<PAGE>


                        SECURITIES AND EXCHANGE COMMISSION
 
                              Washington, D.C. 20549
 
                                     FORM 10-Q
 
(Mark One)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
     THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended February 28, 1997
                               -----------------

                                        OR
 
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
     THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                         to                
                               ----------------------     ---------------------

Commission file number 1-8654
                       ------

                              Unitel Video, Inc.
-------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


       Delaware                                              23-1713238
-------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                555 West 57th Street--New York, New York 10019
-------------------------------------------------------------------------------
                   (Address of principal executive offices)

                                (212) 265-3600
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
              if changed since last report)


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 twelve months and (2) has been subject to such 
requirements for the past 90 days
    . . .                                                         . . .  
Yes . X .                                                      No .   .
    . . .                                                         . . . 
                      APPLICABLE ONLY TO CORPORATE ISSUERS:
 
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

2,674,665 Common shares outstanding as of April 7, 1997.
(Number of shares)                         (Date)


<PAGE>


                              UNITEL VIDEO, INC.
 
                                  FORM 10-Q
 
                        QUARTER ENDED FEBRUARY 28, 1997

 
<TABLE>
<CAPTION>
                                                                     PAGE
             INDEX                                                   NUMBER
<S>          <C>                                                     <C>
 
Part I.      FINANCIAL INFORMATION
 
             Item 1.    Financial Statements
 
                        Consolidated Balance Sheets
                        February 28, 1997 (Unaudited) and
                        August 31, 1996                              3-4
 
                        Consolidated Statements of Operations
                        February 28, 1997 (Unaudited) and
                        February 29, 1996 (Unaudited)                5

                        Consolidated Statements of Cash Flows
                        February 28, 1997 (Unaudited)
                        and February 29, 1996 (Unaudited)            6-7
 
                        Notes to Consolidated Financial
                        Statements (Unaudited)                       8-10
 
             Item 2.    Management's Discussion and Analysis
                        of Financial Condition and Results of
                        Operations                                   11-13
 
Part II.     OTHER INFORMATION
 
             Item 4.    Submission of Matters to a Vote of
                        Security-Holders                             14

             Item 6.    Exhibits and Reports on Form 8-K             14
</TABLE>


                                       2

<PAGE>


                              UNITEL VIDEO, INC.
                                  FORM 10-Q
                        QUARTER ENDED FEBRUARY 28, 1997

 
Part 1.      FINANCIAL INFORMATION
 
             ITEM 1.    FINANCIAL STATEMENTS
 
             CONDENSED CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                FEBRUARY 28, 1997     AUGUST 31, 1996
                                                                -----------------     ----------------
                                                                   (UNAUDITED)             (NOTE)
ASSETS
<S>                                                             <C>                   <C> 

Current Assets:
 
  Cash.......................................................     $      32,000        $    192,000
   Accounts receivable,
     less allowance for doubtful accounts
     of $435,000 and $712,000................................         6,958,000           8,701,000
   Other receivables.........................................           186,000             333,000
   Prepaid income taxes......................................           140,000             142,000
   Prepaid expenses..........................................           740,000             735,000
   Net assets held for sale..................................              --             1,587,000
   Deferred tax asset........................................           844,000             844,000
                                                                   ------------        ------------
Total current assets.........................................         8,900,000          12,534,000
 

Property and equipment--at cost
  Land, buildings and improvements...........................        20,314,000          19,915,000
  Video equipment............................................        98,832,000          97,023,000
  Furniture and fixtures.....................................         3,381,000           3,502,000
                                                                   ------------        ------------
                                                                    122,527,000         120,440,000

 
Less accumulated depreciation................................        73,496,000          69,974,000
                                                                   ------------        ------------
                                                                     49,031,000          50,466,000

 
Deferred tax asset...........................................         1,625,000           1,625,000
Goodwill.....................................................         1,790,000           1,859,000
Other assets.................................................         1,148,000           1,134,000
                                                                   ------------        ------------
                                                                   $ 62,494,000        $ 67,618,000
                                                                   ------------        ------------
</TABLE>
 

Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.
 
