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 December 31, 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 incorporation or            (I.R.S. Employer 
              organization)                                 Identification No.)

                              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 February 18, 1999
         ---------------------                 --------------------------------
     Common Stock, $0.01 par value                       11,140,577


<PAGE>



                              MARKER INTERNATIONAL

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                         Part I - Financial Information

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

                           Condensed Consolidated Statements of Operations
                                    For the Three and Nine Months Ended
                                    December 31, 1998 and 1997                                             5

                           Condensed Consolidated Statements of Cash Flows
                                    For the Nine Months Ended
                                    December 31, 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                                                      16


                                            Part II - Other Information


         Item 6.   Exhibits and Reports on Form 8-K                                                       25

         Signatures                                                                                       26

</TABLE>

                                       2
<PAGE>



                         PART I - FINANCIAL INFORMATION

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

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                     ASSETS

                                                                                 December 31,           March 31,
                                                                                    1998                  1998
                                                                                 -----------           ----------

<S>                                                                            <C>                   <C>       
CURRENT ASSETS:
     Cash and cash equivalents                                                 $    5,746            $    4,241
     Accounts receivable, net of allowance for doubtful
         accounts of $2,146 and $1,697, respectively                               40,506                31,710
     Inventories                                                                   32,381                37,223
     Prepaid and other current assets                                               1,378                 4,440
                                                                               ----------            ----------
              Total current assets                                                 80,011                77,614
                                                                               ----------            ----------

PROPERTY, PLANT AND EQUIPMENT:
     Land                                                                             386                 1,050
     Building and improvements                                                      5,969                 7,581
     Machinery and equipment                                                       21,046                21,222
     Furniture, fixtures and office equipment                                       5,579                 4,582
                                                                               ----------            ----------
                                                                                   32,980                34,435
     Less accumulated depreciation and amortization                               (19,909)              (16,733)
                                                                               ----------            ----------
              Net property, plant and equipment                                    13,071                17,702
                                                                               ----------            ----------

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

OTHER ASSETS                                                                        1,277                 1,927
                                                                               ----------            ----------
                                                                               $   94,359            $  105,120
                                                                               ==========            ==========
</TABLE>



      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)

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

                 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

                                                                                December 31,            March 31,
                                                                                    1998                  1998
                                                                                -----------            ----------
<S>                                                                            <C>                    <C>       
CURRENT LIABILITIES:
     Notes payable to banks                                                    $   70,384             $   48,645
     Current maturities of long-term debt                                           2,635                  3,512
     Current maturities of Series A Bonds, issued to a
         related party                                                              5,373                  4,500
     Accounts payable                                                               5,911                  6,381
     Other current liabilities                                                      7,314                  7,830
                                                                               ----------             ----------
              Total current liabilities                                            91,617                 70,868
                                                                               ----------             ----------

LONG-TERM DEBT,  net of current maturities                                          8,092                 14,898
                                                                               ----------             ----------

SERIES A BONDS, net of current maturities, issued to a related party                6,567                  5,500
                                                                               ----------             ----------

OTHER LONG-TERM LIABILITIES                                                         1,881                      -
                                                                                ---------             ----------

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

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

SHAREHOLDERS' (DEFICIT) EQUITY:
     Common stock                                                                     111                    111
     Additional paid-in capital                                                    36,299                 36,299
     Accumulated deficit                                                          (51,875)               (16,471)
     Cumulative foreign currency translation adjustments                           (1,333)                (7,532)
                                                                               -----------            -----------
              Total shareholders' (deficit) equity                                (16,798)                12,407
                                                                               -----------            -----------
                                                                               $   94,359             $  105,120
                                                                               ===========            ===========
</TABLE>


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

                                       4
<PAGE>


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

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                             For the Three Months               For the Nine Months
                                                             Ended December 31,                 Ended December 31,
                                                             --------------------------        -------------------------
                                                               1998              1997             1998              1997
                                                            ---------         ---------        ---------          -------
<S>                                                         <C>               <C>              <C>               <C>     
NET SALES                                                   $ 30,302          $ 33,376         $ 56,898          $ 58,504
COST OF SALES                                                 22,090            22,173           39,498            38,512
                                                            --------          --------         --------          --------
GROSS PROFIT                                                   8,212            11,203           17,400            19,992
                                                            --------          --------         --------          --------

