --------      --------      --------

OPERATING EXPENSES:
     Selling                                                  3,024         2,978         5,409         5,477
     General and administrative                               3,753         2,301         6,189         4,505
     Research and development                                   650           761         1,258         1,399
     Warehousing and shipping                                   414           395           784           699
                                                           --------      --------      --------      --------
                                                              7,841         6,435        13,640        12,080
                                                           --------      --------      --------      --------

OPERATING INCOME (LOSS)                                         364         1,887        (4,452)       (3,291)
                                                           --------      --------      --------      --------
OTHER INCOME (EXPENSE):
     Interest expense                                        (1,743)       (1,312)       (3,226)       (2,570)
     Other, net                                               1,921          (358)        2,158           498
                                                           --------      --------      --------      --------
                                                                178        (1,670)       (1,068)       (2,072)
                                                           --------      --------      --------      --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
     TAXES                                                      542           217        (5,520)       (5,363)
(PROVISION) BENEFIT FOR INCOME TAXES                           (329)           70          (329)        2,074
                                                           --------      --------      --------      --------
INCOME (LOSS) FROM CONTINUING OPERATIONS                        213           287        (5,849)       (3,289)
                                                           --------      --------      --------      --------

DISCONTINUED OPERATIONS:
     Loss from operations of discontinued                                                            
        snowboard business, net of income taxes              (1,191)       (1,333)       (1,484)       (2,812)
     Loss on disposal of snowboard business                 (24,861)         --         (24,861)         --
                                                           --------      --------      --------      --------

LOSS FROM DISCONTINUED OPERATIONS                           (26,052)       (1,333)      (26,345)       (2,812)
                                                           --------      --------      --------      --------

NET LOSS                                                   $(25,839)     $ (1,046)     $(32,194)     $ (6,101)
                                                           ========      ========      ========      ========
</TABLE>



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

                                       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                   For the Six Months
                                                              Ended September 30,                    Ended September 30,
                                                       ----------------------------------      ----------------------------------
                                                            1998                1997                1998                1997
                                                       --------------      --------------      --------------      --------------
INCOME (LOSS) PER COMMON SHARE  (Both Basic and
     Diluted):
<S>                                                    <C>                 <C>                 <C>                 <C>            
     Income (loss) from continuing operations          $         0.02      $         0.03      $        (0.53)     $        (0.30)
                                                       --------------      --------------      --------------      --------------

     Loss from operations of discontinued 
          snowboard business                                    (0.11)              (0.12)              (0.13)              (0.25)
     Loss on disposal of snowboard business                     (2.23)            --                    (2.23)            --
                                                       --------------      --------------      --------------      --------------
     Loss from discontinued operations                          (2.34)              (0.12)              (2.36)              (0.25)
                                                       --------------      --------------      --------------      --------------

     Net loss                                          $        (2.32)     $        (0.09)     $        (2.89)     $        (0.55)
                                                       ==============      ==============      ==============      ==============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 
  (Both Basic and Diluted)                                 11,130,577          11,129,372          11,130,577          11,129,250
                                                       ==============      ==============      ==============      ==============
</TABLE>



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

                                       6
<PAGE>

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

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

                                                                            For the Six Months
                                                                            Ended September 30,
                                                                         ----------------------
                                                                           1998           1997
                                                                         --------      --------
<S>                                                                      <C>           <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                              $(32,194)     $ (6,101)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Minority interest                                                       --            (414)
     Loss (gain) on sale of property, plant and equipment                     725           (85)
     Depreciation and amortization                                          2,097         2,619
     Loss from write off of goodwill and intangibles                        8,487          --
     Change in assets and liabilities:
        Increase in accounts receivable, net                              (10,033)      (12,257)
        Increase in inventories                                            (6,559)      (14,889)
        Decrease (increase) in prepaid and other assets                     1,911        (3,516)
        Increase in accounts payable                                       11,794            91
        Increase in other current liabilities                               8,053           341
                                                                         --------      --------
NET CASH USED IN OPERATING ACTIVITIES                                     (15,719)      (34,211)
                                                                         --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property, plant and equipment                            (2,083)       (4,252)
     Proceeds from disposition of equipment                                  --           3,763
                                                                         --------      --------
NET CASH USED IN INVESTING ACTIVITIES                                      (2,083)         (489)
                                                                         --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings on notes payable to banks                              19,413        29,407
     Proceeds from issuance of preferred stock                              3,000          --
     Proceeds from issuance of common stock                                  --               6
     Proceeds from issuance of long-term debt                                 360         2,084
     Principal payments on long-term debt                                  (1,473)       (1,578)
                                                                         --------      --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                  21,300        29,919
                                                                         --------      --------

Effect of foreign exchange rate changes on cash and cash equivalents       (3,270)       (2,128)
                                                                         --------      --------

Net increase (decrease) in cash and cash equivalents                          228        (6,909)
Cash and cash equivalents at beginning of period                            4,241        13,532
                                                                         --------      --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $  4,469      $  6,623
                                                                         ========      ========
</TABLE>



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

                                       7
<PAGE>

                      MARKER INTERNATIONAL AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (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  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 has
continued to experience  financial  difficulties  through the second  quarter of
fiscal 1999 and thereafter. As discussed in Note 2, the Company has renegotiated
certain bank credit  agreements to increase the borrowing  limits and extend the
maturity to March 31, 1999.  However,  significant risks exist that these credit
agreements  will not provide  the Company  with the  necessary  working  capital
beyond  March 31,  1999 or that the  Company is unable to borrow  amounts  under
these  agreements  sufficient to fund  operations  during the remaining terms of
these agreements. As a result, there is a substantial risk that the Company will
not be able to continue as a going concern.