See notes to consolidated financial statements.


                                       3

<PAGE>


                              UNITEL VIDEO, INC.
                                  FORM 10-Q
                        CONSOLIDATED BALANCE SHEETS
                                 (Continued)


<TABLE>
<CAPTION>
                                                      February 28, 1997          August 31, 1996
                                                      -----------------          ---------------
                                                         (Unaudited)                  (Note)

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S>                                                   <C>                        <C>
Current liabilities:
  Accounts payable                                    $  4,284,000               $  4,967,000
  Accrued expenses                                         967,000                  1,450,000
  Payroll, benefits and related taxes                    1,719,000                  2,947,000
  Current maturities of long-term debt                   6,485,000                  8,362,000
  Current maturities of subordinated debt                1,167,000                  1,166,000
  Current maturities of ESOP loan                           75,000                    166,000
  Current maturities of capital lease obligations        1,870,000                  1,832,000
                                                      ------------               ------------
  Total current liabilities                             16,567,000                 20,890,000
 

Deferred rent                                              110,000                    325,000
Long-term debt, less current maturities                 19,859,000                 19,706,000
Subordinated debt, less current maturities               1,771,000                  1,979,000
Long-term leases, less current maturities                4,657,000                  5,604,000
Accrued retirement                                       1,240,000                  1,304,000

 
Stockholders' equity:
 Common stock, par value
  $.01 per share
  Authorized 5,000,000 shares
  Issued 3,540,954 and 3,532,554 shares
   respectively, and outstanding 2,674,665
   and 2,666,265 shares respectively                        27,000                     26,000
Additional paid-in capital                              27,552,000                 27,545,000
Accumulated deficit                                     (1,229,000)                (1,592,000)
Common stock held in treasury,
 at cost (866,289 shares)                               (7,974,000)                (7,974,000)
                                                      ------------               ------------  
                                                        18,376,000                 18,005,000
Unearned employee benefit expense                          (86,000)                  (195,000)
                                                      ------------               ------------ 
 Total stockholders' equity                             18,290,000                 17,810,000
                                                      ------------               ------------  
                                                      $ 62,494,000               $ 67,618,000
                                                      ------------               ------------  
</TABLE>


Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.
 
See notes to consolidated financial statements.

 
                                       4

<PAGE>


                                         UNITEL VIDEO, INC. 
                                         ------------------
                                             FORM 10-Q 
                                             ---------
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                 -------------------------------------
                                            (Unaudited)
 
<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED             SIX MONTHS ENDED
                                                      ----------------------------  ----------------------------
 
<S>                                                   <C>            <C>            <C>            <C>
                                                       FEBRUARY 28,   FEBRUARY 29,   FEBRUARY 28,   FEBRUARY 29,
                                                          1997           1996           1997           1996
                                                      -------------  -------------  -------------  -------------
 
Sales...............................................  $  15,000,000  $  20,529,000  $  31,370,000  $  43,469,000
 
Cost of sales:
 
     Production costs...............................     10,228,000     15,585,000     20,944,000     30,987,000
 
     Depreciation...................................      2,258,000      1,773,000      4,309,000      3,506,000
                                                      -------------  -------------  -------------  -------------
 
                                                         12,486,000     17,358,000     25,253,000     34,493,000
                                                      -------------  -------------  -------------  -------------
 
Gross profit........................................      2,514,000      3,171,000      6,117,000      8,976,000
 
Operating expenses:
 
     Selling........................................        509,000        660,000        994,000      1,336,000
 
     General and administrative.....................      1,751,000      2,543,000      3,121,000      4,987,000
 
     Interest.......................................        933,000        923,000      1,774,000      1,771,000
 
     Impairment charge..............................         --            886,000        --           1,739,000
                                                      -------------  -------------  -------------  -------------
 
                                                          3,193,000      5,012,000      5,889,000      9,833,000
                                                      -------------  -------------  -------------  -------------
 