OPERATING EXPENSES:
     Selling                                                   4,841             4,092           10,250             9,569
     General and administrative                                3,901             1,825           10,090             6,330
     Research and development                                    578               540            1,836             1,939
     Warehousing and shipping                                    735               530            1,519             1,229
                                                            --------          --------         --------          --------
                                                              10,055             6,987           23,695            19,067
                                                            --------          --------         --------          --------

OPERATING (LOSS) INCOME                                       (1,843)            4,216           (6,295)              925
                                                            --------          --------         --------          --------
OTHER (EXPENSE) INCOME:
     Interest expense                                         (2,106)           (1,517)          (5,332)           (4,087)
     Other, net                                                  593               156            2,751               654
                                                            --------          --------         --------          --------
                                                              (1,513)           (1,361)          (2,581)           (3,433)
                                                            --------          --------         --------          --------
(LOSS) INCOME FROM CONTINUING 
    OPERATIONS BEFORE INCOME TAXES                            (3,356)            2,855           (8,876)           (2,508)
(PROVISION) BENEFIT FOR INCOME TAXES                            (522)           (1,028)            (851)            1,046
                                                            --------          --------         --------          =-------
(LOSS) INCOME FROM CONTINUING OPERATIONS
                                                              (3,878)            1,827           (9,727)           (1,462)
                                                            --------          --------         --------          --------

DISCONTINUED OPERATIONS:
     Income (Loss) from operations of 
         discontinued snowboard business, net of                   -             1,111           (1,484)           (1,701)
         income taxes
      Income (Loss) on disposal of snowboard                                                                  
         business                                                769                 -          (24,092)                -
                                                             -------          --------         --------          --------

INCOME (LOSS) FROM DISCONTINUED OPERATIONS                                                                    
                                                                 769           1,111            (25,576)           (1,701)
                                                            --------          --------         --------         ---------

NET (LOSS) INCOME                                           $ (3,109)         $  2,938         $(35,303)         $ (3,163)
                                                            ========          ========         ========         =========
</TABLE>

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


                                       5
<PAGE>

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

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

                                                             For the Three Months               For the Nine Months
                                                             Ended December 31,                 Ended December 31,
                                                            ---------------------=-----        ------------------------
                                                               1998             1997              1998            1997
                                                            ---------         ---------        ---------        --------

<S>                                                         <C>               <C>              <C>               <C>      
(LOSS) INCOME PER COMMON SHARE  (Both Basic and
     Diluted):

     (Loss) income from continuing operations             $  (0.35)         $   0.16         $  (0.87)         $  (0.13)
                                                          -----------       ----------       ----------        ----------

     Income (loss) from operations of discontinued
     snowboard business                                          -              0.10            (0.13)            (0.15)
     Income (loss) on disposal of snowboard                                                                   
         business                                             0.07                 -            (2.17)                -   
                                                          -----------       ----------       ----------        ----------
                                                                                                         
     Income (loss) from discontinued operations               0.07              0.10            (2.30)            (0.15)
                                                          -----------       ----------       ----------        ----------

     Net (loss) income                                    $  (0.28)         $   0.26         $  (3.17)         $  (0.28)
                                                          ===========       ==========       ==========        ==========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (both basic
     and diluted)                                       11,140,577        11,130,577       11,134,504        11,129,694
                                                       ===========       ===========       ==========        ==========
</TABLE>

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


                                       6
<PAGE>


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

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                      For the Nine Months
                                                                                      Ended December 31,
                                                                                      --------------------------
                                                                                          1998             1997
                                                                                         ------           ------
<S>                                                                                   <C>               <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                           $ (35,303)        $(3,163)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Minority interest                                                                        -             (65)
     Gain (loss) on sale of property, plant and equipment                                   680             (89)
     Depreciation and amortization                                                        2,344           3,841

                                                                                                
     Loss on write-off of goodwill and intangibles                                        8,487               -
     Change in assets and liabilities:
        Increase in accounts receivable, net                                             (7,575)        (20,646)
        Decrease (increase) in inventories                                                6,481          (7,042)
        Decrease (increase) in prepaid and other assets                                   3,983          (3,767)
        Increase in accounts payable                                                        690             605
        Decrease in other current liabilities                                            (1,567)         (2,735)
        Increase in other liabilities                                                     2,154               -
                                                                                       --------         -------
NET CASH USED IN OPERATING ACTIVITIES                                                   (19,626)        (33,061)
                                                                                       --------         -------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property, plant and equipment                                          (2,856)         (5,694)
     Proceeds from disposition of equipment                                               4,434           3,768
                                                                                       --------         -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                       1,578         (1,926)
                                                                                       --------         -------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings on notes payable to banks                                            18,456          27,729
     Proceeds from issuance of preferred stock                                            3,000               -
     Proceeds from issuance of common stock                                                   -               6
     Proceeds from issuance of long-term debt                                               710           3,173
     Principal payments on long-term debt                                                (9,376)         (3,072)
                                                                                       --------         -------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                12,790          27,836
                                                                                       --------         -------