         The results of operations for the three and six months ended  September
30, 1998 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.

Note 2.  Recent Events

Credit Agreements
-----------------

         In August,  1998, the Company's  maximum borrowing limit on its line of
credit with a U.S. bank (the "U.S.  Credit Line") was increased by approximately
$4.0 million to $33.6 million.  On November 12, 1998, the Company entered into a
restated credit agreement with the U.S. bank which, among other things, extended


                                       8
<PAGE>

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

the maturity of the credit facility until March 31, 1999, increased the interest
rate there on to the bank's prime rate plus 0.5 percent and waived the Company's
non compliance with certain covenants.

         Under the  restated  credit  agreement,  the  Company  agreed to pledge
additional collateral,  including certain real property owned by the Company. In
addition,  the  Company  entered  into a lockbox  agreement  with the bank which
requires that all payments  from debtors be remitted to a lock box account.  The
bank will apply the amounts in the lockbox account to reduce amounts outstanding
under the credit  agreement.  The bank advances funds under the agreement to the
Company  on  a  daily  basis  in  accordance  with  the  borrowing  base  limits
established under the agreement.

         On August 1, 1998,  the Company's DM 80.0 million (U.S.  $47.9 million)
line of credit  agreement  with  HypoVereinsbank,  Deutsche Bank AG and BFG Bank
(together,  the "German banks") expired (the "German Credit Line").  As a result
of such expiration, the German banks had the right to declare all obligations of
the Company under the German Credit Line immediately due and payable.  On August
6, 1998,  the German  banks had  notified the Company that they would cancel the
German Credit Line and would not extend any further borrowings under such lines.
However,  after further  negotiations,  on August 19, 1998,  HypoVereinsbank and
Deutsche  Bank AG agreed in principle to extend their  existing  lines of credit
through March 31, 1999 and to provide a temporary  increase in available  credit
by DM 10 million  through  November 30, 1998.  On October 13, 1998,  the Company
entered into a final agreement with  HypoVereinsbank  providing a credit line of
DM 56.4 million  (U.S.  $33.7  million)  through  March 31, 1999. On November 5,
1998, the Company entered into a final agreement with Deutsche Bank AG providing
a credit line of DM 14.8 million  (U.S.  $8.9  million)  through March 31, 1999.
Marker Germany agreed to pledge  additional  collateral to  HypoVereinsbank  and
Deutsche  Bank AG consisting of certain  intellectual  property  rights owned by
Marker Germany.  BFG Bank has not agreed to extend its DM 5.0 million (U.S. $3.0
million)  line of credit beyond  November 30, 1998.  The Company is currently in
negotiations  with BFG Bank, in an effort to seek extension of this line through
March 31,  1999.  In the event  that the  banks do not  extend  the terms of the
Company's  U.S.  Credit Line and German  Credit Line to provide the Company with
necessary  working  capital  beyond March 31, 1999,  or the Company is unable to
borrow amounts under existing credit lines sufficient to fund operations,  there
is a  substantial  risk that the Company will not be able to continue as a going
concern.

         As  part  of  the  overall   restructuring  of  the  Company's  capital
structure,  the Company and its banks are continuing to discuss  alternatives to
mitigate the Company's  financial  difficulties and the reinstatement or renewal


                                       9
<PAGE>

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

of the  credit  lines  after  March 31,  1999.  There can be no  assurance  that
satisfactory  agreements  will be reached  between  the  Company  and current or
prospective providers of long term debt or equity financing.

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

         The Company is in the process of exiting the snowboard business through
dissolution  and sale of its  snowboard  subsidiaries  and  related  assets.  On
September 10, 1998,  the Board of Directors  authorized  the  disposition of the
entire snowboard operations of the Company. The manufacturing  operations ceased
on July 30, 1998. In September  1998,  the Company  entered into an agreement to
sell its 80% ownership interest in DNR Sportsystem Ltd. Under the agreement, the
Company will sell its shares of DNR Sportsystem  Ltd. for nominal  consideration
and  will  eliminate  all  outstanding  intercompany  balances.  All  conditions
precedent  to the  closing  of the sale  have  been  satisfied  and the  Company
anticipates that the closing will be consummated prior to November 25, 1998. The
Company is  currently  in the process of winding  down its  remaining  snowboard
distribution  operations and disposing of its snowboard  manufacturing  facility
and related equipment.