Earnings (loss) from operations.....................       (679,000)    (1,841,000)       228,000       (857,000)
 
Other income........................................         76,000       --              154,000         -- 
                                                      -------------  -------------  -------------  -------------
 
Earnings (loss) before income taxes.................       (603,000)    (1,841,000)       382,000       (857,000)
 
Income taxes........................................        (31,000)      (462,000)        19,000       --
                                                      -------------  -------------  -------------  -------------
 
Net earnings (loss) applicable for common stock.....  $    (572,000) $  (1,379,000) $     363,000  $    (857,000)
                                                      -------------  -------------  -------------  -------------
 
Earnings (loss) Per Common Share
 
Net earnings (loss).................................  $        (.21) $       (0.53) $         .13  $       (0.33)
                                                      -------------  -------------  -------------  -------------
 
Weighted average of common and common equivalent
  shares outstanding................................      2,695,000      2,591,000      2,694,000      2,580,000
                                                      -------------  -------------  -------------  -------------
</TABLE>
 
    See notes to consolidated financial statements.
 
                                       5
<PAGE>

                                  UNITEL VIDEO, INC. 
                                  ------------------
                                       FORM 10-Q 
                                       ---------
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                          -------------------------------------
                                     (Unaudited)
<TABLE>
<CAPTION>
                                                                                         SIX MONTHS ENDED
                                                                             ----------------------------------
 
<S>                                                                             <C>                       <C>     
                                                                           FEBRUARY 28, 1997     FEBRUARY 29, 1996
                                                                          -------------------  -------------------
 
Cash Flows From Operating Activities:
 
      Net income (loss).........................................          $    363,000              $  (857,000)
 
      Adjustments to reconcile net income (loss) to net cash provided
      by operating activities:
 
      Depreciation and amortization.............................             4,505,000                3,525,000
 
      Net gain on disposal of equipment.........................              (196,000)                 (19,000)
 
      Deferred financing costs..................................                   --                  (570,000)
 
      Amortization of deferred financing costs..................                74,000                   89,000
 
      Deferred rent.............................................              (215,000)                   8,000
 
      Accrued retirement expense................................               (64,000)                  82,000
 
      Deferred income taxes.....................................                    --                  (79,000)
 
      Impairment charge.........................................                    --                1,739,000
 
   Decrease (Increase) in:
 
      Accounts receivable.......................................             2,020,000                1,875,000
 
      Allowance for doubtful accounts............................             (277,000)                 (73,000)
 
      Other receivables..........................................              147,000                   11,000
 
      Prepaid expenses...........................................               (5,000)                 148,000
 
      Prepaid taxes..............................................                2,000                  126,000
 
      Other assets................................................             (88,000)                (131,000)
 
  Increase (Decrease) in
 
      Accounts payable............................................             (683,000)             (2,715,000)
 
      Accrued expenses............................................             (483,000)               (382,000)
 
      Payroll and related taxes.................................. .          (1,228,000)                470,000
                                                                           ----------------         ----------------  
 
          Total adjustments.......................................            3,509,000               4,104,000
                                                                           -----------------        ----------------  
 
     Net cash provided by operating activities....................            3,872,000               3,247,000
 
   Cash Flows From Investing Activities:
  
      Capital expenditures.......................................            (3,422,000)             (4,464,000)
 
      Proceeds from disposal of equipment........................             2,204,000                  23,000
                                                                           -----------------        ----------------  
 Net cash used in investing activities.............................           (1,218,000)             (4,441,000)

                                                                                          (Continued)
 </TABLE>
                                       6
<PAGE>

                                  UNITEL VIDEO, INC. 
                                  ------------------
                                       FORM 10-Q 
                                       ---------
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                          -------------------------------------
                                     (Unaudited)
 
<TABLE>
<CAPTION>
                                                                                    SIX MONTHS ENDED
                                                                        ----------------------------------
                                                                        FEBRUARY 28, 1997      FEBRUARY 29, 1996
                                                                        -----------------      -----------------
<S>                                                                            <C>                     <C>  