Effect of foreign exchange rate changes on cash and cash equivalents                      6,763         (1,161)
                                                                                       --------         -------
Net increase (decrease) in cash and cash equivalents                                      1,505         (8,312)
Cash and cash equivalents at beginning of period                                          4,241          13,532
                                                                                       --------         -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $   5,746        $  5,220
                                                                                       ========        ========  
</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 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 third  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 of loans made pursuant to such  agreements.  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 will be 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 nine months ended December
31, 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 thereon 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 U.S. bank, which
requires  that all payments  from debtors be remitted to a lockbox  account from
which  amounts  are  applied  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 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 of DM 10.0  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. On November 25,
1998,  BFG Bank agreed to extend its DM 5.0 million (U.S.  $3.0 million) line of
credit  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 lines 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 of January  31,  1999,  the  Company  was not in  compliance  with a
minimum  tangible net worth covenant under a $3.0 million  Canadian Dollar (U.S.
$2.0) line of credit agreement with the Royal Bank of Canada.  The Company is in
discussions  with the bank to  obtain a waiver  from the bank for the  period of
time of its non-compliance  with the covenant.  In the event that non-compliance
is not cured or waived,  the bank may exercise  its rights to demand  payment of
all amounts  outstanding  under the credit  agreement  and/or  foreclose  on the
Company's assets which are pledged as collateral under the agreement which could
also lead to cross-defaults  under the Company's other credit  arrangements.  In
that event,  there can be no assurance that the Company will 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


                                       9
<PAGE>


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



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.

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.  On December 14, 1998, the Company
sold its 80% interest in DNR Sportsystem Ltd. for nominal  consideration and the
elimination of all outstanding  intercompany balances. On December 31, 1998, the
Company  sold  the  building  and  land  that  housed  the  Company's  snowboard
manufacturing  operations  for $3.1  million.  On January 14,  1999,  the leased
snowboard manufacturing equipment was disposed of through an auction and the net
proceeds of the auction  were paid to the  equipment  lessor.  The Company has a
remaining  obligation  of $2.2  million to the lessor,  which is included in the
liabilities of continuing operations. The Company is currently in the process of
winding down its remaining snowboard distribution operations.

         The components of net assets  (liabilities) of discontinued  operations
included in the condensed  consolidated  balance sheets at December 31, 1998 and
March 31, 1998 were as follows:
<TABLE>
<CAPTION>
                                                     December 31,             March 31,
                                                         1998                   1998
                                                       --------               --------
                                                               (in thousands)
<S>                                                     <C>                  <C>     
         Accounts receivable, net                       $ 1,146              $  3,468
         Inventories                                      1,094                 4,995
         Prepaid and other current assets                   309                 1,611
         Current portion of long-term debt               (1,016)                 (751)
         Accounts payable                                (1,827)               (2,276)
         Other current liabilities                       (1,501)               (1,650)
                                                       --------             ---------
                  Net current (liabilities) assets      $(1,795)             $  5,397
                                                       ========             =========

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


                                       10
<PAGE>


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

         As of December 31, 1998, 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 "income (loss) from  operations of  discontinued
snowboard   business."   Revenues   from  the   discontinued   operations   were
approximately  $1.3 million and $6.0 million for the three months ended December
31, 1998 and 1997, respectively, and $3.9 million and $12.1 million for the nine
months ended  December 31, 1998 and 1997,  respectively.  The income (loss) from
operations of  discontinued  snowboard  operations for the three and nine months
ended December 31, 1997, net of income taxes,  were  approximately  $1.1 million
and $(1.7) million, respectively. The income (loss) on disposal of the snowboard
business  reflected  in the  condensed  consolidated  statements  of  operations
includes  the  write-down  of assets  and the  estimated  and  revised  costs of
disposing of these operations.  For the nine months ended December 31, 1998, the
significant components of this loss include: the write-off of intangible assets,
the  write-down  of the  Company's  investment  in  DNR  Sportsystem  Ltd.,  the
realization  of  foreign  currency   translation   losses,   the  write-down  of
inventories and  receivables,  reserves for losses on terminating  noncancelable
operating  leases and the  write-down of property and  equipment.  For the three
months  ended  December 31,  1998,  the income on the disposal of the  snowboard
business  relates  to actual  disposition  results  being  more  favorable  than
previous  estimates  and  revisions to  management's  estimate of future  losses
attributable to the disposal of the snowboard  business.  The disposal estimates
represent  management's  current 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.