         The components of net assets of discontinued operations included in the
condensed  consolidated  balance sheets at September 30, and March 31, 1998 were
as follows:

                                                    September 30,     March 31,
                                                        1998            1998
                                                     ---------       ---------
                                                           (in thousands)
         Accounts receivable, net                       1,228           3,468
         Inventories                                    1,315           4,995
         Prepaid and other current assets                  27           1,611
         Current portion of long-term debt               (741)           (751)
         Accounts payable                                (237)         (2,276)
         Other current liabilities                     (4,214)         (1,650)
                                                     ---------       ---------
                  Net current assets                 $ (2,622)       $  5,397
                                                     ========        ========

         Net property, plant and equipment           $  2,862           4,538
         Intangible assets, net                           --            7,909
         Other assets                                     --              273
         Long-term liabilities                         (2,141)         (2,320)
         Minority interest                                --           (1,447)
                                                     ---------       ---------
                  Net long-term assets               $    721        $  8,953
                                                     =========       ========


                                       10
<PAGE>

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

         As  of  September  30,  1998,  the  liabilities  of  the   discontinued
operations exceeded the assets by approximately $1.9 million.  The net losses of
these  operations  prior  to  September  1998  are  included  in  the  condensed
consolidated   statements   of  operations   under  "loss  from   operations  of
discontinued  snowboard  operations." Revenues from the discontinued  operations
were  approximately  $2.2  million and $4.3  million for the three  months ended
September 30, 1998 and 1997, respectively, and $2.6 million and $6.2 million for
the six months ended  September 30, 1998 and 1997,  respectively.  The loss from
operations of  discontinued  snowboard  operations  for the three and six months
ended  September 30, 1997 is net of a benefit for income taxes of  approximately
$0.7  million  and  $1.6  million,  respectively.  The loss on  disposal  of the
snowboard  business  reflected  in  the  condensed  consolidated  statements  of
operations  includes  the  write-down  of  assets  and the  estimated  costs  of
disposing of these operations.  The significant components of this loss include,
the write-off of intangible  assets,  write-down of the Company's  investment in
DNR  Sportsystem  Ltd.,  realization  of foreign  currency  translation  losses,
write-down of inventories  and  receivables,  reserves for losses on terminating
noncancelable  operating  leases and write-down of property and  equipment.  The
disposal estimates  represent  management's best estimates of the potential loss
based upon  available  information.  However,  actual  results could differ from
those estimates.

Series B Preferred Stock
------------------------

         On August 24, 1998, the Company issued and sold 1,000,000 shares of its
Series B Preferred Stock, $0.01 par value (the "Series B Preferred Stock"),  for
an aggregate purchase price of $3,000,000 to Henry E. Tauber, the then President
of Marker International.

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

         At the  election of a majority of the holders of the Series B Preferred
Stock, the Company shall be required to redeem each year, beginning September 1,
2003, and on each September 1 thereafter, 25% of the total number of outstanding
shares at a price per share equal to $3.00 (subject to certain adjustments) plus


                                       11
<PAGE>

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

all accrued and unpaid cumulative dividends. Election of the holder to have such
stock redeemed shall be made by giving the Company  written notice not less than
45 days prior to the first redemption date and each redemption date thereafter.




                                       12

<PAGE>

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

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

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

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

Series A-2 Bonds
         Certificate #3                338,683             2,500         December 16, 1998         December 15, 1999
         Certificate #4                338,683             2,500         December 16, 1999         December 15, 2000
                                       -------             -----
Total Series A-2 Bonds                 677,366             5,000
                                       -------             -----

Series A-3 Bonds
         Certificate #1                135,473             1,000         December 16, 1999         December 16, 2001
                                       -------             -----
Total Series A Bonds                 1,354,733           $10,000
                                     =========           =======
</TABLE>

         The  holder  of the  Series A Bonds  elected,  under  the  terms of the
extension agreement,  to convert the bonds from United States dollar denominated
bonds to  Japanese  yen  denominated  bonds.  The  conversion  to  1,354,733,330
Japanese  Yen was made  effective on September  30, 1998.  This Yen  denominated
obligation  currently  remains  unhedged and any gains or losses  resulting from
fluctuations  in exchange  rates will be recorded in income.  As of November 16,
1998,  based upon current exchange rates, the Company would record an unrealized
loss of approximately $1.1 million.

Appointment of Peter C. Weaver
------------------------------

         In  October  1998,  Peter  Weaver  was  appointed  President  and Chief
Executive Officer of Marker International.  In this position, Mr. Weaver will be
responsible for the Company's world-wide operations. At the time of Mr. Weaver's
appointment,  Robert Sind,  the Company's  then acting Chief  Operating  Officer
since June 23, 1998, completed his service with the Company.


                                       13
<PAGE>

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

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

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. The
Company has granted a security  interest in a $2.0  million time deposit held in
the Company's  name at a United States branch of a German bank.  This deposit is
restricted for use as collateral on borrowings from such bank.

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 (in thousands):

                                   September 30, 1998            March 31, 1998
                                  --------------------           --------------
         Raw materials                 $    1,339                  $    1,411
         Work in process                    1,975                       2,306
         Finished goods                    42,594                      33,506
                                       ----------                  ----------
                                       $   45,908                  $   37,223
                                       ==========                  ==========


Note 5.  Earnings per Share

         For the three and six months  ended  September  30,  1998,  options and
warrants to purchase  893,300  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.