 Cash Flows From Financing Activities:
       Proceeds from long-term financing..........................           2,091,000             $ 22,520,000
 
       Proceeds from issuance of common stock.....................              39,000                  181,000
 
       Repayment of loan to ESOP..................................             (91,000)                 (82,000)
 
       Principal repayments.......................................          (4,931,000)             (21,130,000)
 
       Release of ESOP quarterly shares...........................              78,000                   97,000
                                                                           ----------------         ----------------  
         Net cash (used) provided by financing activities.........          (2,814,000)               1,586,000
                                                                           ----------------        ---------------- 
 
         Net (Decrease)/Increase in Cash..........................            (160,000)                 392,000
 
 Cash Beginning of Year...........................................             192,000                  161,000
                                                                           ----------------         ----------------  
 
 Cash End of Six Months..........................................         $     32,000             $    553,000
                                                                           ----------------         ----------------  
 
 Schedule of income taxes and interest paid:
 
      Income Taxes Paid...........................................        $     17,000              $    68,000
 
      Interest Paid...............................................           1,757,000                1,555,000
                                                                            ----------------         ----------------  
 
                                                                          $  1,774,000             $  1,623,000
                                                                            ----------------         ----------------  
</TABLE>
 
    See notes to consolidated financial statements. 


                                       7

<PAGE>


                                UNITEL VIDEO, INC.
                                ------------------
                                      FORM 10-O
                                     ---------
                       SIX MONTHS ENDED FEBRUARY 28, 1997
                       ----------------------------------
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    -------------------------------------------
                                   (Unaudited)
 
1. CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------
 
    The condensed consolidated balance sheet as of February 28, 1997, the 
consolidated statements of operations for the six months and quarters ended 
February 28, 1997 and February 29, 1996, and the consolidated statements of 
cash flows for the six months then ended have been prepared by the Company 
without audit. In the opinion of management, all adjustments (which include 
only normal recurring adjustments) necessary to present fairly the financial 
position, results of operations, and cash flows at February 28, 1997 and for 
all periods presented have been made.
 
    Certain information and footnote disclosure normally included in the 
financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted. It is suggested that 
these condensed consolidated financial statements be read in conjunction with 
the financial statements and notes thereto in the Company's August 31, 1996 
Form 10-K filed with the Securities and Exchange Commission. The results of 
operations for the six months ended February 28, 1997 are not necessarily 
indicative of the operating results for the full year.
 
2. STOCKHOLDERS' EQUITY
 
    During the six months ended February 28, 1997, stockholders' equity 
increased due to:
 
<TABLE>
<S>                                                                     <C>
Net income........................................................  $ 363,000
 
Reduction in unearned employee benefit expense....................    109,000
 
Reduction in additional paid in capital resulting from the
  allocation of ESOP shares.......................................    (31,000)
 
Purchase of stock under the Unitel Video, Inc. Employee Stock
  Purchase Plan...................................................     39,000
                                                                    ---------
 
Total increase in stockholders' equity............................  $ 480,000
                                                                    ---------
</TABLE>
 
3. PER SHARE DATA
 
    Per share data for the quarter and six months ended February 28, 1997 and 
February 29, 1996 is based on the weighted average number of common shares 
outstanding. In the quarter and six months ended February 28, 1997 and 
February 29, 1996 unreleased Employee Stock Ownership Plan shares are not 
considered outstanding for earnings per share calculations. (See Note 4). 

                                       8

<PAGE>
 
4. 401(k) Employee Savings and Stock Ownership Plan
----------------------------------------------------
 
    The Company sponsors a 401(k) savings and stock ownership plan (the 
"Plan") which requires the Company to match employee contributions to the 
401(k) portion of the Plan in shares of the Company's Common Stock up to the 
maximum amount set forth in the Plan. Effective September 1, 1994, the 
Company has adopted the provisions of Statement of Position 93-6, "Employer's 
Accounting for Employee Stock Ownership Plans" ("SOP 93-6").
 