                                       11
<PAGE>


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

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

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>
                                          December 31, 1998
                                          -----------------
                                    Bonds Payable    Bonds Payable       Bond Payment Date         Bond Payment Date
                                    Japanese Yen      U.S. Dollars       Prior to Extension           As Extended
                                    ------------      ------------       ------------------           -----------
                                     (In 000's)        (In 000's)
<S>                                    <C>                <C>              <C>                       <C>    
Series A-1 Bonds
         Certificate #5                270,947           $ 2,388           October 1, 1998           October 1, 1999
         Certificate #6                270,947             2,388           October 1, 1999           October 1, 2000
                                       -------             -----
Total Series A-1 Bonds                 541,894             4,776
                                       -------             -----

Series A-2 Bonds
         Certificate #3                338,683             2,985           December 16, 1998         December 15, 1999
         Certificate #4                338,683             2,985           December 16, 1999         December 15, 2000
                                       -------             -----
Total Series A-2 Bonds                 677,366             5,970
                                       -------             -----

Series A-3 Bonds
         Certificate #1                135,473             1,194           December 16, 1999         December 16, 2001
                                       -------             -----
Total Series A Bonds                 1,354,733           $11,940
                                     =========           =======
</TABLE>

         The  holder  of the  Series A Bonds  elected,  under  the  terms of the
extension agreement,  to convert the bonds from United States dollar denominated
bonds to Japanese yen denominated  bonds. The conversion of the Bonds from $10.0
million  U.S.  Dollars  to  1,354,733,330  Japanese  Yen was made  effective  on
September 30, 1998. This Yen denominated  obligation  currently remains unhedged
and any  gains or losses  resulting  from  fluctuations  in  exchange  rates are
recorded in income.  As of December 31, 1998, the Company recorded an unrealized
loss of approximately $1.9 million.


                                       12
<PAGE>


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

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 is
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
$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):
                                    December 31, 1998             March 31, 1998
                                   -------------------            --------------
         Raw materials                $      231                  $    1,411
         Work in process                   2,932                       2,306
         Finished goods                   29,218                      33,506
                                      ----------                  ----------
                                      $   32,381                  $   37,223
                                      ==========                  ==========

                                       13
<PAGE>



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

Note 5.  Earnings per Share

         For the three and nine months  ended  December  31,  1998,  options and
warrants to purchase  1,556,800  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.  Net income (loss)
has been adjusted for accrued  dividends on Series B Preferred Stock of $101,250
for the three and nine months ended December 31, 1998.

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 nine month  periods  ended  December 31,
1998 and 1997:
<TABLE>
<CAPTION>
                                                             Three Months Ended                  Nine Months Ended
                                                                December 31,                       December 31,
                                                            ------------------------          -------------------------
                                                                  (In Thousands)                     (In Thousands)
                                                               1998             1997              1998             1997
                                                               ----             ----              ----             ----
<S>                                                         <C>                <C>            <C>                <C>     
Net (loss) income                                           $(3,109)           $2,938         $(35,303)          $(3,163)

Other Comprehensive Income Items:

Foreign Currency Translation Adjustments                       (463)             (495)             380              (970)
                                                            -------            ------         --------           -------
Comprehensive Loss                                          $(3,572)           $2,443         $(34,923)          $(4,133)
                                                            =======            ======         ========           =======
</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.

                                       14
<PAGE>


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



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.

         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 December 31, 1998,  the Company held foreign  currency  contracts
that were not being used to hedge operating  requirements.  In addition,  during
the nine month period ended  December 31, 1998,  the Company sold contracts that
were  previously  designated as hedges.  For the nine months ended  December 31,
1998,  the  Company  recorded  aggregate  net  gains  (including   realized  and
unrealized) of approximately $2.8 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.