                                       14
<PAGE>

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

Note 6.  Recent Accounting Pronouncements

Comprehensive Income
--------------------

         As of April 1,  1998,  the  Company  adopted  SFAS No.  130  "Reporting
Comprehensive  Income." The following table displays components of the Company's
comprehensive  income for the three and six month  periods  ended  September 30,
1998 and 1997:

<TABLE>
<CAPTION>
                                                Three Months Ended           Six Months Ended
                                                   September 30,               September 30,
                                             -----------------------     -----------------------
                                                  (In Thousands)              (In Thousands)
                                                1998          1997          1998          1997
                                             ---------     ---------     ---------     ---------
<S>                                          <C>           <C>           <C>           <C>      
Net Loss                                     $(25,839)     $ (1,046)     $(32,194)     $ (6,101)
Other Comprehensive Income Items:
Foreign Currency Translation Adjustments          924           219         1,104          (475)
                                             ---------     ---------     ---------     ---------
Comprehensive Loss                           $(24,915)     $   (827)     $(31,090)     $ (6,576)
                                             =========     =========     =========     =========
</TABLE>

Segment Reporting
-----------------

         Effective  for fiscal year 1999,  the Company has adopted  SFAS No. 131
"Disclosures about Segments of an Enterprise and Related  Information." SFAS 131
establishes new standards for public companies to report information about their
operating segments, products and services, geographic areas and major customers.
SFAS 131,  though  effective  for the Company in fiscal 1999,  is not applied to
interim  financial  statements  in the  initial  year  of its  application.  The
adoption of SFAS 131 will have no effect on the Company's  consolidated  results
of operations, financial positions or cash flows.

Derivative Instruments and Hedging Activities
---------------------------------------------

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS No.
133  establishes  accounting and reporting  standards  requiring that derivative
instruments  be recorded on the  balance  sheet as either an asset or  liability
measured  at its fair market  value and that  changes in the  derivative's  fair
value be  recognized  currently in earnings  unless  specific  hedge  accounting
criteria are met.  SFAS No. 133 is effective  for fiscal years  beginning  after
June 15, 1999,  which in the case of the Company  shall be its fiscal year 2001.
The effect of SFAS No. 133 on the Company's consolidated financial statements is
uncertain.


                                       15
<PAGE>

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

         Derivative financial instruments held by the Company are generally used
to manage  well-defined  foreign exchange and interest rate risks which occur in
the normal  course of  business.  From time to time the Company has entered into
transactions   involving   derivative   instruments  that  require   speculative
accounting treatment. Forward foreign exchange contracts are used by the Company
to reduce the potential  impact of unfavorable  fluctuations in foreign exchange
rates.  The Company has off balance  sheet  commitments  to buy and sell foreign
currencies  relating to foreign  exchange  contracts  in order to hedge  against
future currency fluctuations.

         Gains and losses on foreign currency  contracts not intended to be used
to hedge operating  requirements are reported  currently in other income.  Gains
and losses on foreign currency  contracts  intended to meet firm commitments are
deferred and recognized as part of the cost of the underlying  transaction being
hedged.  As of September 30, 1998, the Company held foreign  currency  contracts
that were not being used to hedge operating  requirements.  In addition,  during
the period ended  September  30,  1998,  the Company  sold  contracts  that were
previously  designated as hedges.  For the six months ended  September 30, 1998,
the Company recorded aggregate net gains (including  realized and unrealized) of
approximately $2.0 million.

         Counterparties  to the foreign  exchange  contracts are typically major
international  financial  institutions.  The Company's theoretical risk in these
transactions is the cost of replacing,  at current market rates, these contracts
in the event of default by the  counterparty.  Management  believes  the risk of
incurring such losses is remote.


                                       16
<PAGE>

           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 has experienced  financial  difficulties through the second
quarter of fiscal 1999 and thereafter.  As a result of such difficulties,  there
is a  substantial  risk that the Company will not be able to continue as a going
concern. See "Liquidity and Capital Resources."

         Marker  International  is  a  designer,  developer,   manufacturer  and
marketer of alpine ski bindings in the United  States,  Europe and Asia.  Marker
International  ("Marker" or the  "Company") is a holding  company which operates
through its subsidiaries,  Marker  Deutschland GmbH ("Marker  Germany"),  Marker
USA,  Marker Japan Co.,  Ltd.  ("Marker  Japan"),  Marker  Austria GmbH ("Marker
Austria") and Marker Canada,  Ltd. ("Marker  Canada").  Substantially all of the
Company's  ski  bindings  are   manufactured  by  Marker  Germany,   which  also
distributes  bindings  in  Germany,  to  subsidiaries  of  the  Company,  and to
independent  distributors  in  countries  where  the  Company  does  not  have a
distribution subsidiary. Marker Ltd., also a subsidiary of the Company, designs,
distributes  and sells to retailers the Company's  clothing,  gloves and luggage
products for skiing and other recreational activities. The principal markets for
the Company's  clothing,  gloves and luggage products are North America,  Europe
and Asia.