    In 1987, to purchase 115,849 shares of the Company's stock, the Plan 
obtained financing from a bank amounting to $1,250,000. In 1991 the Plan 
purchased 25,810 shares of the Company's stock financed by a $229,193 loan 
from the Company. The Plan is funded by the Company as required to provide 
the Plan with the funds necessary to meet its debt service requirements. The 
loan obligations of the Plan are considered unearned employee benefit expense 
and are recorded as a separate reduction of the Company's shareholders' 
equity. The bank financing is guaranteed by the Company.
 
    The Plan's shares are released and allocated to participant accounts 
based upon Company contributions and certain payments made to reduce the Plan 
debt. The Company reports compensation expense based on the dollar value of 
the 401(k) match expense.
 
    The Plan's compensation expense was $69,000 and $39,000 for the six 
months and quarter ended February 28, 1997, respectively. A summary of the 
Plan's shares as of February 28, 1997 is as follows:
 
<TABLE>
<S>                                                                     <C>
Allocated shares..................................................     96,666
 
Shares released for allocation....................................     11,836
 
Unreleased shares.................................................     24,347
                                                                    ---------
 
                                                                      132,849
                                                                    ---------
 
Fair value of unreleased shares at February 28, 1997..............  $ 158,000
                                                                    ---------
</TABLE>
 
    Prior to adoption of SOP 93-6, the unreleased shares were considered 
outstanding for the earnings per share computation. Accordingly, for the six 
months ended February 28, 1997, 24,347 shares were no longer considered 
outstanding. The effect of adopting SOP 93-6 was not material on the net 
income, and resulted in an increase of approximately 1% on the net income per 
share for the six months ended February 28, 1997.
 
5. IMPAIRMENT AND RESTRUCTURING CHARGES
---------------------------------------
 
    In March 1995, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 121, "Accounting for the Impairment of 
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("FASB 
Statement No. 121") which provides guidance on when to assess and how to 
measure impairment of long-lived assets, certain intangibles and goodwill 
related to those assets to be held and used, and for long-lived assets and 
certain identifiable intangibles to be disposed of. The Company adopted FASB 
Statement No. 121 as of August 31, 1995.
 
                                       9

<PAGE>

    In fiscal 1995 the Company determined to focus its resources toward 
providing services to the entertainment and corporate communications areas, 
which represent the Company's strength, and decided to sell its three Editel 
divisions which did not specialize in these areas. The Company recorded the 
carrying value of the assets related to these divisions as net assets held 
for sale, and a corresponding impairment charge, since these assets were no 
longer needed for the current and future operations of the Company.
 
    In fiscal 1996 the Company began marketing these divisions to potential 
buyers. In the first six months of fiscal 1996 the Company recorded an 
impairment charge of $1,739,000 relating to the assets at all three Editel 
divisions. The impairment charge recorded represented management's estimate 
of the decrease in value of these assets during the period such assets were 
held for sale based upon the depreciation method which the Company has found 
to be reasonable and appropriate.
 
    In February 1996 the Company closed its Editel Chicago division, 
distributed the majority of its assets to other divisions throughout the 
Company and sold the remaining assets at an auction held in May 1996. Also in 
May 1996, after reevaluating the potential of the Editel Los Angeles 
division, the Company decided to retain and expand this division. 
Management's decision to retain and expand the Editel Los Angeles division 
was based on several factors including an improving business trend, new lines 
of business, new management, and increased cash flow. Based on these factors, 
management believes this division has positive growth potential. As a result, 
a determination was made to transfer to Editel Los Angeles equipment from the 
Editel New York and Editel Chicago divisions and upgrade the creative and 
technical staff at this facility. This was accomplished to enable the 
division to provide additional services for customers and expand into new 
areas of business. In August of 1996 the Company closed its Editel New York 
division and distributed the majority of its editorial and computer graphics 
assets throughout the Company. In November 1996 the Company sold the majority 
of this division's remaining net assets held for sale of $1,587,000 to an 
unrelated third party for $1,400,000. In February 1997 the remaining Editel 
New York assets were sold at auction or redeployed throughout the Company. 
Proceeds from the sale of assets are used by the Company to repay outstanding 
debt.
 