                                       15
<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 third
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
September 10, 1998,  the Board of Directors  authorized  the  disposition of the
entire  snowboard  operations of the Company.  On December 14, 1998, the Company
sold its 80%  interest  in DNR  Sportsystem  for nominal  consideration  and the
elimination of all outstanding  intercompany balances. On December 31, 1998, the
Company  sold  the  building  and  land  that  housed  the  Company's  snowboard
manufacturing  operations  for $3.1  million.  On January 14,  1999,  the leased
snowboard manufacturing equipment was disposed of through an auction and the net
proceeds of the auction  were paid to the  equipment  lessor.  The Company has a
remaining  obligation  of $2.2  million to the lessor,  which is included in the
liabilities of continuing operations. The Company is currently in the process of
winding  down its  remaining  snowboard  distribution  operations.  For the nine
months ended  December 31, 1998, the Company  recorded a loss from  discontinued
operations of approximately $25.6 million.  This loss is based upon management's
current estimates regarding the ultimate  realization from the sale of remaining
assets  and  the   settlement  of  liabilities  on  disposal  of  the  snowboard
operations. However, actual results could differ from those estimates.

                                       16
<PAGE>

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

         The Company  temporarily  ceased binding  production at its ski binding
manufacturing  facility as of November  16,  1998.  The Company  plans to resume
binding  production  in April  1999.  This  temporary  production  shutdown  was
scheduled in order to decrease  inventory  levels.  The Company's  manufacturing
facility,  which is located in Germany,  receives financial  assistance from the
German  government which partially offsets expenses that are incurred during the
period that the production  assembly line is closed. In connection with a German
government program, the German government compensates employees who are affected
by the shutdown of the assembly line while the Company pays  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 December 31,  1998,  the
Company believes it had sufficient  forward foreign currency  contracts in place
to hedge obligations between Marker USA and Marker Germany; and Marker Japan and
Marker Germany through fiscal 2000.  However,  at December 31, 1998, the Company
did not have sufficient  contracts in place to hedge 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

                                       17
<PAGE>


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

results of operations are subject to fluctuations  in forward  foreign  exchange
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  December 31, 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  and the Yen  against  the dollar of
approximately  5.2% and  4.9%,  respectively,  and a  decrease  in the  Canadian
against the Dollar of approximately 9.5%,  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 nine months ended  December 31, 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 increase in the value of the Mark against the
Dollar of  approximately  1.1%, and a decrease in the Yen against the Dollar and
the Canadian  against the Dollar of approximately  8.8% and 7.8%,  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  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 records 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  December 31, 1998 with the three months
ended December 31, 1997 (continuing operations)
--------------------------------------------------------------------------------

         Net sales from continuing operations for the quarter ended December 31,
1998 decreased to $30.3 million, compared to $33.4 million for the corresponding
quarter  of  the  prior  fiscal  year.   The  decrease  in  sales  is  primarily
attributable  to  unseasonably  warm  weather  in the United  States  during the
quarter and to lower sales to independent distributors in Asia and Europe due to
an overall market decline.


                                       18
<PAGE>


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

         Gross profit for the quarter ended  December 31, 1998 was $8.2 million,
or 27.1% of net sales, compared to $11.2 million, or 33.5% of net sales, for the
corresponding  period of the prior  fiscal  year.  The  decrease in gross profit
percentage  primarily  resulted  from  unabsorbed  fixed  costs  related  to the
temporary  shutdown  of the  production  line and to an  increase  in  inventory
reserves for closeout inventory.

         Operating  expenses  for the  three  months  ended  December  31,  1998
increased to $10.1 million,  compared to $7.0 million for the same period of the
prior fiscal year. The increase  resulted  primarily from (i) legal and advisory
fees paid to assist the Company in  developing  and  implementing  restructuring
plans  and  negotiating  with  lenders,  and  (ii)  to the  operations  of a new
distribution subsidiary in Canada which began operations in January 1998.

         Interest expense for the three months ended December 31, 1998 increased
to $2.1 million,  compared to $1.5 million for the  corresponding  period of the
prior fiscal year. This increase was attributable to increased average borrowing
levels required to satisfy higher working capital  requirements due to losses in
the snowboard  business and a higher  interest  rate applied on the U.S.  credit
line.