         The Company is in the process of exiting the snowboard business through
dissolution and sale of its snowboard  subsidiaries and related assets.  On July
30,  1998,  the  Company  ceased  its  snowboard  manufacturing  operations.  On
September 10, 1998, the Board of Directors  authorized the sale of the snowboard
operations of the Company.  The Company  subsequently entered into a conditional
agreement to sell its 80% ownership  interest in DNR Sportsystem  Ltd. Under the
agreement,  the Company will sell its shares of DNR Sportsystem Ltd. for nominal
consideration  and will eliminate all  outstanding  intercompany  balances.  All
conditions  precedent  to the  closing of the sale have been  satisfied  and the
Company  anticipates that the closing will be consummated  prior to November 25,
1998.  The Company is  currently  in the process of winding  down its  remaining
snowboard distribution  operations and disposing of its snowboard  manufacturing
facility and related equipment. For the six months ended September 30, 1998, the
Company  recorded a loss from  discontinued  operations of  approximately  $26.3
million.  This loss is based upon management's  current estimates  regarding the
ultimate  realization of assets and settlement of liabilities on disposal of the
snowboard operations. However, actual results could differ from those estimates.


                                       17
<PAGE>

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

         The Company plans to  temporarily  cease binding  production at its ski
binding manufacturing  facility from November 16, 1998 through February 19, 1999
in order to decrease  inventory levels.  The Company's  manufacturing  facility,
which is located in Germany,  will receive financial  assistance from the German
government which will partially offset expenses that will be incurred during the
period that the production  assembly line is closed. In connection with a German
government  program,  the German  government will  compensate  employees who are
affected  by the  shutdown  of the  assembly  line  while the  Company  will pay
employee taxes and all other fixed costs associated with the factory during this
time period.

         Marker Germany receives payment primarily in German marks ("Marks") for
ski bindings sold. For subsidiaries of the Company  (principally  Marker USA and
Marker Japan), Marker Germany may allow payment for ski bindings sold to be made
in the functional currency of the subsidiary. Marker Germany or the distribution
subsidiary,  as  applicable,  routinely  enters into  forward  foreign  exchange
contracts with financial institutions in order to fix the cost of converting the
functional  currency to Marks.  Sales prices for the ski bindings offered to the
subsidiaries and ultimately the price the subsidiaries offer for the sale of the
ski bindings to their  customers  is based upon,  among other  things,  the rate
afforded  by the  forward  foreign  exchange  contracts  and market  conditions.
Accordingly,  the  relationship  of the  exchange  rate  between the  functional
currency of the  subsidiary  and the Mark has a direct impact on the cost of the
products sold by the  distribution  subsidiary.  As of September  30, 1998,  the
Company believes it has sufficient  forward foreign currency  contracts in place
to hedge  obligations  between  Marker USA and Marker  Germany for fiscal  1999.
However, at September 30, 1998, the Company did not have sufficient contracts in
place to hedge Marker Japan's and Marker Canada's obligations to Marker Germany.
Although such hedging  contracts were previously in place the Company decided to
sell those  contracts  and realize a net cash gain.  The Company is currently in
the process of securing new hedging  contracts.  There can be no assurance  that
the Company will be successful in securing  hedging  contracts in amounts and at
rates at least as favorable as the previous contracts. In addition, in the event
the Company  cannot secure such  contracts  the Company's  earnings will include
unrealized  gains or losses from  remeasuring the foreign  currency  obligations
each period at spot rates.

         Each of the Company's distribution  subsidiaries operates and maintains
its  accounting  records in the  functional  currency of the country in which it
operates.  In  accordance  with  United  States  generally  accepted  accounting
principles,   upon  consolidation  of  the  Company's   consolidated   financial
statements,  the  assets,  liabilities,  revenues  and  expenses  of each of the
Company's foreign  subsidiaries are translated at the appropriate  exchange rate
prevailing during the period.  Therefore, the Company's assets,  liabilities and
results of operations are subject to fluctuations  in forward  foreign  exchange


                                       18
<PAGE>

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

contract  rates  and  translation   effects  which  can  vary  as  a  result  of
fluctuations  in the exchange  rates between the  functional  currencies of such
foreign subsidiaries and the United States dollar ("Dollar").

         For the three months ended September 30, 1998,  average  exchange rates
between the Dollar and the Mark, the Dollar and the Japanese yen ("Yen") and the
Dollar and the Canadian dollar ("Canadian") resulted in an effective increase in
the value of the Mark against the Dollar of approximately  3%, and a decrease in
the value of the Yen against the Dollar and the  Canadian  against the Dollar of
approximately 19% and 9%, 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 Germany, Marker
Japan  and  Marker  Canada,   when   converted  to  Dollars,   compared  to  the
corresponding period of the prior fiscal year.

         For the six months ended  September 30, 1998,  average  exchange  rates
between the Dollar and the Mark,  the Dollar and the Yen, and the Dollar and the
Canadian, resulted in an effective decrease in the value of the Mark against the
Dollar,  the Yen  against  the Dollar  and the  Canadian  against  the Dollar of
approximately 1%, 16% and 7%, 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 Germany, Marker
Japan  and  Marker  Canada,   when   converted  to  Dollars,   compared  to  the
corresponding period of the prior fiscal year.