6. STOCK BASED COMPENSATION
---------------------------
 
    Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"), 
"Accounting for Stock Based Compensation," provides companies a choice in the 
method of accounting used to determine stock-based compensation. Companies 
may account for such compensation either by using the intrinsic value-based 
method provided by APB Opinion No. 25 ("APB No. 25"), "Accounting for Stock 
Issued to Employees," or the fair market value based method provided in SFAS 
No. 123. This statement is required to be adopted by the Company during its 
fiscal year ending August 31, 1997. The Company intends to use the intrinsic 
value-based method provided in APB No. 25 to determine stock-based 
compensation. The sole effect of the adoption of SFAS No. 123 is the 
obligation imposed on the Company to comply with the new disclosure 
requirements provided thereunder.

                                       10

<PAGE>

 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------  -----------------------------------------------------------------------
        OF OPERATIONS.
        -------------
 
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
 
    The Company is committed to keeping pace with technological developments 
as well as taking advantage of new business opportunities in the video 
communications industry. Capital expenditures were $3,422,000 during the six 
months ended February 28, 1997, and consisted of the purchase of production, 
post production and graphics equipment for use throughout the Company.
 
    Net cash provided by operating activities during the six months ended 
February 28, 1997 was $3,872,000 and during the six months ended February 29, 
1996 was $3,247,000. Net cash provided by operating activities for the six 
months ended February 28, 1997 was offset by $1,218,000 of cash used in 
investing activities, which consisted primarily of capital expenditures (net 
of proceeds from asset dispositions of $2,204,000), and by net cash used in 
financing activities of $2,814,000 for debt repayment, resulting in a net 
decrease in cash available of $160,000.
 
    In August 1995 the Company recorded a deferred tax asset related to the 
pre-tax losses and impairment charges incurred by the Company's Editel 
divisions. During fiscal 1996, the Company incurred additional pre-tax losses 
related to the operations and closure of the Editel New York and Editel 
Chicago divisions. It is management's determination that the deferred tax 
asset will be realized in future years based upon the Company's historical 
record of pre-tax profits prior to the last two fiscal years of pre-tax 
losses and based on the Company's current and projected pre-tax earnings.
 
    In December 1995, the Company entered into a $26 million revolving credit 
and term loan agreement with a financial institution, consisting of an $11 
million revolving credit facility and two $7.5 million term loans. Term loan 
A is payable in 59 monthly principal payments of $89,000 through November 
2000 and a payment of $2,249,000 at December 2000. Term loan B is repayable 
from the proceeds of sales of fixed assets. As of February 28, 1997, 
$2,804,000 has been repaid leaving a balance of $4,696,000 for term loan B. 
The remaining balance of term loan B is due in full on June 30, 1997. The 
Company anticipates that any remaining balance of term loan B which has not 
been repaid by the sale of fixed assets will be rescheduled to amortize over 
a period of time equal to the remaining term of term loan A. At February 28, 
1997 $6,697,000 was outstanding under the revolving portion of the credit 
facility.
 
RESULTS OF OPERATIONS
---------------------
 
    Sales were $15,000,000 and $20,529,000 for the quarters ended February 
28, 1997 and February 29, 1996, respectively. Sales were $31,370,000, and 
$43,469,000 for the six months ended February 28, 1997 and February 29, 1996, 
respectively. The decrease in sales in the six month period ending February 
28, 1997 was due primarily to the closure of the Company's Editel Chicago and 
Editel New York divisions in fiscal 1996. Also contributing to lower sales 
was the cancellation of the "Rush Limbaugh" and "Mark Walberg" talk shows, 
which had been produced at Unitel studios during the majority of fiscal 1996, 
and the out of service status of one of the Mobile division's most 

                                       11

<PAGE>

sophisticated units during a substantial portion of the first quarter of 
fiscal 1997 while being digitally retrofitted by Company engineers. The sales 
decrease in the first six months of fiscal 1997 was partially offset by a 
significant increase in sales at the Company's Editel Los Angeles division.
 