         Other income for the three months ended  December 31, 1998 increased to
$0.6 million, compared to $0.2 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 nine months ended December 31, 1998 with the nine months ended
December 31, 1997  (continuing operations)
--------------------------------------------------------------------------------

         Net sales from continuing operations for the nine months ended December
31,  1998  decreased  to  $56.9  million,  compared  to  $58.5  million  for the
corresponding  period  of the  prior  fiscal  year.  The  decrease  in  sales is
primarily  attributable to unseasonably warm weather in the United States during
the fall and early  winter  months and lower sales to  distributors  in Asia and
Europe due to an overall market decline.

         Gross  profit for the nine  months  ended  December  31, 1998 was $17.4
million,  or 30.6% of net  sales,  compared  to $20.0  million,  or 34.2% of net
sales,  for the  corresponding  period of the prior fiscal year. The decrease in
gross profit resulted  primarily from (i) unabsorbed  fixed costs related to the
temporary shutdown of the production line, (ii) increased inventory reserves for
closeout  inventory,  and (iii)  lower  margins  from the sale of the  Company's
clothing  and soft goods  products.  The  decrease  in  clothing  and soft goods
margins  resulted from an increase in close-out  product sales,  which typically
are at lower margins.


                                       19
<PAGE>

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

         Operating  expenses  for  the  nine  months  ended  December  31,  1998
increased to $23.7 million, compared to $19.1 million for the same period of the
prior fiscal year. The increase  resulted  primarily from (i) legal and advisory
fees paid to assist the Company in  developing  and  implementing  restructuring
plans  and  negotiating  with  lenders,   and  (ii)  the  operations  of  a  new
distribution subsidiary in Canada which began operations in January 1998.

         Interest  expense for the nine months ended December 31, 1998 increased
to $5.3 million,  compared to $4.1 million for the  corresponding  period of the
prior fiscal year. This increase was attributable to increased average borrowing
levels required to satisfy higher working capital  requirements due to losses in
the snowboard  business and a higher  interest  rate applied on the U.S.  credit
line.

         Other income for the nine months ended  December 31, 1998  increased to
$2.8 million, compared to $0.7 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,
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.

         At December  31,  1998,  the Company had a working  capital  deficit of
$11.6  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 December 31, 1998, the Company had approximately $70.4 million of
outstanding  borrowings  under its  short-term  credit  facilities.  All of such
borrowings are secured by inventory and receivables.

         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 the  Company's  non-compliance
with certain covenants.


                                       20
<PAGE>

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

         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 U.S. bank, which
requires  that all payments  from debtors be remitted to a lockbox  account from
which  amounts  are  applied  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 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 of DM 10.0  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. On November 25,
1998,  BFG Bank agreed to extend its DM 5.0 million (U.S.  $3.0 million) line of
credit  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 lines 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 of January  31,  1999,  the  Company  was not in  compliance  with a
minimum  tangible net worth covenant under a $3.0 million  Canadian Dollar (U.S.
$2.0) line of credit agreement with the Royal Bank of Canada.  The Company is in
discussions  with the bank to  obtain a waiver  from the bank for the  period of
time of its non-compliance  with the covenant.  In the event that non-compliance
is not cured or waived,  the bank may exercise  its rights to demand  payment of
all  amounts  and/or  foreclose  on the  Company's  assets  which are pledged as
collateral under the agreement which could also lead to cross-defaults under the
Company's other credit  arrangements.  In that event,  there can be no assurance
that the Company will 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.


                                       21
<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 ten 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
$300,000 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
of  developing  contingency  and  business  continuity  plans  tailored for Year
2000-related  occurrences.  The Company  believes  that some of its  significant


                                       22
<PAGE>

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

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 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 is
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
$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,



                                       23
<PAGE>

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

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.

         Effective  December  10,  1998,  the  Company  repriced  656,800 of its
outstanding options to the closing price for that date of $0.5625.

"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.

                                       24
<PAGE>

                           PART II - OTHER INFORMATION

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  December  14,  1998
                  reporting  under  Item 2 the sale of its 80%  interest  in DNR
                  Sportsystem Ltd.

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

                                       25
<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:  February 18, 1998             /s/  Peter C. Weaver
                                      --------------------
                                      Peter C. Weaver
                                      President and Chief Executive Officer

Dated:  February 18, 1998             /s/  Kevin Hardy
                                      ----------------
                                      Kevin Hardy
                                      Chief Financial Officer