         The  Company's  business is seasonal  in nature.  Consistent  with this
seasonal  nature and the ski industry in general,  the Company has  historically
recorded a relatively  small percentage of its annual net sales during its first
fiscal quarter. The Company historically recorded a majority of its sales during
its second and third fiscal  quarters and to a lesser  extent  during its fourth
fiscal quarter.

Results of Operations

Comparison  of the three months ended  September  30, 1998 with the three months
--------------------------------------------------------------------------------
ended September 30, 1997 (continuing operations)
------------------------------------------------

         Net sales for the quarter ended  September 30, 1998  decreased to $24.0
million,  compared to $24.7 million for the  corresponding  quarter of the prior
fiscal year. The decrease in sales is primarily  attributable to late deliveries
of bindings from Germany to the Company's distribution subsidiaries.


                                       19
<PAGE>

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

         Gross profit for the quarter ended September 30, 1998 was $8.2 million,
or 34.1% of net sales,  compared to $8.3 million, or 33.7% of net sales, for the
corresponding  period of the prior  fiscal  year.  The slight  increase in gross
profit  percentages  resulted from increased ski binding margins offset by lower
clothing and soft goods margins. The decrease in clothing and soft goods margins
resulted from an increase in close-out  product  sales,  which  typically are at
lower margins.

         Operating  expenses  for the three  months  ended  September  30,  1998
increased to $7.8  million,  compared to $6.4 million for the same period of the
prior fiscal year.  The increase  relates  primarily to 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  September  30,  1998
increased to $1.7 million, compared to $1.3 million for the corresponding period
of the prior fiscal year. This increase was attributable to increased  borrowing
levels required to satisfy higher working capital  requirements due to losses in
the snowboard business.

         Other income for the quarter ended September 30, 1998 increased to $1.9
million, compared to expense of $0.3 million for the corresponding period of the
prior  fiscal year.  The  increase in other  income is  primarily  the result of
realized and unrealized net gains on forward foreign currency contracts.

Comparison of the six months ended September 30, 1998 with the six months ended 
------------------------------------------------------------------------------- 
September 30, 1997  (continuing operations)
-------------------------------------------

         Net sales for the six months  ended  September  30, 1998  increased  to
$26.6  million,  compared to $25.1 million for the  corresponding  period of the
prior  fiscal  year.  The  increase in sales is  primarily  attributable  to the
operations of a new distribution  subsidiary in Canada which began operations in
January 1998.

         Gross  profit  for the six months  ended  September  30,  1998 was $9.2
million,  or 34.5% of net sales compared to $8.8 million,  or 35.0% of net sales
for the  corresponding  period of the prior fiscal  year.  The decrease in gross
profit was the result of lower clothing and soft goods margins.  The decrease in
clothing and soft goods margins  resulted from an increase in close-out  product
sales, which typically are at lower margins.

         Operating  expenses  for  the  six  months  ended  September  30,  1998
increased to $13.6 million, compared to $12.1 million for the same period of the


                                       20
<PAGE>

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

prior fiscal year.  The increase  relates  primarily to legal and advisory  fees
paid to assist the Company in developing and  implementing  restructuring  plans
and negotiating with lenders.

         Interest  expense for the six months ended September 30, 1998 increased
to $3.2 million,  compared to $2.6 million for the  corresponding  period of the
prior fiscal year. This increase was attributable to increased  borrowing levels
required  to satisfy  higher  borrowing  levels  due to losses in the  snowboard
business.

         Other income for the quarter ended September 30, 1998 increased to $2.2
million,  compared  to $0.5  million for the  corresponding  period of the prior
fiscal year.  The  increase in other income is primarily  the result of realized
and unrealized net gains on forward foreign currency contracts.

Liquidity and Capital Resources

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

         At September  30, 1998,  the Company had a working  capital  deficit of
($4.0)  million,  compared to working capital of $6.7 million at March 31, 1998.
This decrease in working capital is due to higher borrowing levels due to losses
in the snowboard business.

         As of September 30, 1998, the Company had  approximately  $71.1 million
of outstanding  borrowings under its short-term credit  facilities.  All of such
borrowings are secured by inventory and receivables.

         In August,  1998, the Company's  maximum borrowing limit on its line of
credit with a U.S. bank (the "U.S.  Credit Line") was increased by approximately
$4.0 million to $33.6 million.  On November 12, 1998, the Company entered into a
restated credit agreement with the U.S. bank which, among other things, extended
the maturity of the credit facility until March 31, 1999, increased the interest
rate  thereon  to the  bank's  prime rate plus 0.5  percent  and waived  certain
covenants.

         Under the  restated  credit  agreement,  the  Company  agreed to pledge
additional collateral,  including certain real property owned by the Company. In


                                       21
<PAGE>

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

addition,  the  Company  entered  into a lockbox  agreement  with the bank which
requires  that all payments from debtors be remitted to a lockbox  account.  The
bank will apply the amounts in the lockbox account to reduce amounts outstanding
under the credit  agreement.  The bank advances funds under the agreement to the
Company  on  a  daily  basis  in  accordance  with  the  borrowing  base  limits
established in the agreement.