    The Company's net loss for the quarter ended February 28, 1997 was 
$(572,000), compared to the net loss of $(1,379,000) for the comparable 
quarter of fiscal year 1996. The Company's net income was $363,000 for the 
six months ended February 28, 1997, compared with a net loss of $(857,000) 
for the same period of the prior fiscal year. The second quarter of the 
fiscal year has historically resulted in a loss which was minimized in fiscal 
1997 by the closure of the Editel New York and Editel Chicago divisions 
during fiscal 1996. The loss in the second quarter of fiscal 1996 included 
severance costs associated with the closure of the Editel Chicago division 
and the restructuring of the Editel New York division. The effective tax rate 
for the first six months of fiscal 1997 was 5% as compared with 47% for the 
same period in the prior fiscal year. The effective rate for the first six 
months of fiscal 1997 was less than the prior period tax rate due to the 
utilization of net operating loss carryforwards generated by the losses 
incurred in fiscal 1995 and 1996.
 
    Production costs, the main component of cost of sales, consist primarily 
of direct labor, equipment maintenance expenses and occupancy costs. The 
Company's production costs, as a percentage of sales, were 68% for the 
quarter ended February 28, 1997, as compared to 76% for the quarter ended 
February 29, 1996 and were 67% and 71% for the first six months of fiscal 
years 1997 and 1996, respectively. The decrease in production expenses as a 
percentage of sales in the quarter and six months ended February 28, 1997 as 
compared with the same period in the prior year, is primarily due to the 
closure of the Company's Editel Chicago and Editel New York divisions which 
had been incurring these expenses at a higher percent of sales compared with 
the Company's other divisions. Also included in the decrease in production 
expenses from the comparable period in the prior year is the impact of the 
reduction of certain cost estimates related to the closure of the Editel New 
York and Editel Chicago divisions.
 
    Depreciation, as a percentage of sales, was 15% and 9% for the quarters 
ended February 28, 1997 and February 29, 1996, respectively, and 14% and 8% 
for the first six months of the 1997 and 1996 fiscal years, respectively. The 
increase in the quarter and six months ended February 28, 1997 as compared 
with the same period in the prior year, was a result of the reclassification 
of the net property and equipment of the Company's three Editel divisions to 
net assets held for sale at August 31, 1995 with the corresponding 
depreciation expense recorded as impairment charges. In May 1996, the Company 
determined to retain its Editel Los Angeles division and, accordingly, 
resumed recording depreciation expense for this division. The impairment 
charge recorded in the first six months of fiscal 1996 represents 
management's estimate of the decrease in value of these assets based upon the 
depreciation method which the Company has used in the past and which 
management has found to be reasonable and appropriate. Of the $1,739,000 
impairment charge recorded in the first six months of fiscal 1996, $777,000 
related to the Editel Los Angeles division, which if recorded as depreciation 
expense in 1996 would have resulted in depreciation as a percentage of sales 
of 12% as compared to 8% in the first six months of fiscal 1996. In addition, 
the majority of the assets of the Editel Chicago 


                                       12
<PAGE>

and Editel New York divisions were redistributed throughout the Company which 
contributed to the increase in depreciation expense in fiscal 1997.
 
    Selling expenses for the quarters ended February 28, 1997 and February 
29, 1996 were 3.4% and 3.2% of sales, respectively, and 3.2% and 3.1% for the 
six months ended February 28, 1997 and February 29, 1996, respectively. The 
increase in the quarter and six months ended February 28, 1997 as compared 
with the same period in the prior year, is mainly due to an increase in the 
sales staff at the New York divisions and at Editel Los Angeles.
 
    General and administrative expenses, as a percentage of sales, for the 
quarters ended February 28, 1997 and February 29, 1996 were 11.7% and 12.4%, 
respectively, and 9.9% and 11.5% for the six months ended February 28, 1997 
and February 29, 1996, respectively. The decrease in general and 
administrative expenses as a percentage of sales is primarily due to the 
closure of the Company's Editel Chicago and Editel New York divisions which 
had been incurring these expenses at a higher percent of sales compared with 
the Company's other divisions. Also included in the decrease in general and 
administrative expenses from the comparable period in the prior year is the 
impact of the reduction of certain cost estimates related to the closure of 
the Editel New York and Editel Chicago divisions.
 
    Interest expense, as a percentage of sales, for the quarters ended 
February 28, 1997 and February 29, 1996 was 6.2% and 4.5%, respectively, and 
5.7% and 4.1% for the six months ended February 28, 1997 and February 29, 
1996. Since the level of outstanding debt in the first six months of fiscal 
1997 remained constant with the same period of the prior year and sales 
decreased in the first six months of fiscal 1997, interest expense as a 
percentage of sales increased in fiscal 1997 when compared with the same 
period of the prior year.
 
    The Company's effective tax rate was 5% and 47% for the first six months 
of fiscal years 1997 and 1996, respectively. The effective tax rate for the 
first six months of fiscal 1997 is less than the federal statutory rate of 
34% due to the utilization of net operating loss carryforwards generated by 
the losses incurred in fiscal 1995 and 1996. The effective tax rate exceeded 
the federal statutory rate of 34% in fiscal 1996 due to state and local taxes.
 
                                       13

<PAGE>


PART II OTHER INFORMATION
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
 
    (a) The Annual Meeting of Stockholders of the Company was held on February
5, 1997.
 
    (b) At the Annual Meeting, Herbert Bass and Alex Geisler were elected as 
Directors for terms expiring in 2000. The term of office as a Director of 
Walter G. Arader, Philip S. Birsh, Barry Knepper and Richard Clouser 
continued after the meeting.
 
    (c) The total votes cast for, withheld or against, as well as the number 
of abstentions and broker non-votes, as to the election of Directors, were as 
follows:
 
<TABLE>
<CAPTION>
                                                            TOTAL VOTES        TOTAL VOTES
NOMINEE                                                         FOR             WITHHELD
---------------------------------------------------------  --------------  -------------------
<S>                                                               <C>             <C>
 
Herbert Bass.............................................      2,234,712          184,242
 
Alex Geisler.............................................      2,234,712          184,242

</TABLE>
 
    There were no abstentions or broker non-votes for the election of Directors.
 
    (d) In addition, at the Annual Meeting an amendment (the "Amendment") to 
the Company's 1992 Stock Option Plan (the "Plan") was approved providing for 
each non-employee Director to receive an automatic grant on each May 1st 
during the term of the Plan of an option to purchase 3,000 shares of the 
Company's stock, increased from the 1,000 shares of stock subject to the 
automatic grant prior to approval of the Amendment.
 
    (e) The total votes cast for, withheld or against, as well as the number 
of abstentions and broker non-votes, as to the approval of the Amendment, 
were as follows:
 
<TABLE>
<CAPTION>

TOTAL VOTES FOR      TOTAL VOTES AGAINST   ABSTENTIONS
---------------      --------------------  -----------
     <S>                <C>                <C>
 
2,003,072            239,692               10,146
</TABLE>
 
    There were 166,044 broker non-votes for the approval of the Amendment.
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
    (a) Exhibits required to be filed by item 601 of Regulation S-K. 

        (1) Exhibit 10. Amended 1992 Stock Option Plan. 
        (2) Exhibit 27. Financial Data Schedule.
 
    (b) There were no reports filed on Form 8-K during the six month period 
ended February 28, 1997.

                                       14

<PAGE>


 
      SIGNATURES
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this amendment to be signed on its behalf by the 
undersigned thereunto duly authorized.
 
     UNITEL VIDEO, INC.
 
    By: /s/ Barry Knepper 
        -----------------------------------------
            Barry Knepper 
            President and Chief Executive Officer
 
    By: /s/ George Horowitz 
        ------------------------------------------  
            George Horowitz 
            Chief Financial Officer
 
Dated: April 7, 1997




 
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