         On August 1, 1998,  the Company's DM 80.0 million (U.S.  $47.9 million)
line of credit  agreement  with  HypoVereinsbank,  Deutsche Bank AG and BFG Bank
(together,  the "German banks") expired (the "German Credit Line").  As a result
of such expiration, the German banks had the right to declare all obligations of
the Company under the German Credit Line immediately due and payable.  On August
6, 1998,  the German  banks had  notified the Company that they would cancel the
German Credit Line and would not extend any further borrowings under such lines.
However,  after further  negotiations,  on August 19, 1998,  HypoVereinsbank and
Deutsche  Bank AG agreed in principle to extend their  existing  lines of credit
through March 31, 1999 and to provide a temporary  increase in available  credit
by DM 10 million  through  November 30, 1998.  On October 13, 1998,  the Company
entered into a final agreement with  HypoVereinsbank  providing a credit line of
DM 56.4 million  (U.S.  $33.7  million)  through  March 31, 1999. On November 5,
1998, the Company entered into a final agreement with Deutsche Bank AG providing
a credit line of DM 14.8 million  (U.S.  $8.9  million)  through March 31, 1999.
Marker Germany agreed to pledge  additional  collateral to  HypoVereinsbank  and
Deutsche  Bank AG consisting of certain  intellectual  property  rights owned by
Marker Germany.  BFG Bank has not agreed to extend its DM 5.0 million (U.S. $3.0
million)  line of credit beyond  November 30, 1998.  The Company is currently in
negotiations  with BFG Bank, in an effort to seek extension of this line through
March 31,  1999.  In the event  that the  banks do not  extend  the terms of the
Company's  U.S.  Credit Line and German  Credit Line to provide the Company with
necessary  working  capital  beyond March 31, 1999,  or the Company is unable to
borrow amounts under existing credit lines sufficient to fund operations,  there
is a  substantial  risk that the Company will not be able to continue as a going
concern.

         As  part  of  the  overall   restructuring  of  the  Company's  capital
structure,  the Company and its banks are continuing to discuss  alternatives to
mitigate the Company's  financial  difficulties and the reinstatement or renewal
of the  credit  lines  after  March 31,  1999.  There can be no  assurance  that
satisfactory  agreements  will be reached  between  the  Company  and current or
prospective providers of long term debt or equity financing.

         On August 24, 1998,  the Company  issued and sold  1,000,000  shares of
Series B Preferred Stock for an aggregate  purchase price of $3,000,000 to Henry


                                       22
<PAGE>

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

E. Tauber, then President of Marker International. The proceeds were used by the
Company to repay a short-term loan with HypoVereinsbank. See "Item 2. Changes in
Securities and Use of Proceeds."

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 fourteen  months,  computer  systems and/or software used by many companies
may need to be  upgraded  to comply  with such  "Year  2000"  requirements.  The
Company  is  currently  assessing  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  preliminary  discussions  with its
information  systems  vendors,  that Year 2000  issues  will not have a material
adverse effect on the Company.

         The Company's  comprehensive 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 project
includes  a review of the Year 2000  compliance  efforts  of the  Company's  key
suppliers  and other  principal  business  partners  and,  as  appropriate,  the
development of joint business support and continuity plans for Year 2000 issues.

         The  Company  has  brought  a number  of its  systems  into  Year  2000
compliance,  and has  established a target date of July 15, 1999 for remediation
of all of those systems which are not yet compliant,  subject to additional Year
2000 testing and responsive actions. The Company's accounting system is expected
to be compliant by July 1999. The Company's  ability to meet the target dates is
dependent upon the timely provision of necessary  upgrades and  modifications by
its suppliers and contractors. 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.

         As  part  of its  Year  2000  initiative,  the  Company  is  evaluating
scenarios that may occur as a result of the century change and is in the process


                                       23
<PAGE>

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

of  developing  contingency  and  business  continuity  plans  tailored for Year
2000-related  occurrences.  The Company  believes  that some of its  significant
hardware  and  software  systems are already  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 costs
of  personnel  trained in this area,  the  ability  to locate  and  correct  all
affected  computer  code,  the timing and  success  of  remedial  efforts of the
Company's third party suppliers and similar uncertainties.

Other Matters

         In August 1998, the Nasdaq Stock Market,  Inc.  notified the Company of
its  failure  to meet  certain  minimum  financial  qualifications  required  to
maintain  its  listing  on  the  Nasdaq  National  Market  ("Nasdaq").  Nasdaq's
continued listing standards require,  among other things, net tangible assets of
$4.0 million and a minimum bid price of one dollar. As a result of the Company's
inability to meet Nasdaq's requirements, shares of the Company's stock ceased to
trade on Nasdaq at the close of  business  on October 28,  1998.  The  Company's
stock currently trades on the OTC Bulletin Board.

         In  October  1998,  Peter  Weaver  was  appointed  President  and Chief
Executive Officer of Marker International.  In this position, Mr. Weaver will be
responsible for the Company's world-wide operations. At the time of Mr. Weaver's
appointment,  Robert Sind,  the Company's  then acting Chief  Operating  Officer
since June 23, 1998, completed his service with the Company.

         The Company has entered into a five year employment agreement, dated as
of October 8, 1998,  with Mr.  Weaver  providing  for an annual  base  salary of


                                       24
<PAGE>

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

$300,000.  In addition,  on October 23, 1998,  Mr.  Weaver  received  options to
purchase 900,000 shares of common stock at an exercise price of $0.50 per share,
the per share fair  market  value of the  Company's  common  stock on that date.
Options to purchase 600,000 shares become  exercisable on April 23, 1999. Of the
remaining 300,000 options,  200,000 shares become  exercisable after one year of
service and 100,000 shares after two years of service.

"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
Report  on Form 10-K for the year  ended  March 31,  1998 and  elsewhere  in the
Company's filings with the Securities and Exchange Commission.


                                       25
<PAGE>

                           PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds.

         On August 24, 1998, the Company issued and sold 1,000,000 shares of its
newly created Series B Preferred Stock, $0.01 par value (the "Series B Preferred
Stock"),  for an aggregate  purchase price of $3,000,000 to Henry E. Tauber, the
then  President  of Marker  International.  Each share of the Series B Preferred
Stock is convertible,  at the option of the holder,  at any time, into shares of
common  stock of the  Company  at a rate of one and  one-third  shares of common
stock for each share of Series B Preferred Stock.  Allen & Company  Incorporated
delivered an oral report to the Company concluding that the terms of the sale of
the Series B Preferred  Stock were fair and  reasonable and no less favorable to
the Company than those that could have been  obtained  from an  unrelated  third
party.  The proceeds  were used by the Company to repay a  short-term  loan with
HypoVereinsbank.  The  foregoing  shares  were sold  without  registration  in a
transaction  qualifying for exemption from registration afforded by Section 4(2)
of the Securities Act of 1933, as amended.

Item 3.  Defaults Upon Senior Securities.

         On August 1, 1998,  the Company's DM 80.0 million (U.S.  $47.9 million)
line of credit  agreement  with  HypoVereinsbank,  Deutsche Bank AG and BFG Bank
(together,  the "German banks") expired (the "German Credit Line").  As a result
of such expiration, the German banks had the right to declare all obligations of
the Company under the German Credit Line immediately due and payable.  On August
6, 1998,  the German  banks had  notified the Company that they would cancel the
German Credit Line and would not extend any further borrowings under such lines.
However,  after further  negotiations,  on August 19, 1998,  HypoVereinsbank and
Deutsche  Bank AG agreed in principle to extend their  existing  lines of credit
through March 31, 1999 and to provide a temporary  increase in available  credit
by DM 10 million  through  November 30, 1998.  On October 13, 1998,  the Company
entered into a final agreement with  HypoVereinsbank  providing a credit line of
DM 56.4 million  (U.S.  $33.7  million)  through  March 31, 1999. On November 5,
1998, the Company entered into a final agreement with Deutsche Bank AG providing
a credit line of DM 14.8 million  (U.S.  $8.9  million)  through March 31, 1999.
Marker Germany agreed to pledge  additional  collateral to  HypoVereinsbank  and
Deutsche  Bank AG consisting of certain  intellectual  property  rights owned by
Marker Germany.  BFG Bank has not agreed to extend its DM 5.0 million (U.S. $3.0
million)  line of credit beyond  November 30, 1998.  The Company is currently in
negotiations  with BFG Bank, in an effort to seek extension of this line through
March 31,  1999.  In the event  that the  banks do not  extend  the terms of the
Company's  U.S.  Credit Line and German  Credit Line to provide the Company with
necessary  working  capital  beyond March 31, 1999,  or the Company is unable to


                                       26
<PAGE>

                           PART II - OTHER INFORMATION

borrow amounts under existing credit lines sufficient to fund operations,  there
is a  substantial  risk that the Company will not be able to continue as a going
concern.  See "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations -- Liquidity and Capital Resources."




                                       27
<PAGE>

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

         a)       Exhibits:
                  ---------
                  10.28    Revolving  Credit  Agreement  dated October 30, 1998,
                           between Marker International and First Security Bank,
                           N.A. (without exhibits).*

                  27       Financial Data Schedule. *

         b)       Reports filed on Form 8-K:

                  Current  Report  on  Form  8-K  filed  on  September  3,  1998
                  reporting under Item 5 events which occurred in August 1998.

                  Current Report on Form 8-K/A filed on September 11, 1998 which
                  amended  and  restated in its  entirety  the Form 8-K filed on
                  September 3, 1998.
----------------------
* Filed herewith.


                                       28
<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:  November 20, 1998                /s/  Peter C. Weaver
                                         --------------------
                                         Peter C. Weaver
                                         President and Chief Executive Officer

Dated:  November 20, 1998                /s/  Kevin Hardy
                                         ----------------
                                         Kevin Hardy
                                         Chief Financial Officer


                                       29